00:06.9 - 00:12.4 As an archive service you may be part of a local authority or of a university 00:12.5 - 00:15.3 You could also be set up as a charity or a social enterprise spin off 00:15.4 - 00:20.2 How you are set up will of course affect not only how your accounts look 00:20.3 - 00:25.1 But how much involvement and control you have in how the budgets are designed, allocated and controlled 00:25.2 - 00:32.1 Even if you find that you don't have much of a say, understanding how your organisation's accounts work 00:32.2 - 00:36.1 Will go a long way towards helping you manage or design project budgets 00:36.2 - 00:43.0 Also, if you understand how the budgets work then you are in a better place to talk about them 00:43.1 - 00:47.9 And if you can talk about them, then you can engage with key stakeholders on a financial level 00:48.0 - 00:53.9 Engagement with both internal and external stakeholders is key to successful project development 00:55.5 - 01:00.4 This is an example budget supplied by a local authority archive 01:00.5 - 01:08.5 At first instance, the staffing figures seem quite high, however staffing costs are typically two thirds of an archive budget 01:08.6 - 01:13.8 In this budget that is pretty much what they are, so don't worry if the figures sometimes look a little scary 01:15.6 - 01:19.8 Whilst these are just budget headings and not full breakdowns, this budget does give 01:20.2 - 01:25.0 A clear indication of where the expenditure is, this is key when defining your own budget 01:25.1 - 01:31.6 You might think that the income levels are relatively high for an archive, and you would be right 01:31.7 - 01:36.5 This service however provides external lettings of the archive space 01:37.8 - 01:42.1 The main budgets you can affect are staffing and income, but even doubling this income 01:42.2 - 01:45.9 Makes a relatively small impact on the net budget 01:46.7 - 01:50.8 This is important to recognise when thinking about sustainability 01:50.9 - 01:54.9 Income generation for some archives is the way forward 01:55.1 - 02:00.6 But this cannot be championed in isolation. Without understanding how the rest of the budget works 02:00.7 - 02:05.5 Alot of time can be spent on intiatives that just don't have a big enough overall impact 02:05.6 - 02:12.3 Let's have a closer look at recharges as these seem to be taking up quite a lot of the overall budget 02:12.4 - 02:19.8 Recharges, otherwise known as overheads and sometimes just as core costs 02:19.9 - 02:24.7 This all depends on whether you are a local authority, a university or a charity 02:24.8 - 02:29.6 There are different guidelines for each type of organisation when it comes to producing accounts and budgets 02:29.7 - 02:34.5 But we don't need to be confused, in this instance they all mean the same thing 02:34.6 - 02:39.2 The recharges in this example then are the premises recharge 02:39.3 - 02:44.3 This is the cost of the portion of the building that is used by the archive service 02:44.4 - 02:49.7 It is basically the rent owed to the parent organisation, the actual cost of housing the service 02:49.8 - 02:56.8 The payment so to speak is generally adjusted on paper, rather than sending it over and sending it back again 02:56.9 - 03:00.6 Although this is not always the case 03:00.7 - 03:05.5 The support services recharge is most likely in this case to be a charge for things such as 03:05.6 - 03:10.4 HR services, fundraising, marketing or development team costs 03:10.5 - 03:18.5 Basically any of the support services that the parent body provides which are apportioned across the various departments 03:18.6 - 03:25.0 Depreciation is a calculation that allows an organisation to account for the decline in value of equipment 03:25.1 - 03:33.1 This could be IT, vehicles and in some circumstances can also be applied to property through wear and tear usage 03:33.2 - 03:41.8 Most organisations have a policy setting out the annual depreciation rates. This allows an organisation to assess their assets realistically 03:41.9 - 03:46.7 And plan for and cost upgrades as necessary 03:47.2 - 03:51.6 These three components then are what contribute to the total cost of the service 03:51.7 - 03:58.4 Often, parent organisations have covered these costs in the past, especially if a building has been owned outright 03:59.2 - 04:04.2 Or if the HR support to a service has been minimal because of small staff numbers for example 04:04.3 - 04:10.9 However, in changing times with changing funding structures and more business-like approaches to service delivery 04:11.0 - 04:19.5 These costs, which may have been hidden are rising to the surface and need to be taken into account 04:20.3 - 04:27.1 This is referred to as above and below the line costs. So what is the total cost of this service? 04:27.8 - 04:35.2 From these accounts it is pretty straight forward, it is A plus B, £599,373 04:35.3 - 04:42.4 The total being the net revenue budget. Quite simply, this means all these costs have to be considered 04:42.5 - 04:48.7 When considering the cost of supplying the service, not just the salaries of the staff or the materials 04:48.8 - 04:53.0 One important rule to take forward in this instance is above and below the line 04:53.1 - 05:00.0 Above the line costs. All those above the income line are costs that you can technically control 05:00.1 - 05:05.4 When we say control, we don't mean necessarily that you can pick and choose what you want and don't want 05:05.5 - 05:11.7 But these costs can change and fluctuate depending on decisions and circumstance 05:11.8 - 05:17.2 These are the costs most directly related to the delivery of your service or project 05:17.8 - 05:25.2 Below the line costs. The premise recharges, support service recharge and depreciation are costs that you cannot control 05:25.3 - 05:31.0 In as much as those costs will always be there regardless of the projects and services that you are delivering 05:32.0 - 05:40.2 Whilst you can't control the amounts or the policy, you can exercise control by understanding better what the recharges entails 05:40.3 - 05:46.1 As mentioned, this budget just provides the budget headings. But what is included in those recharges? 05:46.2 - 05:55.3 Can you find out? Where from? Understanding what that breakdown includes will again put you in a better place to engage 05:55.4 - 06:00.8 With those that do control the policies and procedures around recharges. It will also help you 06:00.9 - 06:05.7 Understand what needs to be included when you are thinking about core cost recovery.