You have been appointed by the new executive director to chair a committee of
agency administrators charged with (1) conducting an inventory of the agency’s
various services and activities, (2) recommending a program structure, and (3) recommending
responsibility center designations for each program. The committee
has completed an inventory of agency services and activities (see the following
list), including the number of clients served and an approximation of annual
expenditures. Based on this inventory, the committee must now make a recommendation
to the executive director on a program structure and the designation of
responsibility centers. As chairman, what will be your committee’s recommendation?
How many programs will be in your program structure? What are they?
What is the rationale for each program? What type of responsibility center designation
(expense, revenue, profit, investment) will you assign to each program?
Inventory of Services and Activities
The Miami Cuban-American Service Center
Senior Services
The agency operates four facilities including three senior centers and one adult day
care center. The three senior centers provide a hot noon meal, socialization and
recreation services, and transportation to and from the facilities. About 250 seniors
are served each week at the three senior centers. The combined total operating
costs for all three senior centers are about $3,500,000 annually. The funding sources
include the local area agency on aging, the United Way, the City of Miami, donations
from the seniors themselves, and some endowment income.
The adult day care center provides the same services as the senior centers
(hot noon meal, socialization and recreation, and transportation), but because of
the frail nature of most clients, the facility also provides health services including
routine physician screening and administration of medications under the supervision
of a registered nurse. The adult day care center can serve a maximum of 40
clients a day; many clients attend five days per week. The annual budget is
approximately $500,000. The major sources of revenue for the adult day center are
payments from insurance companies and managed care companies plus fees
from family members. The adult day care center also derives revenue from two
Programs, Program Structures, Program Managers, and Responsibility Centers 17
Financial Management for Human Service Administrators, by Lawrence L. Martin. Copyright © 2001 by Allyn and Bacon, a Pearson Education Company.
ISBN: 0-536-12114-1
small government contracts and as well as some revenue from the endowment
fund.
Children’s Services
The agency operates two child care facilities. One facility is exclusively funded by
the federal Head Start program. The other facility, a regular child day care center,
is funded by a combination of city contracts and private donations. Some endowment
income goes to both facilities. The combined cost of operating both facilities
is estimated to be about $1,500,000 per year.
The children served in the Head Start facility must be from low-income families.
The children served in the other day care facility come from families with
higher incomes including some families that pay the full cost of care themselves.
The two facilities serve a combined total of 150 children per school year: 75 children
at each center in classes of 25 children each. In addition to traditional
preschool activities, a hot noon meal and transportation to and from the center is
provided for children at both facilities. Children in the Head Start program also
receive dental and health services and their parents participate in structured parent
involvement activities.
Endowment
The agency’s endowment fund stands at $22 million.
18 C H A P T E R 2
Financial Management
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