Group homes for the elderly or children need basic operating expenses included in their budget for the house to function daily. Taking care of those with special physical or mental health needs entails a sizable budget for a comfortable living. That means determining expenses and where to allocate them are two of the essential parts of building a budget.
An attorney or a financial professional should review the budget to guarantee that it covers all basic operating expenses. In addition, the budget must indicate the expected income sources used to pay for the expenses. An attorney will review to see it covers both legal and operational costs.
Operating Expenses Inclusions
The operating expenses for a group home cover all the daily and monthly costs. It comprises the staff’s salaries, wages, benefits, and building expenses such as rent, housekeeping, maintenance, repair, and utilities.
Of course, the home’s operational expenses also indicate monthly expenses for food, supplies, clothing, materials, and other fees for permits and licenses. It could also include expenses for travel, medical services, and recreation, depending on what has been stated on the budget.
In addition, the employees’ salary covers operational tasks, transportation, financial services, and payroll management. Part of the budget may also be set aside for other indirect or administrative costs. Basically, a group home’s operating expenses cover everything spent maintaining it providing housing to its residents every month.
Building the Budget
When building your budget, you can utilize existing financial records or an existing budget from another group home to get an idea about the size of your operational expenses. Your last year’s budget may also help you identify projections and allocation for all items in the budget.
First, you need to list all the income sources and amounts you will need for a total operational budget. That may include government contracts, resident fees, investment income, grants, and donations.
Allocating and Adjusting the Budget
If your donors set a specific allocation for the funds they donated, you need to honor that. For example, if a foundation restricts its grant solely for mental health services, you need to allocate their funds for that only. Other donors may also want you to limit their donations to recreation or allowances, etc. You get the idea.
If so, you need to adjust allocations, such as decreasing inessential expenses to increase funds for the important stuff. You should avoid including uncertain income sources to fill gaps in funding and keep expected costs lower than the projected income. It’s better to set specific parts of the budget for salaries and indirect expenses.
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Categorizing the Budget
To better control your budget, you can use a standard template that puts specific allocations in columns, including the item name, description, and expense amount. You may also divide your budget and income into four quarters in one fiscal year.
In addition, be specific about the items on your budget, such as facility expenses, salary, benefits, consumables, and more. You may also include a breakdown of resident allowance and employee salaries for each one.
Conclusion
Running a group home is almost impossible without an operational budget that’s well-allocated. You need to create a system around controlling expenses and making sure that it adheres to the restrictions set by your donors. Doing these things ensures that your group home will continue to function and provide housing to those who need it.
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