Budget Manegment

7/25/2019 Budget Manegment

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P.G. COLLEGE OF NURSING,BHILAI

SEMINAR ON

BUDGET MANAGEMENT IN

PROFESSIONAL EDUCATION

GUIDE - Mrs. SUSHILA SINGH

LECTURER

P.G.COLLEGE OF

NURSING

SUBMITTED BY - Ms. S. ANITA

MSc (N)Fin! "#r


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INTRODUCTION Budget is a plan for the allocation of resources and a control for ensuring that results

comply with the plans. Results are expressed in quantitative terms. They are frequently prepared

for each organizational unit.

DEFINITION

A budget is a plan that uses numerical data to predict the activities of an organization over a

period of time.

A budget is a quantitative statement usually in montetary terms! of the plans and expectations of

a defined area over a specified period of time.

PURPOSES

" To meet organizational short and long term needs.

# $t provides a mechanism for planning and control as well as for promoting each units needs and

contributions.

% $t provide a foundation for managing and evaluating financial performance.

& To ensure that resources necessary to achieve the ob'ectives are available at appropriate time.

( To increase the awareness of costs.

TYPES OF BUDGETS

$ OPERATING OR RE%ENUE &E'PENCE BUDGETS

The operating budget provides an overview of an agency)s functions by pro'ecting the

planned operations usually for the upcoming year. Among the factors that nurse manager might

include in their operating budgets are personnel salaries! employee benefits! insurance office

supplies! rent! light! house*eeping! laundry service! educational leaves! boo*s! periodicals! dues!

membership fees+ recreation.

CAPITAL E'PENDITURE BUDGETS ,apital budgets plan for the purchase of buildings or equipments that has a long life.

The long term ma'or component include the acquisition of a positron emission tomography

imager. The short term component includes equipment purchases with in the annual budget cycle

such as call-light systems! hospital beds +medication charts.


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PERSONNEL OR LABOR BUDGETS

ersonnel budgets estimate the cost of direct labor necessary to meet the agency)s

ob'ectives. The nurse manager decides on the type of nursing care necessary to meet the nursing

needs of the estimated patient population. /ow many aides! orderlies! 012+ R1s are needed

during what shift! what months + in what areas.

* CASH BUDGETS -

,ash budgets are planned to ma*e adequate funds available as needed and to use any extra

funds profitably. 3sing a cash budget the nurse manager estimates the amount of money to be

collected from clients +other sources +allocates that cash to expenditures.

+ FLE'IBLE BUDGETS

2ome costs are fixed +do not change with the volume of business. 4ther costs vary

proportionately with changes in volume. 2ome variable expenses are unpredictable +can be

determined only after change has begun thus the need for flexible budgets.

STRATEGIC PLANNING BUDGETS

0ong range budgets for long range planning are often called the agency)s strategic plan and

are usually pro'ected for % to ( years. rogram budgets are part of the strategic plan that focuses

on all the benefits and costs associated with a particular program

ERO BASED BUDGETING

$n this the funds are allocated to departments on the basis of their previous years

expenditures. Then the department manager decide how the funds will be used. 5ach service

must be 'ustified each time funds are requested .A decision pac*age is prepared then they are

ran*ed in order of decreasing benefits to the agency. They are divided into high !medium +low

priority categories+ reviewed in order of ran* for funding.

/ SUPPLEMENTARY BUDGETS

A minimal budget is planned usually for a year time !to outline the framewor* for the

agency)s plans! establish department ob'ectives +coordinate departments. Then a monthly

supplementary budget is prepared on the basis of the volume of business forecast for that month.

0 MO%ING BUDGETS

$t is used when forecasting is difficult. $t plans for a certain length of time! such as a year. At

the end of each month another month is added to replace the one 'ust completed. Thus the

budgetary period remains constant.


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$O INCREMENTAL BUDGETING

$ncremental or the flat percentage increase method is the simplest method. By multiplying

current year expenses by a certain figure !usually the consumer price index! this method arrives

at the budget for the coming year.

BUDGETING PROCESS

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6irst step in the budget process is the establishment of operational goals and policies for the

entire agency. Top level managers frequently developed the budget for an institution. A

composite of unit needs in terms of manpower! equipment + operating expenses can then be

compiled to determine the organizational budget.

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2econd step is to develop a plan. A budgeting cycle that is set for "# months is called a fiscal

year budget. This fiscal year is then bro*en down into quarters into monthly quarterly.

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( 6inancial matters can be handled in an orderly fashion +agency activities can be coordinated

and balanced.

DISAD%ANTAGES OF BUDGETING

" 4nly those aspects that are easy to measure may be considered and equally important factors

such as organizational development+ research efforts may be ignored.

# The budget may become an end in itself instead of the means to an end.

% Budgertary goals may supersede agency goals +gain autocratic control of the organization.

& There is a danger of over budgeting the budget becomes cumbersome! meaningless+

expensive. 6orecasting is required but uncertain.

( 2*ill +experience are required for successful budgetary control.

PRINCIPLES OF BUDGET

" Budget should provide sound financial management by focusing on requirements

of the organization.

# $t should focus on ob'ectives+ policies of the organization.

% $t should provide the most effective use of scarce financial + non financial

resources.

& $t requires that a programme activities planned in advance.

( $t requires consistent delegation for which fixed duties + responsibilities are required to be

allocated to managers at different level for executing budget.

8 $t should include coordinating efforts of various departments establishing a frame of reference

for managerial decisions! + providing a criterion for evaluating managerial performance.

9 2etting budget target! requires an adequate chec*s + balance against the adoption of too high

+ too low estimate. 3tmost care is a must for fixing targets.

: Budget period must be appropriate to the nature of business or service + to the type of budget.

; Budget is prepared under the direction + supervision of the administrator.

"< Budget are also prepared + interpreted consistently throughout the organization in the

communication of planning process.

"" Budget necessitates a review of the performance of the previous year + an evaluation of its

adequacy both in quality + quality.


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"# 7hile developing a budget the provision should be made for its flexibility.

BUDGET MODEL ESTIMATES

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staff

-stationary

-news paper

-equipment

repair

-transport+

petrol

-educational

tour

-stipends for

students

- sports

material

-college

building fund

-hostel

maintainance

- fund for

professionalactivities

-wor*shops

-1ational

conference

-purchase of

boo*s+

'ournals

-internet

facility

-linens for lab

-household

supplies for

%8


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nutrition lab

-A>A

-electricity

-water

(

Budget Manegment

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