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Lecture 5 FISCAL PLANNING BUDGETS

The document discusses fiscal planning and budgets in healthcare. It defines a budget as a numerical plan to predict organizational activities over time. Nursing budgets now account for over 50% of healthcare institution expenses. Nurse managers must become proficient in budgeting to ensure adequate resources are available. The budget process involves determining requirements, developing a plan, analyzing operations, and periodically reviewing the plan. Budgets include personnel, operating expenses, and capital expenses. Statistical data and managerial support are prerequisites for effective budgeting.

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94 views13 pages

Lecture 5 FISCAL PLANNING BUDGETS

The document discusses fiscal planning and budgets in healthcare. It defines a budget as a numerical plan to predict organizational activities over time. Nursing budgets now account for over 50% of healthcare institution expenses. Nurse managers must become proficient in budgeting to ensure adequate resources are available. The budget process involves determining requirements, developing a plan, analyzing operations, and periodically reviewing the plan. Budgets include personnel, operating expenses, and capital expenses. Statistical data and managerial support are prerequisites for effective budgeting.

Uploaded by

bhavisha
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Unit 4

FISCAL
PLANNING "
" BUDGETS
FISCAL PLANNING " BUDGETS
"
A budget: “plan that uses numerical data,
to predict the activities of an organization
over a period of time”
fiscal planning is the most difficult part.
learned skill, requires vision, creativity,
political, social, and economic forces that
shape health care.
written statement contains “resources,
money, time, and people”.
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Role of the nurse manager in fiscal planning

Historically, nursing management play a


limited role in fiscal planning .
Nursing input was shorthand and
classified as a “non-income producing”
service.
Currently, nursing budgets more than50%
of the total expenses in health care
institutions,
For nursing; fiscal planning is
fundamental and powerful tool.
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Role of the nurse manager in fiscal planning

To see that adequate resources are available to


provide nursing services.
Unit manager who can best monitor and
evaluate all aspect of a unit’s budget control.
Nursing managers at all levels must become
proficient in the budgeting process,
Good nurse manager who is in the best position
to predict trends in census and acuity, supplies
and equipment needs

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A budget helps management plan and
control the distribution of resources
within the organization.
Note that the "when" is just as important as
the (how much). The money has to be
available at the right time.
Used as controlling and evaluating the
organization’s performance over the past
year.
In budget: expenses classified (fixed, or
variable, controllable or non-controllable.

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Steps In The Budgetary Process

 1) Determine the requirements of the budgets :


-personnel, equipment, and operating expenses are needed
to determine the organizational budget.

 2) Develop a plan:
- Reviewing the established goals and objectives of the
nursing unit, department, and the organization.
- A fiscal year budget is a budget cycle for 12 months.
 May be subdivided into monthly, quarterly, or
semiannual periods.

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 3) Analyze and control the operation:
- To avoid inadequate or excess funds at the end of the
fiscal year.
- Each unit manager is accountable for budget.
- Large deviations must be examined.
- Variance: the difference between budget and actual
performance
- Example: Anything under 4% or 500$ is acceptable thus
only variances over that percentage would be examined.
• 4) Review the plan:
- The budget is reviewed periodically and modified as
needed throughout the fiscal year.

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:Types Of Budgets
1) The personnel Budget:
• The largest of budget expenditures is the workforce
“health care is labor intensive”.
• Includes : salaries , compensation for vacation time,
sick leave, holidays, overtime, …etc.
• Personnel budget monitored closely to prevent under-
or overstaffing , (be alert for numbers and types of
clients) .
• Manager must be aware: the most economical level of
nursing care- that will cover pt needs can provided.
• The number of client's visits, or cases per day never
remain constants, so manager must be ready to alter
staffing .

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2) The operating budget or revenue-and-expense
budgets.
Includes: daily expenses as the cost of
electricity, repairs and maintenance, and
medical, surgical supplies, office supplies,
laundry … etc
The 2nd most significant component in the
hospital budget.
Formulation of the operating budget should
begin several months before the beginning of
the next fiscal year to provide sufficient data and
time for planning .
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3) Capital Budget:
Budget plan for buildings and or major
equipments that has a long life (usually greater
than five years).
Cost effectiveness is The desired result of
careful fiscal planning (unit manager’s goal)
Cost effective does not mean cheap It means
using the money for getting the most products.
Takes into account factors regard Cost
effectiveness:
1- Anticipated length of service .
2- Need for such a service .
3- Availability of other alternatives.
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Prerequisites To Budgeting:
1-There is need for sound or organization
structure with clear lines of authority and
responsibility.
- Employees know their responsibilities and
accountabilities about their actions.
- Organization charts, job descriptions, Goals and
objectives are available .
- Then budgets developed to conform to the
pattern of authority and responsibility
2- Statistical data: e.g..: No. of admissions,
average length of stay, percentage of
occupancy… etc. Are used for planning and
control of the budgetary process.
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3- Revenues and expenses are reported
for planning and evaluation.
4- Managerial support: essential for a
budgetary program, done at the
departments level and valued by top
administration.
5- Formal budgeting policies and
procedures are available in a budget
manual.
- Objectives, Instructions, Procedures for
reviews of the budgetary program are
defined & discussed in detail.

12
Bye . Bye

13

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