THE HOURS WE CAN'T BE HOME
CHAPTER 5: MONEY MATTERS
Carole Eller
Extension Educator, Youth and Resource Development
Cooperative Extension System
University of Connecticut
Elizabeth Prosl-Salsado
ExtensionEducator, Youth and Resource Development
Cooperative Extension System
University of Connecticut
Barbara A. Lescault-Cooley
Consultant
Collaboration for Connecticut's Children
Copyright/Access Information
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Money, unfortunately, will often dictate whom you may hire as staff, what projects the children may do, and to some extent which children may participate. You will need to estimate your income and expenses as closely as possible.
The budget is the estimate of what you think your income and expenses will be for one year. Both parts of your budget should be equal. They will influence each other to a large extent. It may be helpful to look at a budget from a similar program to see what types of expenses are incurred. (See Appendix 2.)
This is the money your program will be receiving from fees, grants, donations, and fund raising.
Fees are the payments parents make for their children to attend the program. These should be set to reflect what the parents said they are willing to pay on the initial survey. They are calculated by multiplying the number of children, times the number of days, times the daily rate to equal the total fee.
Children x Days x Rate = Total
School Days 15 x 180 x $4.00 = 10,800
Full Days 10 x 50 x $10.00 = 5,000
Total Fees = $15,800
You may also have separate fees for 1/2 days, kindergarten children, and those who only participate part time.
Grants may be another source of income. State agencies sometimes offer grants to communities to subsidize low income children or to pay staff salaries for new programs. These funds may come from Social Service Block Grants, and their continuation is never guaranteed. The applicable state agency will inform you of deadlines and assist you with the applications. It is wise to check with town and county agencies about funding. Start at the top and be referred down. Be persistent!
Donations are another source of potential income. It will help if you already have tax-exempt status. Even if you do not, some community groups may be willing to support your program.
This is an activity that some parents might enjoy, and it gives them the opportunity to make a contribution to the program. This source of funding should be discussed, but guard against over-extending people who are needed to complete other tasks. Once your group is well organized, you may wish to do more fund raising.
This section deals with the money you need to expend in order to run your program. The most typical expense items for a day care program are:
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Your accountant/CPA or bookkeeper can devise a monthly financial report for use at monthly board meetings. This report can be a simple breakdown of the income and expenses in each category outlined in your budget. This will show how the program is doing against your projected budget. It is important that the board keep tabs on the program's finances. Neglect by the board may result in crisis and in some cases, bankruptcy. It is easier for any board to take preventive action rather than remedial action. Keeping cash outflow on a par with cash inflow is the key to stability.
After the first year, your board will want to set a regular budget process with a timetable and assigned responsibilities. A year of experience will also help in setting realistic amounts for both income and expenses; the entire process will become easier.
We noted earlier that you should have a bookkeeper or someone with accounting knowledge to set up and maintain the program's books. The accountant will assist in developing the format and method but will not do the routine work. It is best to use the accountant's time for an annual audit and certain tax preparation work. The bookkeeper should set up the following records:
1. Payroll and Personnel
a. Time sheets
b. Attendance sheets
c. Payroll summaries
d. Personnel files
e. Incident/accident files
2. General Ledger
a. Accounts receivable
b. Accounts payable
c. Cash receipts
d. Cash disbursements
These simple records will generate adequate information to prepare the payroll and tax reports necessary and will provide financial accountability to funders and the board.
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