Budgeting and Cost Cutting

Details: 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. In order 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


Give a dollar range of costs to reduce budgets (worst and best case analysis).

You need to cut $94,000 in cost. Prioritize those cuts that can be made without impacting the operation or quality care of the organization.

How would you advise Dr. White to prepare for reduced budgets? For more information on creating Excel Spreadsheets, please visit the Excel Lab.