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. Please see attached file for some data from the past year.
1. Give a dollar range of costs to reduce budgets (worst and best case analysis).
(1) First determine whether the following costs are:
All committed cost and how much
Discretionary cost and how much
Part committed cost (how much) and the other part is discretionary cost (how much)
(2) Then determine total amounts of committed and discretionary costs
2. 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.
Explain the impact of eliminating or cutting down the following costs:
Transportation for social workers
Professional Development opportunities of the staff
Advertising and promotion
Maintenance and custodial care
Administrative assistant and one secretary
3. How would you advise Dr. White to prepare for reduced budgets?
Explain how Dr. White should build her case for even higher resources instead of cuts.
*Some helpful instructions are listed underneath each of the 3 questions.
The appropriate derivation of a cost is shown.