Hum/ 260 Dq 1 and 2

The statement of activities is basically an accounting of all agency revenues and expenses for the fiscal year. In standard business (and in some sense, to non-profit agencies as well), this statement is called a profit and loss statement. It shows how much profit is left over after all expenses have been taken out. While non-profits do not make a profit in the traditional sense, they can take a portion of revenues and expand the program or purchase new equipment for use within the program. The statement of functional expenses does not represent revenues; only the total expenses incurred (or to be expended) during the fiscal year. They are common broken down in to various categories; program, management and general, fund-raising, and other normal expenditures (such as salaries, benefits, and others standard operating costs).

Revenue centers are part of an organization (usually a department) which is responsible for the revenue (incoming cash) for its own department's use. While there may be some monies that cross lines with other functional departments, a percentage is earmarked as earned by a given department. This type of center allows supervisors to actively seek out funds to support their department via grants and other fund-raising operations.An expense center is similar to a revenue center, but departments are responsible for the expenses used to run their department. This allows supervisors and managers to control what expenses are paid out directly for the portion of the program they are in charge of. They can limit expenses for certain areas, while increasing expenses needed to pay for unexpected costs.

It is important to know this information as employees of human services organizations because by understanding how much revenue is brought into an agency and how much is expended, an evaluation can be made of how well or how