San Jose College

1069, Malulut St. Brgy. Rizal, Makati, Philippines

(69)-1013-0320 @www.sanjosecollege.com

Date: November 10, 2022

To: John B. Feli

President

From: Andre Luigi Manalo

Management Committee

Subject: A proposal to amend the budget allocation ratio of the school and increase the
salary of teachers by 10 percent.

THE PROBLEM

I am writing this letter to propose a solution to the problem of our school San Jose College. The
problem is that the school is on the brink of bankruptcy because of the school’s rehabilitation.
The teachers and students with their parents are having a conflict.

The teachers demand at least 12% increase in their salaries and threatens the management
that they will resign if their demands are not met. The school agreed to the teachers by
increasing the student’s tuition fee but the parents of the students complained that this
increase is not reasonable and threatened the school that they will pull their children out of the
school. The parents and teachers still can’t meet halfway and it’s affecting the students and the
school.

I hereby propose a solution to make an amendment to the current budget allocation ratio of
the school in which the bankruptcy will somehow be resolve by giving the school at least
enough profit. The solution also proposed a 10% raised salary to teachers and the decision for
the tuition increased will be called off.

PROPOSED SOLUTION

The proposal aims to achieve the desired ratio given in the manual for private school which is
70:20:10, 70% for the salary of the teachers, 20% for operating expenses (15% for the non-
teaching personnel's salary and 5% for bills, etc.), and 10% for profit of the school. The proposal
will also give the teachers a 10% salary increase.
In order to achieve the desired ratio given by the manual for private schools, we must reduce
the teaching staff in tertiary level from 15 personnel down to 10. In the current budget
allocation ratio of the school which is 75:25, 75% is for the whole salary of the 25 teachers. By
diving 75 to 25, we can get the average percentage of each teacher which is 3% (figure a). Now
because we are removing 5 teaching personnel in tertiary level, we must multiply the 5 by 3 to
get the total percentage of those 5 teaching personnel which the answer will be 15% (figure b).

Now removing that 15% to the 75%, it will become 60% which now the total salary percentage
of 20 teachers (figure C). Since we removed 15% to the total salary percentage budget of the
teachers, we now have 15% unallocated budget in which the 10% will be allocated as the salary
increase for the remaining 20 teaching personnel. Making the total salary percentage budget
for the teachers to 70% which is what the manual required. That leaves us to 5% unallocated
budget which now can be our profit.

To achieve the 10% profit set by the manual. We can further cut roughly 5 percent from 25
percent bills and equipment expenditures, which now gives us 20% for operating expenses and
10% profit. That makes the budget allocation for the school in the ratio of 70:20:10 which the
manual required for all private schools.

JUSTIFICATION

Based on the simple equation that was provided we can definitely make the ratio of allocated
budget to the required ratio given by the manual. Since the current ratio doesn’t bring any
profit to the school putting the school in the brink of bankruptcy. The ratio given by the manual
gave us at least 10% profit which is better than nothing like the school is experiencing right
now.
The removal of 5 teachers in tertiary level can be reasonable. Since there are 10 teachers
currently teaching 100 students in elementary and high school level and 15 teacher currently
teaching 100 students in tertiary level. If the 10 elementary and high school teachers can
handle 100 students, those 10 teachers remaining in tertiary level can surely also handle 100
students.

Although we can push the 12% salary increase which was demanded by the teachers by selling
those obsolete computers, giving us roughly additional 2% to our budget. Nonetheless that 2
percent profit is only a short term profit, not a long term continuously profit, which will only
still give us 10% allocation for the salary increase of the teachers.

CONCLUSION

Overall the solution will surely benefit the school. Although it may bring minimal sacrifices but
the benefit that it can get can make the school running and can still provide education for the
students in the next 5 years. Thus, this solution is still a proposal. Discussion with the teachers
must still take place to further more discuss why the school can only give them 10% salary
increase. Regarding to the parents, we can assure them that the call for the increase of tuition
will surely be drop and their children can still continue and enjoy the quality education that the
school offers.