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- IN THE PREVIOUS VIDEO,
WE LEFT OFF AS MIKE, AN AGENCY EXECUTIVE,
ASKED HOW HE SHOULD BEGIN THE PROCESS OF A COST ANALYSIS.
IN THIS VIDEO, WE'LL LEARN HOW TO TAKE THE FIRST STEP
TOWARDS DOING A COST ANALYSIS.
- READY WHEN YOU ARE, MIKE.
- GREAT.
HELP ME THINK ABOUT THE DATA WE NEED TO GATHER
ABOUT OUR IN-HOME SERVICES TO COMPLETE A GOOD COST ANALYSIS.
- A GOOD COST ANALYSIS RELIES ON INFORMATION
ABOUT A PROGRAM'S ACTIVITIES
AND CONSIDERS THE VALUE OF ALL RESOURCES
USED WHEN IMPLEMENTING A SERVICE.
LET'S GO THROUGH ALL OF THE INGREDIENTS
REQUIRED TO RUN YOUR IN-HOME SERVICES.
- THERE'S STAFF TIME, TRAVEL, TRAINING,
FACILITIES, SUPPLIES, CONTRACTED SERVICES.
- THAT'S A GREAT START.
AN INGREDIENT LIKE TRAVEL COULD BE BROKEN DOWN FURTHER
INTO THE COST OF THE CAR TO THE AGENCY, GAS,
TIME SPENT TRAVELING, AND THE COST OF TRAVEL VOUCHERS
FOR PARTICIPANTS, IF YOU PROVIDE THOSE.
IN ADDITION, WHEN YOU SAY STAFF TIME,
IT IS IMPORTANT TO RECOGNIZE THAT STAFF SPENDS TIME
DOING MANY DIFFERENT TASKS THROUGHOUT THE DAY.
FOR EXAMPLE, THEY DO ASSESSMENTS,
SPEND TIME WITH CLIENTS, WRITE NOTES,
AND ATTEND MEETINGS.
- THAT'S REALLY HELPFUL.
WHAT'S A GOOD WAY TO GATHER INFORMATION
THAT ISN'T INCLUDED IN BUDGET REPORTS,
LIKE TIME SPENT TRAVELING
OR TIME DOING ASSESSMENTS FOR THE IN-HOME PROGRAM?
- YOU CAN INTERVIEW STAFF OR CREATE SURVEYS
TO GATHER AS MUCH DATA AS POSSIBLE
ABOUT THE TIME STAFF SPEND DOING VARIOUS ACTIVITIES.
THESE INTERVIEWS OR SURVEYS CAN HELP YOU FIGURE OUT
HOW MUCH TIME STAFF SPEND
DOING THE DIFFERENT ACTIVITIES YOU'VE IDENTIFIED.
- IDEALLY, THIS TYPE OF INFORMATION
SHOULD BE GATHERED IN REAL TIME.
THIS MEANS HAVING STAFF REGULARLY RECORD
HOW THEY SPEND THEIR TIME DURING A SPECIFIC TIME PERIOD.
WHILE THIS METHOD MAY BE MORE OF A BURDEN FOR STAFF,
IT ALLOWS YOU TO GATHER DETAILED DATA
ABOUT HOW THEY SPEND THEIR TIME.
YOU COULD ALSO GATHER THIS INFORMATION RETROSPECTIVELY
BY ASKING STAFF HOW THEY SPEND THEIR TIME
OVER THE PAST WEEK OR MONTH.
THIS METHOD IS SLIGHTLY LESS BURDENSOME
BUT GENERALLY RESULTS IN A LESS ACCURATE TIME ESTIMATE.
- THAT MAKES SENSE.
NOW, I'VE LISTED EVERY RESOURCE MY PROGRAM USES
AND CALCULATED THE TIME SPENT ON VARIOUS PROGRAM COMPONENTS.
WHAT'S THE NEXT STEP?
- NEXT, WE NEED TO DETERMINE THE COST OF THESE INGREDIENTS
OVER A SPECIFIC PERIOD OF TIME.
FOR THIS EXAMPLE, GIVE ME ALL OF THE DIRECT COSTS
FOR PROGRAM STAFF OF IN-HOME SERVICES OVER A YEAR.
- LET'S SEE.
WE HAVE 5 CASE MANAGERS WITH A SALARY OF $45,000
PLUS FRINGE, WHICH IS $11,250 EACH;
AND A SUPERVISOR SALARY OF $60,000 PLUS FRINGE,
WHICH IS $15,000,
AND TRAVEL EXPENDITURES OF $5,000.
- PERFECT.
BEING ABLE TO ASSIGN A DOLLAR AMOUNT
IS REALLY IMPORTANT.
YOU CAN THEN TAKE IT A STEP FURTHER
BY USING THIS INFORMATION GATHERED
ON THE TIME STAFF SPEND ON CERTAIN ACTIVITIES
AND USE IT TO BREAK DOWN THE NUMBERS YOU JUST GAVE ME.
FOR EXAMPLE, IF YOU HAVE ONE CASEWORKER THAT REPORTED
THEY SPENT 10 HOURS A WEEK IN THE CAR,
5 HOURS A WEEK DOING INTAKE ASSESSMENTS,
AND 10 HOURS A WEEK WRITING NOTES
AND 15 HOURS A WEEK SEEING CLIENTS,
IT IS EASY TO FIGURE OUT HOW MUCH OF THEIR SALARY
GOES TOWARDS EACH OF THOSE ACTIVITIES.
- OK. SO IF I KNOW THE NUMBER OF HOURS EACH OF MY STAFF
SPENDS SEEING CLIENTS AND THEIR SALARIES,
I CAN ASSIGN A DOLLAR AMOUNT
FOR TIME SPENT SEEING CLIENTS FOR THE ENTIRE PROGRAM.
- EXACTLY.
NOW DON'T FORGET, WE NEED TO TAKE INTO ACCOUNT
ALL OTHER COSTS THAT MAY NOT SEEM LIKE THEY ARE RELATED
TO DIRECT PROGRAM COSTS BUT ARE STILL PART
OF THE PROGRAMMATIC COST ASSESSMENT.
DO YOU HAVE THOSE NUMBERS AVAILABLE?
- SURE.
MATERIALS AND SUPPLIES ARE $1,500.
THE DEPRECIATION COSTS OF DURABLE EQUIPMENT IS $1,250.
THE ANNUAL LEASE PAYMENT IS $3,000.
THE UTILITIES ARE $1,500,
AND PERSONNEL, WHOSE COSTS ARE NOT DIRECTLY ATTRIBUTABLE
TO THE PROGRAM, TOTAL $168,750 FOR SALARY AND FRINGE.
- NOW REMEMBER, WHEN DOING A COST ANALYSIS,
YOU NEED TO TAKE INTO ACCOUNT THE COST
OF BOTH VOLUNTEER AND PARTICIPANT TIME.
THESE FAMILIES AND INDIVIDUALS CONTRIBUTE RESOURCES--
FOR EXAMPLE, THE TIME SPENT IN PROGRAM ACTIVITIES
AND ANY OUT-OF-POCKET COSTS FOR TRANSPORTATION.
A COMPLETE ESTIMATE OF PROGRAM COSTS
WOULD ACCOUNT FOR THE VALUE OF THESE RESOURCES
SINCE THEY COULD BE USED IN OTHER WAYS.
TO ASSESS THE COST OF VOLUNTEER
AND/OR PARTICIPANT TIME AND RESOURCES,
YOU MAY NEED TO COLLECT TIME ESTIMATES DIRECTLY
FROM THE PARTICIPANTS AND VOLUNTEERS
AND THEN CALCULATE THE COST OF TIME, TRAVEL,
AND OTHER RESOURCES BASED ON COMPARABLE WAGES,
LOCAL TRAVEL/TRANSPORTATION COSTS,
AND COMPARABLE MARKET COSTS.
AND NOW, AFTER ADDING UP ALL OF THE COSTS
OF EACH INDIVIDUAL RESOURCE, WE CAN ESTIMATE TOTAL COSTS.
- I SEE.
SO WE ACCOUNT FOR EACH AND EVERY RESOURCE USED BY THE PROGRAM
AND WHEN PUT TOGETHER, THAT NUMBER REPRESENTS
THE COST OF THE PROGRAM AS A WHOLE.
- CORRECT.
FROM HERE, YOU CAN CALCULATE TOTAL PROGRAM COMPONENT COSTS,
AS WE STARTED TO MODEL A MINUTE AGO,
OR EVEN COST PER PARTICIPANT,
DEPENDING UPON HOW YOU OBTAINED YOUR COST ESTIMATES
AND WHAT YOU INCLUDE WHEN YOU ADD UP
THE NUMBERS OF EACH INDIVIDUAL RESOURCE.
- THAT MAKES SENSE.
SO MY ABILITY TO CALCULATE COSTS IN CERTAIN WAYS
DEPENDS ON THE DATA I HAVE AVAILABLE
AND THE DATA I COLLECT.
- EXACTLY.
WE'VE LEARNED A LOT ABOUT YOUR PROGRAM, MIKE,
AND FROM HERE, IF YOU CONDUCT AN OUTCOME EVALUATION,
YOU CAN TAKE THE NEXT STEP AND DETERMINE
THE COST-EFFECTIVENESS OF THESE IN-HOME SERVICES.
- THANKS FOR HELPING ME GET STARTED
ON THIS COST ANALYSIS, PHAEDRA.
THIS SHOULD BE VERY USEFUL FOR MY DECISION-MAKING PROCESS.
- ANYTIME, MIKE.
I HOPE YOU NOW HAVE A BASIC UNDERSTANDING
OF THE STEPS INVOLVED WHEN CONDUCTING A COST ANALYSIS
OF A PROGRAM IN A CHILD WELFARE SETTING.
THANKS FOR JOINING US.