The Reluctant Finance Officer (cont'd)

Before Terry could think up a good answer, she continued. “Why don’t you do this with an attempt at keeping revenues about ten to twelve percent ahead of expenses, so we’ll have some cushion in the budget. We’re supposed to grab another 20 points of market share in this human services market, so I anticipate that, just in general terms, we’ll be moving from a $1 million budget that we had last year up to about a $10 million budget ten years from now. Is that about right by your calculations?”

“Yeah, probably it could be. I must confess I haven’t really plumbed the depths of the strategic plan since it’s been finally approved by the Board, but given the direction it was going in draft form, that’s probably about as good an estimate as any at this point. But I don’t know about projecting out ten years’ worth of budgets. That’s a pretty impossible task.”

“Well, I certainly understand the complexities here, Terry, and, sure, it would be difficult to know where every penny is coming from, but my question to you is… can you do it? Will you do it? I need to have this to see how the road looks ahead.”

“But what about the state’s problems? We never know what we’re going to get from them until their check is in the bank and doesn’t bounce. And then there’s the grant situation – always a new possibility, but not always new money. How do we know how much to project? That’s an impossible situation in which to make any reasonable kind of projection, you know that.”

“Yes, I do, but we’ve got to try. Let me ask you a question, then. How do you expect Marvelous Works to arrive at the strategic targets the Board has set in ten years, if you don’t project budgets out that far? Do you have another solution to that little problem?”

“Well,” said Terry, getting a little irritated at this point. Maybe the rain and leaves had been wrong about this being a good day. “They didn’t ask me about it when the projected that advanced share of market they want, and they didn’t ask for any projected budgets. Apparently they know what’s going to happen. Why don’t you ask them?”

“Oh, come on now,” said Mary. She, too, was seeing a block that would need to be removed before they could move ahead. “You had plenty of room and many opportunities to give input to the Board. But every meeting you sat there with that little smirk on your face and said nothing. Probably nobody asked you because they’re a little afraid of you, Terry, and because you’re more knowledgeable than they are about financial matters. At least the committee members feel that way. And I think the Board members just assumed all those kinds of questions had been asked before they got to the first draft of the plan. So if you had something to offer, I have two questions: why didn’t you offer it, and what was it you had to offer?”

“Well, I think it’s crazy in this human services circus we run around here to project anything further than the next month in advance. I’ve seen money come and go around here for longer than you’ve been on board and you know just as well as I do that what’s promised today, what really is sure and virtually ‘in the bank’ turns out tomorrow to be nothing. What I had to say runs counter to the whole strategic planning exercise.”

“Is that how you see it, then, Terry, as an ‘exercise?’ I would have thought that an old corporate finance officer like yourself would have been long used to projecting budgets. What’s the problem here?”

We'll see the answer to this question tomorrow.