代做PA 532-01 Public Financial Management HOMEWORK ASSIGNMENT #2代写数据结构语言

PA 532-01

Public Financial Management

HOMEWORK ASSIGNMENT #2

Please read the Budget Cuts case study below and then follow the instructions.  This assignment is due by email to the instructor at rcalia@stuart.iit.edu by 6:00 p.m. on September 30th. The case is adapted from Golembiewski, R. Cases in Public Management, pp. 30-31.  It is available on Blackboard – Budget Cuts Homework Assignment.

You should refer to class discussion on August 26^th and September 9^th regarding gap closing strategies and personnel actions to help frame. your answers.

Notes:

· You cannot cut union employee salaries because they are covered by a contact. You can freeze or cut non-union salaries.

· Grants are “free” money from another government (intergovernmental revenues).

BUDGET CUTS CASE STUDY

You are a financial analyst for a small governmental agency known as the Policy Analysis Support Agency (PASA). PASA is divided into five small divisions, each doing policy and data research for all agencies in state government. A new directive has just come down from the Governor through your Director, Ms. Beecher. The Governor has asked all agencies to project what they would cut if they had to reduce their budgets by 10 percent next year. As usual, Ms. Beecher simply passes that request along to you. The total PASA budget for next year is $13,700,000.

Division A is the largest division. Division A, as it is known, does in-depth policy analysis for the two biggest departments in the state, the Health Department and the Human Services Department. Division A has a total budget of $4.8 million.  Of that amount, $3.3 million is from state revenue sources and $1.5 million is from grants. The Division employs 25 full time policy researchers and related staff paid for by state funds and another 10 full-time and 10 part-time paid for with grant funds.  20 of the full-time policy researchers are in a union.  The remaining 5 full time employees and all the grant funded employees are non-union employees.

Division A’s annual budget is 35 percent in salaries; 20 percent in hardware; 10 percent travel and professional development; 10 percent office supplies; 25 percent miscellaneous.

Division B is a moderate size division; it works heavily with the expanding economic development agencies in state government. There have been strong suggestions that a new statewide Department of Commerce is in the works and this division could be transferred to them. Division B’s budget has grown by 15 to 20 percent a year for the last five years, while most of the rest of the PASA’s budget has remained stable. Division B has 20 employees paid for with state funds and another 8 paid for with grant funds from the State University’s Research Division on economic development.  18 of the full-time policy researchers are in a union.  The 8 grant funded employees are non-union employees.

Division B’s budget is $3,500,000: 50 percent salaries; 25 percent hardware; 10 percent travel; 5 percent office supplies; 10 percent miscellaneous.

Division C works with the traditional administrative functions in the older state agencies. Its budget has been shrinking by ten percent a year, and very few agencies call on Division C to do their policy work today. Salaried employees number 15, with many years of service, and most have “topped out” in their classified positions in salary. Division C has no grant or outside monies. All of the employees are in a union.

Division C’s budget is $2,000,000: 75 percent salaries; 15 percent hardware; 5 percent office supplies; 5 percent miscellaneous.

Division D is the smallest division and works with small licensing boards which have little research and policy analysis staff themselves. Its budget has been stable for years, with little dissatisfaction or concern with Division D’s past, present or future. There are 10 employees; 6 of them are policy analysts. All of the employees are in a union.

Division D’s budget is $1,400,000: 60 percent salaries; 20 percent hardware; 5 percent travel; 5 percent office supplies; 10 percent miscellaneous.

Division E is the “support” division of the PASA. This group runs the personnel and finances for PASA and also staffs the data and computer programmers for all the divisions work. Division E has grown, especially since it gets $80,000 a year in grant funds from Division A and Division B. It has 5 employees. None of the employees are in a union.

Division E’s budget is $2,000,000: 40 percent salaries; 40 percent hardware; 5 percent travel; 5 percent office supplies; 10 percent miscellaneous.

CASE ASSIGNMENT INSTRUCTIONS

Your job as a financial analyst is to propose and defend a 10% reduction of the total PASA budget.  To do this, you must propose what spending to cut in each PASA division.

Assignment Style

· Put your name on  your assignment!

· Please use complete sentences in your narrative.

· Your answers should include the reasons why you are making decisions. You should review class notes and PowerPoints to help provide reasons why you are making these particular decisions.

· Please use excel tables and charts to illustrate each set up of reductions as well as summaries of total reductions. Each chart must be described with brief narrative.  Use gridlines in your charts/tables.  Put titles on top of each chart or table.

THE ASSIGNMENT

This year’s PASA budget by division is shown below.

 

The assignment is to cut 10% from this year’s total budget to propose next year’s budget.  A 10% cut would equal $1,370,000 for a new proposed budget of $12,330,000.  Therefore, you need to propose a total of $1,370,000 in cuts.  

· The cuts can be in differing amounts per division; you do not have to cut spending in every agency.

· You must give reasons for every action taken.

· You cannot reduce union employee salaries because it is not allowed under the terms of the collective bargaining agreement (so you cannot take an action such as cutting union employee’s pay by 10%).  You can, however, eliminate union positions.

· You can cut non-union (professional) salaries by requiring furlough days. A furlough requires employees to take a number of days off without pay. However, if you do this, you can only cut up to a total of 5% of a person's salary.  You can also eliminate non-union positions.

To figure out how much to cut from each agency, you need to calculate how much you will cut from each division’s various line items for expenses and then to explain why you are making particular cuts (or not making cuts).

You are not required to layoff (i.e., fire) individuals to reduce spending.  However, if you decide to do layoffs to reduce salary costs, you should take the total amount of salaries and divide it by the number of FTEs working.  That will tell you how much each FTE costs and then you can calculate how many people you will need to layoff to reach a targeted reduction. You probably don’t want to cut positions funded by grants as you control those funds and the state cannot cut them.

HOW TO COMPLETE THE ASSIGNMENT

1) Prepare an excel spreadsheet for the budget for each division in Excel.  Then calculate how much each division is spending per line item. This will give you the base information you need to start to figure out how much you need to cut from various line items in the agencies to come up with $1,370,000 in spending reductions.

Example: Division A Spreadsheet

To figure out how much each employee costs, take the $1,680,000 figure for salaries and divide it by the total number of full-time equivalent employees (40 – see calculation below) to get an average FTE cost figure of $42,000.

How we get 40 FTEs

Assume a total of 40 full time equivalent employees for this division

· 25 full time employees (state funds)

· 15 full time equivalent employees on grants (the 10 part time employees equal 5 full time equivalent employees; add those 5 to the other 10 full time grant funded employees and you get 15 full time equivalent employees)

Note: It is not specified if there are any part time employees for other agencies – assume they are all full time.  

2) Identify budget cuts per line item for each division budget

First, decide how you want to generate budgetary savings.

For example, for Division A, you could…

· lay off 5 FTEs and save $210,000 in salaries ($42,000 * 5)

· Cut $200,000 from travel

· Cut $200,000 from office expenses

· Cut $200,000 from miscellaneous

· Total savings would equal $810,000.

· Now, you need to find $560,000 in savings from the other four agencies

Then, explain in a narrative briefly why you chose to make reductions.  If you decide not cut certain line items, explain why you made that decisions.

In this section, you should include a summary table for each agency that shows:

1) The original budget per line item

2) Your proposed new budget

3) The amount of savings per line item

4) The total amount of savings

3) Summarize your total results in a final excel budget spreadsheet and a position spreadsheet. Please provide a brief explanatory narrative to accompany the table that summarizes why you made these decisions.

Here is an example of the summary excel spreadsheets.