The President/CEO and CFO of Marian Services for the Aged bring to the Board at the April board meeting a budget proposal that includes a substantial deficit. In his presentation to the Board, the CEO indicates that the projected deficit is due to two factors.
First, a substantial wage increase is projected for CNAs. The administration feels that as a Catholic sponsored facility committed to social justice, Marian should try to move toward paying a “living wage” to CNAs. Further, from a purely pragmatic point of view, a wage increase is needed to retain the CNAs they have and to attract people to fill several vacant positions.
Second, Marian presently has a nursing home and independent and assisted living units, but would like to add an adult day care center. Such services, the CEO explains, would greatly assist older persons living with adult children who must often go to work during the day. An adult day care center would permit many of them to remain longer in a home setting instead of having to opt for assisted living or a nursing home. And the results of a recent survey indicate a need for more adult day care services in the area. This might also be a good way to interest potential clients in Marian. The CEO admits, however, that it is likely to take several years before Marian begins to break even on an adult day care operation. Nonetheless, he wants to go ahead with the project because of Marian’s mission to serve the aging and the community’s need for adult day care services.
In general, board members are supportive of the idea of increasing wages for CNAs and the concept of an adult day care center. However, the majority of board members also express concern over the amount of the projected budget deficit. In the past few years, Marian has been running a deficit but this was covered by the annual community fund drive and interest from their endowment. However, because of general economic conditions, interest rates and contributions to non-profit organizations are down. Board members insist that caution is in order in formulating the budget.
One board member suggests trying to trim the projected expenditures for buildings and grounds. Another board member, comments that these sorts of cuts are not sufficient to solve the problem. He suggests downsizing administrative staff where there seems to be some duplication, including several people in management and four people in development, and sharing secretaries for the remaining administrative positions.
(This case has been adapted with permission from Janine Idziak, PhD, Organizational Ethics in Senior Health Care Services, Dubuque: Simon & Kolz Publishing, 2003, pp. 163-164).