As an archive service you may be part of a local authority or of a university

You could also be set up as a charity or a social enterprise spin off

How you are set up will of course affect not only how your accounts look

But how much involvement and control you have in how the budgets are designed, allocated and controlled

Even if you find that you don't have much of a say, understanding how your organisation's accounts work

Will go a long way towards helping you manage or design project budgets

Also, if you understand how the budgets work then you are in a better place to talk about them

And if you can talk about them, then you can engage with key stakeholders on a financial level

Engagement with both internal and external stakeholders is key to successful project development

This is an example budget supplied by a local authority archive

At first instance, the staffing figures seem quite high, however staffing costs are typically two thirds of an archive budget

In this budget that is pretty much what they are, so don't worry if the figures sometimes look a little scary

Whilst these are just budget headings and not full breakdowns, this budget does give

A clear indication of where the expenditure is, this is key when defining your own budget

You might think that the income levels are relatively high for an archive, and you would be right

This service however provides external lettings of the archive space

The main budgets you can affect are staffing and income, but even doubling this income

Makes a relatively small impact on the net budget

This is important to recognise when thinking about sustainability

Income generation for some archives is the way forward

But this cannot be championed in isolation. Without understanding how the rest of the budget works

Alot of time can be spent on intiatives that just don't have a big enough overall impact

Let's have a closer look at recharges as these seem to be taking up quite a lot of the overall budget

Recharges, otherwise known as overheads and sometimes just as core costs

This all depends on whether you are a local authority, a university or a charity

There are different guidelines for each type of organisation when it comes to producing accounts and budgets

But we don't need to be confused, in this instance they all mean the same thing

The recharges in this example then are the premises recharge

This is the cost of the portion of the building that is used by the archive service

It is basically the rent owed to the parent organisation, the actual cost of housing the service

The payment so to speak is generally adjusted on paper, rather than sending it over and sending it back again

Although this is not always the case

The support services recharge is most likely in this case to be a charge for things such as

HR services, fundraising, marketing or development team costs

Basically any of the support services that the parent body provides which are apportioned across the various departments

Depreciation is a calculation that allows an organisation to account for the decline in value of equipment

This could be IT, vehicles and in some circumstances can also be applied to property through wear and tear usage

Most organisations have a policy setting out the annual depreciation rates. This allows an organisation to assess their assets realistically

And plan for and cost upgrades as necessary

These three components then are what contribute to the total cost of the service

Often, parent organisations have covered these costs in the past, especially if a building has been owned outright

Or if the HR support to a service has been minimal because of small staff numbers for example

However, in changing times with changing funding structures and more business-like approaches to service delivery

These costs, which may have been hidden are rising to the surface and need to be taken into account

This is referred to as above and below the line costs. So what is the total cost of this service?

From these accounts it is pretty straight forward, it is A plus B, £599,373

The total being the net revenue budget. Quite simply, this means all these costs have to be considered

When considering the cost of supplying the service, not just the salaries of the staff or the materials

One important rule to take forward in this instance is above and below the line

Above the line costs. All those above the income line are costs that you can technically control

When we say control, we don't mean necessarily that you can pick and choose what you want and don't want

But these costs can change and fluctuate depending on decisions and circumstance

These are the costs most directly related to the delivery of your service or project

Below the line costs. The premise recharges, support service recharge and depreciation are costs that you cannot control

In as much as those costs will always be there regardless of the projects and services that you are delivering

Whilst you can't control the amounts or the policy, you can exercise control by understanding better what the recharges entails

As mentioned, this budget just provides the budget headings. But what is included in those recharges?

Can you find out? Where from? Understanding what that breakdown includes will again put you in a better place to engage

With those that do control the policies and procedures around recharges. It will also help you

Understand what needs to be included when you are thinking about core cost recovery.