Introduction
To give the funder an opportunity to evaluate the project’s financial costs and understand whether the implementation of the project is real, the budget narrative is necessary. Its main aim is to present and justify the budget items that the project developers have proposed.
Program Overview
The program targets to decrease the drug abuse in parolees and probationers in the community Virginia Estates, Montgomery, AL. To implement the program successfully, at least one regular employee (adult education teacher) and one temporary employee (medical assistant) will be needed to assist in parolees’ rehabilitation.
Salaries and benefits’ costs are expected to be the primary expenditures of the program since it relies on human resources more than on specific equipment. The program will decrease property and life insurance cost in Virginia Estates due to its impact on the crime rates.
Program Objectives
The program’s objective is to reduce drug abuse in probationers in Virginia Estates. The adult education teacher will spend two hours per day with four groups of probationers to increase their educational level. The medical assistant will spend 15 hours per week to present information and explain the participants the connection between drug abuse and health conditions/inability to rehabilitate. Other outside consultants (i.e. police officers) will provide instructions about short jail stays if the probationers are caught using drugs during their probation period.
The program requires in-house printing and office supplies (paper, pens, notes, etc.) for drug test results, notifications, and lectures/lessons materials. Computer hardware and software, as well as peripheries (a printer), are also required. Administrative services are needed to manage payroll and benefits administration; temporary help services will be used in case of employees’ illness or vacation. Maintenance of facilities and construction will create a suitable environment for the learning process of probationers.
Significant Line Items
The average wage of an adult educator in Montgomery, AL is 22$ per hour. 40.000$ per year will be the adult education teacher’s salary: 20,8 x 40 h. = 832$ per week; 832 x 4 = 3 328 per month; 3 328 x 12 = 39 936. In the following year, the teacher’s wage will increase up to 22$ per hour: 22 x 40 h. = 880 per week; 880 x 4 = 3520 per month; 3520 x 12 = 42 240 (annual wage of the second year). In the third year, the teacher’s wage will be 23$ per hour: 23 x 40 = 920 per week; 920 x 4 = 3680 per month; 3680 x 12 = 44160 annually.
The fund is thus able to cover additional benefits for the all-time employee. Medical assistants (as a temporary employee) wage per month will be 900$ (15$ x 15 h. per week), i.e. 108000 annually. An additional 16$ per month will be added in the second and the third year, resulting in an additional 200$ (approx.) annually.
Life insurance and medical insurance are needed because the employees will work with probationers who might use drugs prior to the drug tests and therefore can pose a risk. Workers’ compensation insurance has the same objectives.
Operating/Capital Requirements
Capital requirements for the project include the rental of buildings. An office building, approx. 1000SF will cost 1.000$ per month, i.e. 12000 annually. 1000SF will allow separating the office space into the drug testing section, teaching section, and administrative section. The cost of the rent is estimated to stay stable in the following years and will demand 12000$ per year = 36000$ for three years.
Funding Sources
The funding sources of the program depend on local taxes, i.e. property taxes and vehicle taxes because these are the main targets of the crimes committed by the probationers during drug use. 54000$ to cover the first year, 60000$, and 65000$to cover the second and the third years are to be provided from property taxes. 22500$ (first year), 23500$ (second year), 237000$ (third year) from vehicle taxes will also fund the project.
Fees for service will also be the funding sources (750$, 1.000$, 1200$): 10$ per month will be the fee for every probationer in the first year. The number of participants is expected to grow, hence the increase in the revenue source’s funds.
Other funding sources include other licenses and permits that can be provided by Montgomery Municipal Court and the Police Department of Montgomery. Court fines are also expected to be the revenue source as participants will pay fees every time they will be brought to court; short-term funds, as well as community development, are also revenue sources and can be provided by Virginia Estates community authorities. Federal drug programs can also cover some of the expenditures.
Funding Sustainability
The current economic state does not allow non-profit organizations to depend completely on one funding source, governmental or private (Besel, Williams, & Klak, 2011). Thus, although revenue sources in the form of taxes are less likely to cease, federal drug programs, short-term funds, and community development as revenue sources might decline. That is why expenditures on contingencies are also provided in the budgeting plan – the revenue source of them is the Central Alabama Community Foundation.
The program is expected to last at least three years; it will reduce crime rates in the community, decrease the workload of the Municipal Court and Police Department of Montgomery, as well as decrease the property and health insurance cost.
Conclusion
The main aim of the budget narrative is to justify the expenditures and explain the revenue sources (Pullen & Mueller, 2012). The budget narrative allows the funder to understand if the project can be implemented successfully and if it is balanced (Rubin, 2013); the project’s owner evaluates the budgeting plan using the budget narrative.
References
Besel, K., Williams, C. L., & Klak, J. (2011). Nonprofit sustainability during times of uncertainty. Nonprofit Management and Leadership, 22(1), 53-65.
Pullen, R. L., & Mueller, S. S. (2012). Preparing successful grant proposals. AJN The American Journal of Nursing, 112(1), 21-22.
Rubin, I. S. (2013). The politics of public budgeting: Getting and spending, borrowing and balancing. Washington, DC: CQ Press.