Daycare Budgeting Scenario Northville, Located Term Paper

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Since the proposed budget has come into a deficit, there is a need to balance the budget of the proposed program to enhance the financial sustainability of the project.

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.....

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