Budgets under Chief Financial Officer in the Patton-Fuller Community Hospital Virtual Organization
Resources: Budgets under Chief Financial Officer in the Patton-Fuller Community Hospital Virtual Organization and the Health Care Budget assignment from Week Five.
Part 1: 2010 Operating Budget
Review the 2009 Budget Issues – Nurses file in the Patton-Fuller Community Hospital Virtual Organization. This document can be found on the Chief Financial Officer’s web page under Special Projects.
Decide which of the two highlighted options you will implement from the Nursing Statistics memo of the 2009 Budget Issues – Nurses document.
Discuss decision-making processes in creating a budget.
Create a new 2010 Operating Budget based on the labor decision you select from the Nursing Statistics memo. Use your Week 5 Health Care Budget, see attachment, assignment as the foundation to develop your new projected budget.
Part 2: Analysis Paper
Write a 1,050- to 1,400-word paper. Your paper should:
o Discuss decision-making processes in creating a budget.
o Explain the role of variance analysis in maintaining an operating budget.
o Differentiate between managerial accounting and financial management.
o Explain generally accepted accounting principles applied to the health care industry and how they are applied to your Operating Budget Projection.
o Discuss the decision between the two labor alternatives facing the management of PFCH and the annual cost increase of each.
o Make a recommendation about which labor alternative should be chosen.
o Justify and analyze the labor decision that you recommend. Your justification should present numbers related to fiscal management including how each decision affects the 2010 Budget Projection.
o Analyze the effect of your decision on the operating budget, including:
o The opportunity cost of your recommendation
o How your recommendation affects employee satisfaction
o How your recommendation affects patient care and patient satisfaction
Sample Solution
When creating a budget, decision-making processes involve careful consideration of numerous factors. Firstly it is important to review the current budget in order to identify any issues that need addressed (Chen et al., 2018). This involves looking at both income and expenditure over past year analyze where improvements can made going forward.
Afterwards objectives must be established for upcoming cycle – this includes setting realistic goals which can achieved within given time frame whilst ensuring resources are allocated accordingly (Abele & Robichaud, 2016). Additionally, policies and procedures should be articulated clearly so all staff understand their roles responsibilities thus minimizing chance confusion or miscommunication.
Furthermore, proper planning needs conducted consider any external factors such as inflation or market changes which may affect bottom line thus necessitating additional allocate funds certain areas. Finally risk management should carried out ensure potential pitfalls unforeseen circumstances accounted for (Young & Cruz, 2015). Once all these considerations have taken into account then decisions can made regarding how best utilize available funds to achieve desired outcomes.
In conclusion, creating budget requires thoughtful process which takes into account numerous elements order maximize chances success throughout course financial cycle.
