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Daycare Budgeting Scenario Northville, Located Term Paper

Method to balance the Proposed Budget

One of the methods employed to balance the budget is to calculate the revenue realized from children based on the current child/daycare ratio 8:1. The paper adjusts the entire child/daycare ratio to 8:1 as being revealed in the appendix 2. To adjust child/daycare ratio to 8:1, the paper divides the number of children by employee. The adjustment is necessary because the ratio for child/childcare in appendix 1 is unrealistic. For example, in March, in the appendix 1, the number of children is 146 while the number of daycare is 25. Thus, the ratio of child/employee in March will be 5.84:1. This ratio is unrealistic since it is impossible to get human with total number of 5.84. To make the data statistical significant, the paper adjusts 5.84 to a whole number. Based on the adjustment child/childcare ratio, the paper is able to increase yearly revenue realized from child payment from $454,000 to $737,280.

Another method used to alter the budget to achieve balanced budget is by negotiating the increase of the union contribution from $1 per day to $1.50 per day. With this technique, the paper is able to increase the union contribution from $31,780 to $47,670 (See Appendix 2).

Additionally, the paper increases the monthly payment that parent pay for a child from $200 to $240. The adjustment increases revenue realised from child payment from $454,000 to $737, 280. Changes in the budget will provide the yearly budget surplus of $59,498 for the Northville Day Care Center FY 2012-13 (See Table 1, Appendix 1 and 2).

Summary of changed in the Budget FY 2012/2013 ($U.S.)

Before Changes in the Budget

After Changes in the Budget

Total Yearly Revenue

599,780

898,950

Total Expenditure

764772

839,452

Yearly Gap

(164,992)

59,498

List of Reference

Hallway (2000). Daycare come to Northville. Evans School of Public Affair. USA.

Appendix 1: Northville Day Care Center FY 2012-13 Budget ($U.S.)

January

February

March

April

May

June

July

August

September

October

November

December

Yearly Total

# of Employees

20

22

25

27

30

32

33

35

37

39

41

43

# of Children

2,270

Revenue

Fees/Child

24,000

26,400

29,200

32,200

35,600

37,400

39,400

41,400

43,600

45,800

48,200

50,800

454,000

Union contribution $1.00/day

1,680

1,848

2,044

2,254

2,492

2,618

2,758

2,898

3,052

3,206

3,374

3,556

31,780

Start Up Grant

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

90,000

Facility subsidy

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

24,000

Total Revenue

35,180

37,748

40,744

43,954

47,592

49,518

51,658

53,798

56,152

58,506

61,074

63,856

599,780

Expenditures

Salary

Director

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(7,200)

Admin/Secretary

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(3,900)

FT Daycare

(20,800)

(22,880)

(26,000)

(28,080)

(31,200)

(33,280)

(34,320)

(36,400)

(38,480)

(40,560)

(42,640)

(44,720)

(399,360)

Sub-total

(21,725)

(23,805)

(26,925)

(29,005)

(32,125)

(34,205)

(35,245)

(37,325)

(39,405)

(41,485)

(43,565)

(45,645)

(410,460)

Benefits

Social Security

(1,553)

(1,702)

(1,925)

(2,074)

(2,297)

(2,446)

(2,520)

(2,669)

(2,817)

(2,966)

(3,115)

(3,264)

(29,348)

Unemployment/Disability

(1,738)

(1,904)

(2,154)

(2,320)

(2,570)

(2,736)

(2,820)

(2,986)

(3,152)

(3,319)

(3,485)

(3,652)

(32,837)

Health Insurance

(1,230)

(1,350)

(1,530)

(1,650)

(1,830)

(1,950)

(2,010)

(2,130)

(2,250)

(2,370)

(2,490)

(2,610)

(23,400)

Pension

(1,304)

(1,428)

(1,616)

(1,740)

(1,928)

(2,052)

(2,115)

(2,240)

(2,364)

(2,489)

(2,614)

(2,739)

(24,628)

Sub-total

(5,825)

(6,385)

(7,225)

(7,785)

(8,624)

(9,184)

(9,464)

(10,024)

(10,584)

(11,144)

(11,704)

(12,264)

(110,212)

Total Personnel

(27,550)

(30,190)

(34,150)

(36,790)

(40,749)

(43,389)

(44,709)

(47,349)

(49,989)

(52,629)

(55,269)

(57,909)

(520,672)

Operations

Food

(7,200)

(7,920)

(8,760)

(9,660)

(10,680)

(11,220)

(11,820)

(12,420)

(13,080)

(13,740)

(14,460)

(15,240)

(136,200)

Supplies

(3,600)

(3,960)

(4,380)

(4,830)

(5,340)

(5,610)

(5,910)

(6,210)

(6,540)

(6,870)

(7,230)

(7,620)

(68,100)

Capital Equipment

(600)

(700)

(750)

(850)

(450)

(500)

(500)

(550)

(550)

(600)

(650)

(6,700)

Employee Training

(4,000)

(400)

(600)

(400)

(600)

(400)

(200)

(400)

(400)

(400)

(400)

(400)

(8,600)

Faculty Rental

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(24,000)

/> Annual Inspection
(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(500)

Sub-Total

(16,842)

(14,922)

(16,482)

(17,682)

(19,512)

(19,722)

(20,472)

(21,572)

(22,612)

(23,602)

(24,732)

(25,952)

(244,100)

Total Expenditures

(44,392)

(45,111)

(50,631)

(54,471)

(60,261)

(63,111)

(65,181)

(68,921)

(72,601)

(76,231)

(80,001)

(83,861)

(764,772)

Monthly gap

(9,212)

(7,363)

(9,887)

(10,517)

(12,669)

(13,593)

(13,523)

(15,123)

(16,449)

(17,725)

(18,927)

(20,005)

(164,992)

Appendix 2: NorthVille Daycare FY2012-2013 Balanced Budget

January

February

March

April

May

June

July

August

September

October

November

December

Yearly Total

# of Employees

20

22

25

27

30

32

33

35

37

39

41

43

# of Children

3,072

Revenue

Fees/Child

38,400

42,240

48,000

51,840

57,600

61,440

63,360

67,200

71,040

74,880

78,720

82,560

737,280

Union contribution $1.50/day

2,520

2,772

3,066

3,381

3,738

3,927

4,137

4,347

4,578

4,809

5,061

5,334

47,670

Start Up Grant

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

7,500

90,000

Facility subsidy

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

24,000

Total Revenue

50,420

54,512

60,566

64,721

70,838

74,867

76,997

81,047

85,118

89,189

93,281

97,394

898,950

Expenditures

Salary

Director

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(600)

(7,200)

Admin/Secretary

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(325)

(3,900)

FT Daycare

(20,800)

(22,880)

(26,000)

(28,080)

(31,200)

(33,280)

(34,320)

(36,400)

(38,480)

(40,560)

(42,640)

(44,720)

(399,360)

Sub-total

(21,725)

(23,805)

(26,925)

(29,005)

(32,125)

(34,205)

(35,245)

(37,325)

(39,405)

(41,485)

(43,565)

(45,645)

(410,460)

Benefits

Social Security

(1,553)

(1,702)

(1,925)

(2,074)

(2,297)

(2,446)

(2,520)

(2,669)

(2,817)

(2,966)

(3,115)

(3,264)

(29,348)

Unemployment/Disability

(1,738)

(1,904)

(2,154)

(2,320)

(2,570)

(2,736)

(2,820)

(2,986)

(3,152)

(3,319)

(3,485)

(3,652)

(32,837)

Health Insurance

(1,230)

(1,350)

(1,530)

(1,650)

(1,830)

(1,950)

(2,010)

(2,130)

(2,250)

(2,370)

(2,490)

(2,610)

(23,400)

Pension

(1,304)

(1,428)

(1,616)

(1,740)

(1,928)

(2,052)

(2,115)

(2,240)

(2,364)

(2,489)

(2,614)

(2,739)

(24,628)

Sub-total

(5,825)

(6,385)

(7,225)

(7,785)

(8,624)

(9,184)

(9,464)

(10,024)

(10,584)

(11,144)

(11,704)

(12,264)

(110,212)

Total Personnel

(27,550)

(30,190)

(34,150)

(36,790)

(40,749)

(43,389)

(44,709)

(47,349)

(49,989)

(52,629)

(55,269)

(57,909)

(520,672)

Operations

Food

(9,600)

(10,560)

(12,000)

(12,960)

(14,400)

(15,360)

(15,840)

(16,800)

(17,760)

(18,720)

(19,680)

(20,640)

(184,320)

Supplies

(4,800)

(5,280)

(6,000)

(6,480)

(7,200)

(7,680)

(7,920)

(8,400)

(8,880)

(9,360)

(9,840)

(10,320)

(92,160)

Capital Equipment

(800)

(1,200)

(800)

(1,200)

(800)

(400)

(800)

(800)

(800)

(800)

(800)

(9,200)

Employee Training

(4,000)

(400)

(600)

(400)

(600)

(400)

(200)

(400)

(400)

(400)

(400)

(400)

(8,600)

Faculty Rental

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(2,000)

(24,000)

Annual Inspection

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(42)

(500)

Sub-Total

(20,442)

(19,082)

(21,842)

(22,682)

(25,442)

(26,282)

(26,402)

(28,442)

(29,882)

(31,322)

(32,762)

(34,202)

(318,780)

Total Expenditures

(47,992)

(49,271)

(55,991)

(59,471)

(66,191)

(69,671)

(71,111)

(75,791)

(79,871)

(83,951)

(88,031)

(92,111)

(839,452)

Monthly gap

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