Nonprofit Agency Budget Process

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Introduction
The management of any funding or revenues for an agency is extremely important to the financial health and well-being of the agencies existence. Similar to the public section, the nonprofit sectors utilizes a budget to assist with managing the operating expenses. While it is common for private and public agencies to operate with expenses much greater than that of nonprofits, nonprofits also have a process in which their budget system operates. Usually driven by the organizations mission and vison, the budget process is the process or steps a nonprofits choses to goes about building its fiscal budget(Dropkin, Halpin, La Touche, 2011). A good budgeting process also helps explain fixed costs that are related to reliable revenue. …show more content…
Without a policy and procedure, the agency tend to operate more unorganized, which can sometime lead to agency deficits (Nonprofits Assistance Fund, 2014). As to the financial policies and procedures, the provided budget does a great job with explaining the process for any revenues or expenditures. The revenues and expenditures listed should explain the financial processes utilized by the agency to gain income. This section should illustrate its conformance with standard financial management principles. It also usually includes fund description and structure, the basis of budgeting and accounting, all financial policies along with a description of the budgetary process (Myser, 2017). Developing and adopting a written financial policy can be essential for the agencies daily financial practice and health. Despite the size of the agency, regulation around expenditures and revenue is extremely important for any nonprofits. Financial policies clarify the roles, authority, and responsibilities for essential financial management activities and decisions. In the absence of an adopted policy, staffs are likely to operate under self-assumptions which could prove to not be accurate and productive. The budget also includes fund discretion of the income and expenditures sub categories. The income sections include …show more content…
The capital budgets planning are usually created to serve the acquirement and capital assets such as heavy equipment, IT infrastructure and development or real estate. The capital budget process entails identifying the resource, providing an analysis of overall cost, and financing the resource. The provided budget lacks to provide a complete discretion of the agencies capital budget. A capital budget usually relates an agencies financial position regarding its assets, liabilities, and net assets. Smaller nonprofits do not focus on this aspect of the overall budget because they are often struggling to maintain programming in the red as it is. A capital budget is essential to ensure a funding plan has been created above and beyond the operating budget. This may include a capital campaign, issuance of long-term debt, the sale of other assets such as investments, and so forth. While provided budget does list the agencies investment income, it lacks to provide an overview of the investment purchased by the agency. Capital budgeting involves the nonprofit to plan for long term expenses over a period of time that assists with generating cash flow. Their also appears to be a lack of a time period as to what fiscal year the investment was completed and the time frame expected to receive the income from the investment. In the provided budget, there is lack of clarification as to
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