Extension Program Cost Analysis
John G. Richardson
Program Delivery and Accountability Leader
Introduction
Cost accounting is an important function of program accountability. Cost accounting allows program administrators to make assessments for the allocation of scarce resources. Often, comparing program costs to impacts can demonstrate program efficiencies and provides a powerful resource management tool (For additional information, see Extension Education Fact Sheet SD-8, Developing Cost and Benefit Estimates).
Consistent program cost calculations can be a highly tedious task. However, for general purposes in assessing efficiencies for conducting an educational program, a less complicated model can meet this need. A good model takes into consideration labor costs and a formula to account for usual program overhead. Such overhead would include buildings, electricity, copying, paper, office supplies , equipment, and telephones, etc. An allocation is also made for clerical support based on the salary costs of the program leader. Hours will need to be calculated that are actually expended in the total program effort from needs assessment to reporting program results. In the event that special program costs are involved such as touring expenses or other extraordinary expenses, these costs will need to be added as well. While these figures may not be absolutely accurate, they do provide a good assessment of costs that can be used for decision making and program analysis. A simplified program cost analysis form that can be easily used is provided as a part of this fact sheet.
SIMPLIFIED PROGRAM COST ANALYSIS FORM
A. Total Salary____________ divided by 1,600 =________ cost per hour
(this calculation is based on an annual work time of 2,000 hours with
25% fringe benefits added)
B. Overhead, clerical support, and travel = 1 X (A.)=______ cost per
hour
C. Total hours expended for program planning, implementing, evaluating,
marketing, etc.__________________________________hours
D. Program Cost = A + B____________, and multiply by
C.________, equals:
Total Ordinary Program
Cost__________________________
Plus
E. Extraordinary Program costs (if any), (examples include: participant
travel such as on tours, temporary labor such as parking attendants,
meals, extra supplies, special printing, hired travel such as taxis or
airplane tickets, per diem, consultants, and any other items that are over
and above ordinary daily operations) _________ + _________ + _________
__________ =Total____________
TOTAL PROGRAM COST(D.____ + E.____)=__________
A Quick Cost Calculation= A. ____X 2=____X C. _____=_____*
*(plus extraordinary costs, if any)
PUBLICATION NUMBER
AEE 97-03
Peer reviewed by: Drs. Mary Marshall, Texas A&M University, Donald W. Cobb, David M. Jenkins, Richard Phillips and Joe Zublena, NC State University.
For additional information contact the Department of Agricultural and Extension Education, 120 Ricks Hall, Campus Box 7607,North Carolina State University, Raleigh, North Carolina 27695-7607
|| North Carolina State University || Cooperative Extension ||
Published by: NORTH CAROLINA COOPERATIVE EXTENSION SERVICE
Table of Contents
Created July 5, 1997
Updated July 6, 1997
created by Michael Ebbs