Early Childhood Administration

1
Early Childhood Administration

• Budgets and Finance

2
Objectives

• Develop principles of budgetary process (service
  and project)
• Recognise key income and expenditure areas
• Relate budgetary principles to financial
  management systems

3
Obligations of Administrators

• Understand income expenditure statements/other
  accounting items
• Assess budget relevance analyse centre needs
• Work within budget report to licencee/committee.
  Scenario
• Consider stakeholder concerns ( Who are involved
  in scenario?

4
Role of Other Staff

• Stakeholders providing input to budget process
• Monitoring financial expenditure (Petty cash),
  staffing, other resource usage
• Project level budget and financial management
  (e.g. excursion)

5
Elements of Accounting

• Budget
• Balance sheet
• Cash flow report
• Income/expenditure statement

6
Centre Budget Cycle

• Planning centre needs costs and projected
  income
• Procuring funds (fees, grants)
• Financial management - cash flow
  monitoring/finance control
• Evaluating and auditing

7
Approaches to Budgets

• Zero based - calculate each year by examining
  each item
• Incremental - add inflation rate to last years
  figures
• Percentage- allocate set proportion of funds to
  items

8
Approaches continued

• Establish potential income and plan expenditure
  structures accordingly OR
• Establish costs of providing quality and set
  income goals accordingly

9
Factors to Consider in Budget Development

• Legislative constraints
• Staff provisions
• Services required
• Community context

10
Legislation Affecting Budget Allocations

• Industrial awards / agreements
• Workers Compensation
• Insurance
• Licencing regulations
• Workplace Health Safety

11
Staff Provisions Budget Allocation

• Salaries (75-85 of income )
• Leave ( recreation, sick, long service provision)
• Recruitment costs
• Professional development
• Provision for planning time

12
Underlying Issues in Budgeting in Centres

• Utilisation
• Staff provisions
• Fee structures
• Fixed/variable cost structures
• Service viability

13
Income Sources

• Fees from enrolments (private)
• Childcare benefit (childcare)
• Government works funding
• Fundraising
• Grants (not-for-profit centres)
• Government staff funding (CK, Pre-S)

14
Fee Setting Process

• Centre fixed and variable costs
• Program needs of centre
• For-profit or non-profit centre
• Family ability to pay
• Hourly, daily, weekly or term fee

15
Expenditure Areas

• Fixed costs ( e.g. insurance, rates/rent,
  salaries and on-costs, cleaning, accountant)
• Variable costs( e.g. equipment, marketing,
  phone/power/water, repairs , professional
  development)

16
Hidden Areas to Consider

• Depreciation
• Long service and sick leave
• Major centre maintenance
• Cost of staff replacement

17
Taxes and GST

• Child care service issues
• Education including child care as a GST -free
  service
• Meals, nappy service - GST
• Cleaning, maintenance, equipment -input tax
  credits i.e. refunded

18
Fee Management

• Payment in advance/later
• Pay for actual/ enrolled days
• Late arrival fee
• Bad debt

19
Petty Cash System

• Imprest system i.e. set float
• Small amounts e.g. 20
• Small one-off incidentals
• Receipts vital for records

20
Cost Containment

• Analysis of variable costs
• Involving staff in process
• Using in kind contributions
• Care with materials allocation
• Lower cost supply source

21
Cash Flow Management

• . Utilisation
• Staff roster
• Setting aside provisions
• Financial summaries
• . Scenario

22
Financial Management

• Reduce use of costly credit
• Attention to pay periods
• Allocating petty cash and consumables over set
  period
• Anticipating major expenses

23
Stakeholder Involvement

• Committee of Management
• PC/PF
• Staff meetings
• Accreditation
• Newsletters etc
• Suggestions

24
Difficult Financial Decisions

• Changing services to cut costs
• Funding or closing down a financially non-viable
  service
• Retaining experienced staff or recruiting cheaper
  staff
• Management of payment/debt

25
Auditing Accounts

• Official examination of accounts of association/
  organisations business each financial year
• By qualified /registered person
• Income/expenditure statement
• Balance sheet (assets/ liabilities)