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• Describe the director’s role in obtaining funding for a center.
• List several resources potentially available for child care financing.
• Explain how tuition rates may be determined.
• Describe several types of financial reports that funders may require.
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• Start-up capital
• Community support
• Grants
• Bank loans
• Tuition
• Community resources
• Government funding
• Foundations
• Fund-raising
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• Sources:
– personal capital
– business loans
– investor
– foundation
– community support
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1. What role does the director play in obtaining funding for a new center?
2. When approaching a bank for a loan, what documents or information do you think they will require?
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• Directors report to funders to give them information on how the business is doing
• Funders could be…..
– Stockholders investing for profit
– School board members
– Members of a parent co-op
– Organizations providing support (i.e., United
Way, employer sponsored centers)
– Individuals who own the center
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• Accurate, timely, and understandable reports are necessary
– Center Enrollment Report
– Accounts Receivable Report
– Budget Comparison Report
– Statement of Financial Position
– Income Statement
– Annual Report
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• Report includes:
– Number of children enrolled
– Number of children in each age group that center serves
– Projection of children who are expected to move up to next age group on a month-bymonth basis
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• Indicates the amount of tuition that is owed
– Should be generated on a weekly basis
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• Indicates what was spent the proceeding month in each category compared to the budgeted amount in each category
– Should include actual and budgeted spending for proceeding month AND year-to-date
• Report used to:
– Spot cash flow problems
– Analyze expenditures
– Project remaining expenses
– Revise budget (if necessary)
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• Report indicates:
– Assets (what center owns)
– Liabilities (what center owes)
• Should be generated on monthly basis
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• Statement reflects:
– Total revenues earned in fiscal year
– Total expenses incurred in fiscal year
• Net income
– If income is greater than expenses
• Net loss
– If expenses are greater than revenue
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• Final report
– Shows amount budgeted in each category and amount spent
– Up-to-date cash flow statement
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• It is the director’s responsibility to manage available resources
– Create policies and procedures
– Implement and follow these policies and procedures
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• A quality center requires funding from:
– tuition
– government support
– private support
– sponsoring agencies
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1. Why is it important to implement financial policies and procedures?
2. What do you think would happen if a director was lax in collecting tuitions from parents?
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• Results of lax financial policies and procedures results in:
– Reduced financial resources
– Reduced salaries
– Staff reduction
– Limited money for supplies and equipment
– Lowered program quality
– Possible center closure
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• Three ways funds can diminish
1. Collections
2. Fraud
3. Lawsuits against center
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• Outline financial procedures in parent handbook
– Timing (when tuition is due)
– Method (check, credit card, cash, voucher)
– Number of overdue reminders
– Penalty for late payment
– At what point will the child not be able to attend program because of past due payment
– Under what conditions can child re-enter program
(if space is not filled, if parent pays in cash)
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• Fraud is embezzling money
– Theft of cash
– Charging for more hours than actually worked
– Keeping person on payroll for a period after they leave and writing extra checks to themselves
– Charging personal expenses to the business
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• To prevent fraud:
– Be aware of financial records (cross-check time cards, payroll)
– Do not accept cash
– Have enforceable and enforced financial policies
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• Lawsuits can be deterred
– Establish policies that will reduce likelihood of being sued
– Training staff and appropriate documentation
– Appropriate supervision
– Maintenance of equipment, building, grounds
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• Lawsuits can be deterred
– Policies about who has access to premises and who may take the children
– Review policies on hand washing, food storage, and food serving
– Maintaining positive relationships with families
– Policies to maintain a financially stable center
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• Operating a quality center requires significant amount of funding
• It is director’s responsibility
– Have a knowledge of funding sources
– To operate within a balanced budget of appropriate revenues and expenses
– To establish and maintain financial policies and procedures to protect against collection issues, fraud, and lawsuits
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