D.

Preparing the budget

-It is an allocation of scarce resources on the basis of forecasted needs for

proposed activities over a specified period of time.

BUDGET
-is the annual operation plan, a financial “road map” and plan which serves as
an estimate costs and a plan for utilization of manpower, material and other
resources to cover capital projects in the operating programs.

NURSING BUDGET
-is a plan for allocation of resources based on preconceived needs for a
proposed series of programs to deliver patient care during one fiscal year.

HOSPITAL BUDGET
-is a financial plan to meet future service expectation.
>Budgeting translates the community needs to manpower, equipment and so
that both services are provided at the highest level of quality at a minimum cost.

*A budget is simply a plan for future activities

-expressed in operation as well as financial or monetary terms
-In health care institutions this consists of four components:
a. Revenue budget summarizes the income which management
effects to generate during the planning period.
b. Expect budget describes the expected activity in operational and
financial terms for a given period of time.
c. Capital budget outlines the programmed acquisitions, disposals and
improvements in an institution’s physical capacity.
d. Cash budget represent the planned cash receipts and
disbursement as well as the cash balances expected during the planning
period.

Purposes of budgeting
• To ensure the most effective use of scarce
financial and non-financial resources
• To coordinate efforts among organizational
departments
• To establish a frame of reference for
managerial decisions
• To provide a criterion for valuating
managerial performance

Types of budget
• Manpower Budget
 -includes wages, salaries, and compensation to permanent and
casual employees

• Capital expenditure budget

-includes purchases of equipment and expansion of existing
buildings

• Operating budget
-includes purchase of minor equipment, repairs, supplies or
overhead expenses

The Budgeting Process

In preparing the budget, the nurse manager is expected to:

a. Review the financial performance during the prior budgeting time frame,
month, quarter or year end.
b. Formulate a new budget or financial plan for the coming period in
relation to the goals and financial projections of the organization

Phase I—Planning
• Set short- and long- term goals.
• Form a budget committee
• Prioritize objectives
• Analyze past performance
• Predict future costs and revenues
• Develop budget guidelines

Phase II—Preparation
• Translate objectives into projected costs and revenues
• Write justification for all requested expenses
• Eliminate lowest priority objectives as necessary
• Present proposed budget

Phase III—Modification and Approval

• Prepare preliminary master budget from all department requests
• Compare projected costs with estimated revenues
• Eliminate lowest priority items until budget is balanced
• Approve final master budget
• Communicate final budget to all departments

Phase IV—Monitoring
• Prepare monthly summaries of departmental expenses and revenues
• Compute actual expenses with budgeted expenses
• Investigate any variance above 5%
• Readjust budget and/or improve performance as necessary
 • Continue to monitor on monthly basis

b. Establishing Nursing Standards, Policies And Procedures

Nursing Standards
-provide professionally desirable norms against which the department
performance can be measured
-Areas for improvement are identified and a plan of action to correct this is
made and implemented.

Nursing policies
-broad guidelines for the managerial decisions that are necessary in
organizational and departmental planning
-govern the action of workers and supervisors at all levels and are intended to
achieve predetermined goals
-serve as a basis for future actions and decisions, help coordinate plans,
control performances and increase the consistency of action by increasing the
probability that different managers will make similar decisions when
independently facing similar situations

Characteristics of good policies;

a. policies should be written, must be known and understood by those
who will affect by them
b. policies should be comprehensive in scope, stable, flexible, so that
they can be applied to different conditions that are not so diverse that
they require different set of policies
c. policies should be consistent to prevent uncertainty, feelings of bias,
preferential treatment and unfairness
d. policies should be realistic and must prescribe limits
e. policies should allow for discretion and interpretation by those
responsible for it

Nursing Procedures
-specific directions for implementing written policies
>related to job situations
>related to patient care

c. Scheduling
-the function of determining how soon an operation should begin and of
establishing time sequences to meet due dates

DECISION MAKING PROCESS

DECISION
-is a course of action that is consciously chosen from available alternatives for
the purpose of achieving a desired result
 -involves a choice utilizing mental processes at the conscious level and is aimed
at facilitating a defined objective.

Decision making
-is the process of selecting one