Based upon a case developed by D. T. Carter
and Nabil Elias
Written by D.T.Carter and M. MacInnis
United Charities (UC) supports various participating agencies each year. The organization conducts an annual appeal for funds and allocates the funds to the participating agencies after approving the budgets of each agency. One condition of the grant is that any surpluses at the end of a fiscal year must be returned to UC. Community Counselling Services (CCS), a medium-sized not-for-profit organization, is one of the beneficiaries of UCs efforts. CCS provides outpatient family and child counselling to clients. The 1997 CCS budget was set at $1,500,000, 80% of which was provided by UC. The remaining 20% was made up of user fees and small user donations. Upon review of the CCS 1997 application for funding, UC approved $1,200,000 for CCS use. Among the budget items proposed by CCS, but not approved by UC due to uncertain economic conditions, was $30,000 for the employ of an additional case worker who would specialize in counselling relatives of Alzheimers Disease patients.
In December 1997, CCS Director of Finance, William Hull, C.A., notified the Executive Director, Donald Ives, that there was a projected surplus of $30,000 for 1997, due to unexpected donor contributions and employee changes. With this information, Ives proceeded to hire the additional case worker for Alzheimer Family counselling that UC did not authorize. Hull reminded Ives of UCs policy regarding surpluses. Ives reasoned that the needs are more important than the rules and, in any event, the cost of adding the case worker easily fell into the 20% of the budget that was not granted by the UC.
What should Hull do?
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