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Introduction
The chief Administrator of an Uptown Clinic, Dr. Stephanie White, is concerned about the
dilemma of coping with reduced budgets next year and into the foreseeable future. This
clinic is a community mental health agency but she wants to increase demand for services
along with the budget cuts. In order to plan this change she must first identify where costs
can be cut or reduced but by still keeping the agency functioning. With the data given to
me from the past year I will provide her with a dollar range of costs to reduce the budget.
Then I will cut $94,000 in cost along with the priorities those cuts can be made without
impact on operations or the quality care of the serves they provide. In conclusion I will
provide my thoughts and views on how she can prepare for this reduced budget.
Cost Management
Data set:
Program Area
Administration Costs Cuts Revised Costs
Salaries:
− Administrator 60,000 1,000 59,000
− Assistant 35,000 1,000 34,000
− Two secretaries 42,000 -1 21,000 21,000
Supplies 35,000 -0.25 8,000 27,000
Advertising & Promotion 9,000 -0.25 2,000 7,000
Meetings/dues 14,000 -14,000 14,000 0
Purchased Services:
− Accounting and billing 15,000 2,000 13,000
− Custodial 13,000 1,000 12,000
− Security 12,000 12,000
− Consulting 10,000 1,000 9,000
Community Mental Health Services
Salaries (2 social workers) 46,000 2,000 44,000
Transportation 10,000 -0.5 5,000 5,000
Outpatient Mental Health Treatment
Salaries:
− Psychiatrist 86,000 1,000 85,000
− Two secretaries 70,000 -1 35,000 35,000
Total Costs Total Cuts Revised Total Costs
457,000 94,000 363,000
Worst case analysis:
I know that administration can not function efficiently without the assistant and at least
one secretary. They each can pick up half of the load from that loss. The meetings can go,
