Communities in Schools of Randolph County Inc. Budget Critique

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Table of Contents

Introduction
Discussion
Conclusion
References

Introduction

Communities in Schools of Randolph County Inc. is a nonprofit organization that works with vulnerable youths to ensure they graduate. Since more young people are becoming vulnerable due to global changes such as COVID-19, the incorporation requires sustainability to cater to their needs. The incorporation’s success depends on the quality of the budget made. This paper critically analyzes the budgets and investigates whether the budget is strong enough to achieve the organization’s goal. Budgeting is meant to assist an organization in identifying priorities, introducing a financial plan, presenting conflicts with the financiers, and encouraging good stewardship. Failure to meet the required standards makes the budget weak and unable to solve the challenges facing the organization.

Discussion

The functional features of the budget are detailed and offer accountability because of the additional feature of categorizing the funds with or without donor restrictions. As a nonprofit organization, accountability is supreme, and the incorporation upholds it by ensuring that all accounts with restrictions are noted for further follow-up to be launched. However, some of the functional components of a budget, such as one-time expenditures and variable costs, are not presented and may jeopardize accountability in the end. According to the Benefits Theory, the financiers of nonprofit incorporation have a primary goal of helping vulnerable people in society (Kenno et al. 2018). The incorporation’s objectives are in tandem with the financier’s goals, but accountability may not be achieved unless the functional features are present. During the budgeting process, accountants should focus on the functional features to enhance accountability.

Nonprofit organizations’ budgets must have a direct relationship with the strategic goals and must show priorities. The budget aligns with the strategic goals when the priorities reflect increased funding and outsourcing for needy people. However, the budget focuses on acquiring more donations and does not explain how more vulnerable young people will be recruited to benefit from the program. While the expenses on support services are nil, the fundraising and program services are 12,667 and 345,311, respectively. The budget would have been favorable if it had prioritized support programs to increase the number of beneficiaries. Accounting principles demand that a budget accounts for the depreciation and appreciation of assets to enhance accuracy in the final budget (Melnychuk & Zalyubovska, 2019). Most of the assets recorded in the budget did not include appreciation and depreciation, which might further affect the accuracy of the budget presented.

The essence of the Benefits Theory is to ensure that the activities conducted by the incorporation have the greatest interests of the beneficiaries. The number of beneficiaries should typically be reflected in the budget in the expense column. The absence of the beneficiaries in the expense section indicates that the nonprofit organization’s budget meets the required needs. In public finance, the political will to pay for benefits attracts a tax that may affect the budget’s overall outcome. Failure of the budget to categorize the source of funding as either political or apolitical tends to complicate the taxation process in the final analysis (Melnychuk, & Zalyubovska, 2019). The Benefits Theory underscores that the organization’s expenditure must be in tandem with the benefits received by the vulnerable youths who are the program’s beneficiaries.

The main advantage of the budget is that it meets the accounting principles, making it efficient to carry out the objective as required. The administrative, excess, and compliance costs are clearly documented to enhance certainty and accountability. The total assets, liability, and corresponding changes are clearly stipulated, likely enhancing accountability in the incorporation. The decisions based on the budget are likely to be accurate, and the number of vulnerable youth not graduating from high school may be lowered. It is prudent to note that the budget is prepared per American standards and hence can be understood by any accountant in the world. The budget further incorporates payroll protection for financial viability and the liquidity and availability of resources at the organization whenever a need arises (Samandarova, 2021). The budget keeps the current situation in mind and will likely be more sustainable. Considering the global COVID-19 pandemic and planning for it the budget is advantageous, and sustainability is guaranteed.

A budget’s spending categories and income projections determine a budget’s strengths and explain all expenses incurred. The incorporation’s budget offers a spending category that takes money out of the organization. Unlike other budgets that fail to include accurate and enough spending categories, the given budgets illustrate all types of expenditures, including programs, salaries, and equipment required for the organization. Irregular expenses are sources of errors in many budgetary estimates. The given budget is more substantial because it shows all the irregular expenses to help prepare the balance sheet in the long run (Kenno et al., 2018). The realistic written goal of reducing the number of vulnerable youths who fail to graduate improves accountability and gears the budget towards raising more funds to align with the goals. The Benefits Theory is likely to be achieved in the discourse because the budget focuses on programs to raise funds to help vulnerable youths graduate. Another necessary strength in the budget is the coherence with the organization’s goals of facilitating the graduation of vulnerable youths.

The Communities in Schools of Randolph County Inc.’s budget has weaknesses in its preparation, communication, and teamwork. A comprehensive budget requires that all stakeholders affected by it offer a statement to show whether their requirements have been achieved or not. Since the incorporation is a nonprofit organization, the activities’ essential part is ensuring the most significant number of vulnerable youths get assistance. A statement from the department mandated to get the vulnerable youth and ensure their well-being has been addressed (Samandarova, 2021). The absence of the statement from the vulnerable youth recruitment department jeopardizes the organization’s primary objective. The budget would be more authentic if the expenditure on fundraising were followed by another expenditure on the welfare of the vulnerable to ensure that the Benefits Theory is achieved.

Conclusion

The given budget is accurate because it follows the best considered by the board. The financial reports are analyzed quarterly to ensure they align with the organizational needs. The budget has made specific considerations by including exceptional contributions to the organization. When calculating the net worth of an organization, the in-kind contribution is customarily left out and consequently leads to inaccurate records. Including all incomes into the incorporation, regardless of the source, shows that the records are accurate and that the preparation of the final balance sheet becomes easy. Although the budget has flaws and weaknesses, it is imperative to state that the needs of the vulnerable youths are met, and the budget further adheres to the budgeting best practices.

References

Kenno, S. A., Lau, M. C., & Sainty, B. J. (2018). In search of a theory of budgeting: A literature review.Accounting perspectives, 17(4), 507-553. Web.

Melnychuk, N., & Zalyubovska, S. (2019). Conceptual Approach To Understanding Budget Management In The Public Regulation System.Baltic Journal of Economic Studies, 5(5), 90-99. Web.

Samandarova, G. M. K. (2021). Advanced experiences in budget transparency and opportunities for their application in Uzbekistan.Asian Journal of Multidimensional Research, 10(8), 190-198. Web.

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Communities in Schools of Randolph County Inc. Budget Critique

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