Problem
Budget Revisions
The scenario is altered to include the following event:
• I.C. Knott, the Executive Director of CRAC has resigned from the Commission after confidential sources leaked that she: failed to disclose her partial ownership in a company that manufactures cryonic burial equipment, and the mortgage on I.C.'s house is held by Freon Bank.
• Financial Implications of I.C.'s Resignation Since I.C. has handpicked you to craft CRAC's budget, and her veracity has been called into question, and its decisions must be questioned. Decision makers could react in several ways in attempting to assure the public of the stability of CRAC, notwithstanding the revelations regarding I.C. and her subsequent resignation. For example: Decision makers could elect not to adopt the budget you present and request an outside accounting firm to draft a new budget. This action would result in a costly expenditure of approximately $1.8M to contract for the services of an accounting firm.
• Question your methodology and budget based on I.C.'s conflict of interest (the assumption being that you are tainted by your association).
• If CRYOut!'s input featured largely in your budget, you may need to reconsider any controversial revenue elements that they promoted such as taxation, defunding of other programs, and entitlement status.
• If I.C.'s accusations are indeed true and there are other commissioners with conflicts of interest, those accusations could affect your budget, specifically in the salaries and benefits area. The salaries and benefits figure could go up if more personnel are required to replace the existing commissioners. Conversely, salaries and benefits could decrease if an independent firm is brought in to craft a new budget. There are a total of 5 commissioners, including I.C., and each commissioner's salary is $100,000 with a benefits package valued at $25,000.
With I.C.'s resignation, CRAC no longer has an executive director.
• Without leadership, the decision makers may believe your budget cannot be implemented. Because I.C.'s resignation obtained wide notoriety and was likely ill-received by the public, decision makers, to calm public outrage, may not want to pursue controversial funding sources such as increased or new taxes. Considering that CryBur, Inc. is tangentially implicated in I.C.'s conflict of interest, decision makers may be concerned regarding potential problems from the other two organizations. Alternatively, the decision makers may want to embrace the inputs of CRYOut more fully! and CryERS as a way of distancing themselves from any CryBur, Inc. scandal.
• Consider the above, and any other impacts you may have discerned on your own, and what, if any, impact they may have on your budget.
• Balancing the Budget
• Creates a modified budget (Make sure to address the overall strategies for maintaining a structurally balanced budget) which include: Expense control; Resource management; Taxation; Service delivery; Revenue generation; Debt management.
• Explains the planning process and how items were prioritized to establish a budget that is balanced, self-funded, and has a net zero cost.