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The Tadshal treasurer has agreed that the costs of general administration, fundraising and Charities Act administration will be shared by the projects using a ratio based on the 25 hours the co-ordinator spends on the different projects. This is very easy to do using a spreadsheet on a computer.

The first eight headings at the top are the different cost centres and the first row, immediately below, shows how the co-ordinator’s hours per week are apportioned to each cost centre.

In the third row the co-ordinator’s salary is apportioned (split-up) between the different cost centres. This is very easy to do. For example, the figure (£)5,963 in the second row under Advice & Advocacy is the co-ordinator’s salary, national insurance and pension contribution (£21,296) divided by the total number of hours she works on projects (25) multiplied by the number of hours she spends on this particular activity – i.e. £21,296×7/25 = £5,963.

So £5,963 is the proportion of the co-ordinator’s salary that has been allocated to the Advice & Advocacy cost centre based on the time recorded on the time sheets.

The other figures in the Salary row are calculated in a similar way. The 7/25 is a ratio of the time spent on one activity (cost centre) to the time spent on all activities. One could just as easily use a ratio based on hours per month or year if that was more convenient.

The next row is volunteer cooks. Only two cost centres, the Lunch Club and Events, use cooks. The cost of £750 has been split between these two cost centres by estimating that the events (Christmas and summer) will spend £35 on volunteer cooks and the rest of the money will be spent by the lunch club.

The next row – Other Volunteers – allocates the expenses paid to general volunteers to those cost centres (projects) that pay volunteer expenses by estimating the annual cost of volunteers used by each cost centre. No volunteers are used by Advice & Advocacy, Counselling or Commercial Translation, as these activities are undertaken by the co-ordinator and freelance therapists, no charge is made to these cost centres for volunteers.

The next two rows – Insurance & Maintenance and Rent of Office & Cleaning – are general overheads. There are a variety of ways in which they could be allocated including by:

  • floor (office) space used
  • funding levels for different projects
  • the co-ordinator’s time spent on different projects.

Some projects, like Home/NHS Welfare Visits, do not use floor space and in this case some projects do not receive specific funding. The treasurer felt that it was fairer to use the co-ordinator’s hours spent on the projects as the basis for the apportionment.

The figure 140 in the cell (entry) for Insurance & Maintenance in the column headed Advice & Advocacy is obtained by dividing the total for Insurance and Maintenance £500 by the co-ordinator’s hours per week: 500×7/25 = £140.

The co-ordinator has estimated that Advice and advocacy accounts for 33% of the telephone usage. So one third of the telephone has been charged to this cost centre and the balance has been apportioned out to the other cost centres using the ratio of the co-ordinator’s hours.

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Last updated: Mon, Mar 31 2008 - 04:37:28 PM

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