BUDGET ANALYSIS REPORT

Report on Community Centre Budget

[Instructor name]

Answer no. 1

The financial report for the third quarter of year 2011-12 showed overspending. However, it appears that this overspending is minimal and insignificant. Still, it appears that this excess expenditure in the third quarter resulted due to negative variances in individual heads of accounts in both staff and non-staff expenditure heads. For staff expenditures, the manager was paid £360 more. This could be a performance-based pay. Project manager was also paid another £26. This could be due to some discrepancy in the payroll. Admin support was also given additional £610; this could be due to both discrepancies and performance-based pay. Outreach worker was paid extra £360 due to performance-based pay. Volunteer expenses increased by £50. This could be due to changes in WTE/days. Training expense increased by £200. This could be due to increase in the number of trainees or due to change in WTE/days. Contrarily, the non-staff expenditures showed a very small favourable variance of £50. However, there were still overspends in the non-staff expenditures. The rent increased by £120 which reflects the increase in monthly rent. Heat and light expenditures increased by £80 due to inflation or more work. Building maintenance expenditure increased by £40 which could be again due to more work. Phone, stationery, and IT expenditures increased by £50 which must be due to increased services. The postage expense increased by £25 which shows extra mail has been handled. Travel and subsistence expenditure increased by £125 which could be due to more travel or meal expenses.

Answer no. 2

There were no negative variances in any of the account heads in the last quarter. However, if it was desired to remove any deficit for the year and to square the positions of all accounts, then some changes could be done to the actual expenditures in the last quarter. It appears that the staff actual expenditures which showed unfavourable variances could not be changed as they reflected either payroll discrepancies, changes in WTE/days, or other reasons. However, the non-staff expenditures could be reduced in the last quarter to accommodate overspending in not only the non-staff expense accounts, but also in the staff expense accounts. The total non-staff budget for the last quarter was only £5,525. However, the annual deficit accumulated in the first three quarters was equal to £4,111. It appears impossible to remove the deficit from the quarterly budget of the fourth quarter non-staff expenditure. However, certain expenditures could be reduced to decrease the amount of end-year deficit. For instance, it could be possible to reduce the end-year deficit by about £1,000 to make it equal to £3,111. Then it would require curtailing certain non-staff expenses. The non-staff expenditures that could be reduced include marketing and promotion and audit and legal. However, the total last quarter budget of these two heads in only £650. Therefore, it finally appears that it is just not possible to reduce the end of year budget because it would require the expunging of the marketing ...