2004 GRP budget process

Modified 11 January 2004 by the GRP state committee

In preparing a budget for 2004 and beyond, the GRP state, administrative, and working committees shall use the following guidelines for proposing and reporting of the GRP budget:

Budget Tiers

The GRP shall create prioritized tiers for the budget items. Tier 1 shall be the highest priority, tier 2 for lesser priorities, and so on.

Each tier shall have a monthly spending rate established and each item within the tier shall receive a fixed percentage of the tier, which will establish that item's monthly spending rate. The items in a tier shall add up to 100%. If an item is added to or removed from a tier, the other items' percentages shall be adjusted so that the tier still adds up to 100%.

As money comes into the GRP, it shall be split among the items within the highest unfunded tier according to percentages established for each item.

Tier 1

Tier 1 money can be spent as soon as it comes in.

Tier 1 items shall be reserved for items that the GRP state committee deems absolutely necessary, such as the costs of meeting our legal or bylaws requirements. Tier 1 can also include discretionary funds such as a rainy day fund (preparing for the unexpected), a project that the state committee considers important enough so that it should spend as it goes (instead of following the rules below), and projects that are expected to raise more funds than they spend, such as a fundraising event or commissions for fundraisers.

Other Tiers

A regular line item shall be considered fully funded when it has more than six months operating expenses allocated into it from incoming donations.

A yearly line item shall not be considered fully funded until it has a full year's worth of operating expenses allocated into it from incoming donations.

Once a line item is fully funded (either type), all additional funds that are allocated to that tier shall go to other line items in that tier.

A fully funded regular line item can revert to being only operationally funded, or even underfunded, as money is spent from that line item. If this occurs, money allocated to that tier will flow back into that line item, until the line item is either fully funded again or has been allocated its entire budgeted amount for the year.

Once a line item has been allocated its yearly budgeted amount, it's funding status is marked DONE and no more funds can be allocated to this line item, unless the state committee increases the line items budget or funds are diverted from a discretionary line item (such as the adcom discretionary fund). A yearly line item which is fully funded is, by definition, also marked DONE.

A tier shall be considered fully funded when all of its line items are fully funded. At this point, all additional donations shall go to funding lower tiers.

A line item shall be considered operationally funded when it has more than three months operating expenses allocated into it from incoming donations.

A tier shall be considered operationally funded when all of its items are operationally funded (or fully funded). At this point, half of all additional donations allocated to a tier (from a higher tier) shall go to funding lower tiers. The other half shall continue to flow into line items in that tier (until the tier is fully funded).

Since fully funded line items do not recieve additional funding, other items in the same tier have their percentage allocation increased by dividing by the remainder of the removed percentage. For example, suppose a tier has 3 items:
Item A [20%] Item B [30%] Item C [50%]
If Item C [50%] is fully funded, Item A now gets 40% [0.2/(1.0-0.5)] and Item B now gets 60% [(0.3/(1.0-.05)] of new money for the tier. Instead, if Item B [30%] is the fully funded item, the Item A now gets 29% [0.2/(1.0-0.3)] and Item C now gets 71% [0.5/(1.0-0.3)].

For all tiers, except tier 1, only operational or fully funded items can be spent. In other words, after an item has three months operating expenses built up, all the additional funds going into that item can be spent.

Unspent Allocated Funds and Budgetary Continuity

Money which has been allocated into a line item, but is unspent at the end of a fiscal year, will be reatained by that line item at the start of the following fiscal year

If the line item is funded at the same or a greater level in the new bugdet, that money will continue to be retained as allocated into that line item

If the line item is funded at a lower level (or completely cut) in the new budget, amounts over full funding will be returned into the GRP general fund (see below) and reallocated to other budget items.

State Fund and Federal Fund

For the purposes of preparing a budget, percentages of a line item that are estimated and expected to come from the state and federal funds shall be indicated, where possible. However, these are just estimates for the purpose of providing the party with fundraising goals for each fund relative to each other.

Actual donations flowing into both funds, shall be thought of as comprising an (imaginary) general fund. This general fund (although it does not really exist as a distinct fund), shall be the basis for allocating funds into each line item and tier of the budget.

Actual spending (from allocated operational line items) shall occur at the discretion of the treasurer from the state and federal funds of the party in accordance with state and federal law, regardless of which fund was indicated in the budget for the line item.

The finance and fundraising committee shall work with the state and administrative committees to ensure that sufficient funds are raised into each fund (state and federal) so that allocated funds can actually be spent. However, even if an amount is allocated as operational, if insufficient amounts exist in the correct party fund to legally fund that activity, the treasurer is obliged and authorized to prevent that spending from occurring, until such time as the situation is corrected by additional fundraising.

Reporting

The treasurer should report the results monthly. The results shall include:

a) how much total money was raised that month

b) how much total money was spent that month

c) the bank account balances on the last day of the month

d) tier 1 items will have TIER1 (or DONE) in the funding status column,
     the balance on the last day of the month in the balance column and the
     amount spent on the item that month in the spent column

e) fully funded items will have FULL (or DONE) in the funding status
     column, the balance on the last day of the month in the balance column
     and the amount spent on that item that month in the spent column

f) operational items will have OPER (or DONE) in the funding status
     column, the balance on the last day of the month in the balance column,
     and the amount spent on that item in the spent column. Operational items
     will have an additional column showing the available balance (i.e.,
     the amount over 3 months funding) at the end of the month

g) non-operational items will have the percentage of operational on the
     last day of the month in the funding status column, the balance on the
     last day of the month in the balance column, and "---" in the amount
     spent column