Oneota School for Children: A Nonprofit, Flexible Budgeting Case
Only a few weeks into his three-year term on the board of directors for the Oneota School for Children (OSC), Brian began to second-guess his acceptance of the role of Treasurer. Brian was new to town and thought getting involved in his child’s school would be a good way to engage in his new community. It was clear after he started preparing the budget that this role might be a bigger job than he anticipated. Brian had not been able to get the budget to balance, and after presenting the numbers to the board, he was not sure their suggestion to increase enrollment would help. The board was depending on Brian to provide financial support to make these decisions. Brian left the board meeting with more questions than answers. Would increasing three-year-old enrollment really balance the budget? What non-financial factors should he consider? If increasing three-year-old enrollment wouldn’t work, what would? What would be his final recommendation to the board?
- Classify budgeted expenses as fixed or variable and identify cost drivers
- Apply flexible budgeting principles to changes in enrollment to determine net income or net loss
- Evaluate non-financial factors affecting organizations while budgeting
- Make decisions based on financial and nonfinancial budget factors