Fish

Dr. Stephanie White, the Chief Administrator of Uptown Clinic, a community mental health agency, is concerned about the dilemma of coping with reduced budgets next year and into the foreseeable future but increasing demand for services. To plan for reduced budgets, she must first identify where costs can be cut or reduced and still keep the agency functioning. Below are some data from the past year. Program Area Costs Administration Salaries: • Administrator $60,000 • Assistant $35,000 • Two Secretaries $42,000 • Supplies $35,000 • Advertising and promotion $9,000 • Professional meetings/dues $14,000 Purchased Services: • Accounting and billing $15,000 • Custodial $13,000 • Security $12,000 • Consulting $10,000 Community Mental Health Services • Salaries (two social workers) $46,000 • Transportation $10,000 Outpatient mental health treatment Salaries: • Psychiatrist $86,000 • Two Social Workers $70,000 1. Provide a dollar range of costs to reduce budgets (worst and best case analysis). 2. She needs to cut $94,000 in cost. Prioritize those cuts that can be made without impacting the operation or quality care of the organization. In the Excel spreadsheet you are to prepare 3 different budgets for 3 different budget reductions. One will be a worst case analysis, one will be a best case analysis, and the other will be a reduction of $94,000. 2. In the Word document you are to explain your budgets and answer the other questions in the assignment. a. The Budgets - Explain the division of costs between committed and discretionary. - Explain each budget. 1. How did you decide on your budget reductions? 2. How will operations be affected?

1. This is only a first pass; obviously Dr. White would be able to specify more precisely which are committed or discretionary costs. Students will have different ideas about what is committed and discretionary. The important thing is for them to be able to explain and justify their classifications.

Program Area Committed...