Case Study: Juggling The Impossible Budgets
The Team Leaders job includes preparing annual budgets for their team’s operations. There’s actually a salary budget and capital equipment expenditures budget. This will be the first time you as a new Team Lead will prepare both. Not only do you have to prepare the budgets, you need to go up in front of the funding committee to defend your requests. They expect hard numbers for rational.
The salary budget is for the team’s expected overtime pay for the coming year (time-and-a-half for 41 to 50 hours per person per week, and double-time for anything over 51 hours). Management expects overtime to be minimal – even better if there wasn’t any. The team members, of course, like overtime pay. This has to be carefully developed as if you run out of overtime budget during the year, and then emergency repairs come up requiring overtime you as the Team Lead need to personally discuss your emergent need with the Chief Financial Officer, which is usually not a good thing.
Last year your predecessor did run short about three-quarters of the way through the fiscal cycle, and took a lot of heat for unplanned expenditures. But he also had to deal with some major unplanned repairs. Because of his shortfall, this year’s committee will be closely examining your requests.
The other budget is capital equipment expenditures. Manufacturing equipment is constantly being replaced and even though your maintenance team helps install the equipment, Team Leads generally don’t know the equipment maintenance requirements are until the equipment is delivered along with maintenance documentation. Some new manufacturing equipment was installed just before you took over your team, and you have several major requirements for new test equipment. Your predecessor didn’t buy any new test equipment for the past five years, so now a sizable percentage of test equipment is due for replacement due to normal wear and tear.
You have one week to build your budget proposals and present to the funding committee.
Download and review these files to help with your case study analysis. All budgeting data and expenditures is actual data from a previous year. Use this data to prepare your request.
Last year’s budget requests.
Last year’s capital equipment expenditures.
Last year’s actual salary overtime expenditures.
Your blank worksheets.
Use this report form for explaining your budget requests.
Upon submitting, this report will be sent to your Coach for evaluation.
