UNIVERSITY OF THE PHILIPPINES MANILA The Health Sciences Center COLLEGE OF NURSING Sotejo Hall, Pedro Gil St.

, Ermita, Manila

BUDGET PREPARATION
Michelle S. Marginal, R.N.

Objectives:
At the end of the report, the graduate students will be able to: Discuss the prerequisites in preparing a budget. Identify the participants in the budgeting process and e plain their duties and responsibilities.

Basic Prerequisites in Budget Preparation:

A well! for"ulated budget organi#ation with assign"ent of responsibility should e ist. $he final budget %total & depart"ental'should be prepared under the direction of one e ecuti(e head. A budget co""ittee should be for"ed. )oordinating co""ittee with representati(e depart"ental heads

 *roper planning is the +ey to de(eloping an effecti(e budget. ,ong range planning is necessary to establish goals specific to a particular hospital. -oals "ay conflict and thus can be achie(ed only through an effecti(e budget that balances ser(ice and costs.

Goals and objectives must be: Understandable Measurable Achievable Coordinated throughout the hospital *reparation of the budget begins se(eral "onths before the end of each fiscal year to allow ti"e for careful preparation. .udgets are generally de(eloped for a /0! "onth period. $he yearly cycle can be based on a fiscal year as deter"ined by the organi#ation or a calendar year.

 $he reliability of the budget decreases as the length of the budget period increases. *otential negati(e i"pacts of the budget should be recogni#ed. *articipation of the super(isors should be solicited by depart"ent "anagers to increase the acceptance and effecti(eness of the budget.

 $o prepare a budget, organi#ations gather funda"ental infor"ation about a (ariety of ele"ents that influence the organi#ation: de"ographic and "ar+eting infor"ation co"petiti(e analysis regulatory influences strategic plans

De ograp!ic and In"or ation #ar$eting

Identifies unique "ar+et characteristics such as age, race, se , inco"e, etc that influence patient beha(ior. I"portant to understand de"ographics because it relates to deter"ining what type of patients are consu"ers that institutions target.

%o petitive Ana&'sis
I"portant because it probes into how the co"petition is perfor"ing as co"pared to other health care organi#ations. 1 a"ines other hospitals or practices2 strengths and wea+ness, location and e isting technology.

Regu&ator' In"&uences
Regulatory require"ents and rei"burse"ent rates ha(e an effect on financial perfor"ance. Regulatory changes are influenced by se(eral go(erning bodies. 3ther regulatory bodies play a role in rei"burse"ent by ensuring that federal and state laws are adhered to through appro(al and accreditation.

(trategic P&ans
-enerally, hospitals ha(e strategic plans that "ap out the direction for the organi#ation o(er se(eral years. -uide the staff at all le(els so that the entire organi#ation can ha(e a shared "ission and (ision with clearly defined steps to "eet the goals.

)!o participates in t!e preparation o" budget*

$he go(erning body Ad"inistrator .udget director or co""ittee Depart"ent "anagers

Participants
Governing Bod' has the pri"ary responsibility for establishing goals and ob4ecti(es, deter"ining budgetary ob4ecti(es and gi(ing final appro(al for the final budget

Participants
Ad inistrator has an o(erall responsibility for the for"ulation and e ecution of the budget: *reparation of budget Appro(al of budget organi#ation chart 3utlining of responsibilities Ascertains that all tas+s are assigned

Participants
Budget director and+or co ittee

responsible for preparing for"s, obtaining statistics, coordinating the (arious pro4ections, and re(iewing the depart"ental budgets.

Preparation
Depart ent anagers responsible for preparing and re(iewing goals and ob4ecti(es, re(enue and e pense budgets, and capital e penditure requests for their depart"ents. prepare the budget for their units on the basis of past e penditures and predictions for the co"ing year, wich are pro(ided by the chief fiscal officer within the fra"ewor+ for"ulated by top! le(el "anage"ent.

Depart ent

angers,,,

"ust be included in the preparation of the budget for their depart"ents to consider it (alid and utili#e it in the perfor"ance of their responsibilities.

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