Solution
David answered on
Dec 26 2021
Final Project
Using the everything you have learned in this course and the budget forms below create a
udget for a fictitious department at Cure-All Medical Center.
TO: Department Directors
FROM: John Doe
Chief Financial Officer
DATE: __01-08-2017___
RE: Budget Preparation
As we begin thinking of the _2017-18_ (insert year) budget, the overall attitude must
once again be of extraordinary cost awareness.
The local economy of __New York_ (insert name of a city) and the su
ounding area is
improving slightly. Year-round tourism is expanding in ___New York___(insert name of
city). We also expect continued emphasis on out-of-hospital activity to result in fewer
inpatient admissions.
The pressures to contain the rise in healthcare expenditures will continue. Our contracts
with third-party payers fix payments at levels that continue to cause cost-containment
challenges. Department managers will have to be conservative in developing their
udgets, both operating and capital, recognizing that the hospital’s financial situation is
tight and the level of care to be provided must remain high.
As the budget is prepared and implemented, making this hospital a financially strong
organization should continue to be a goal of each and every employee.
TO: All Department Heads
FROM: Jane Doe, CMA
DATE: ____01-08-2017____
RE: Budgeting Process and Important Budget Information
The forms for presentation of your fiscal year _2017-18_ departmental budget requests
are attached. You are being asked to budget for all general operating expenses, capital
expenditures, and personnel expenses anticipated for the fiscal period of October 1
through September 30.
Revenue Budget. The purpose of the revenue budget is to forecast revenue from non-
patient activity. The budget should reflect any price or fee changes and volume change
expected.
Operating Budget. The purpose of the operating budget is to forecast all expenditures for
office operations exclusive of personnel and major equipment needs. Much of this
udget will be based on last year's historical costs but should be adjusted to reflect
anticipated changes.
Capital Budget. The purpose of the capital budget is to forecast all expenditures for
major equipment. For our budget purpose, a "capital item" is defined as any one item for
equipment that exceeds $500 in cost and has a minimum life expectancy of three years.
Personnel Budget. The purpose of the personnel budget is to forecast all expenditures
for personnel compensation (wages, salaries, and fringe benefits). In calculating
personnel compensation, a cost-of-living increase will be given to all employees effective
October 1. This will amount to a 4 percent increase in base wage/salary. DO NOT
udget for any other types of wage/salary increases at this time.
Fringe benefits will be calculated at 22 percent of gross wages for hourly
(clerical/technical) employees and 30 percent of gross salary for monthly (professional)
employees.
If you desire assistance in completing your budget calculations or additional information
in completing your budget estimations, please feel free to contact Pam Jones in
Personnel, La
y Smith in Purchasing, or me.
All figures entered into the budget forms should be rounded to the nearest whole
dollar amount.
BUDGETING SCHEDULE
The schedule for budget completion and review is as follows:
July Budget forms and instructions released to budgeting departments
August Complete budgets returned for review
September Budgets revised and approved by administration
September All budgets submitted to finance committee of board of trustees
September Budget presented for approval at board of trustees meeting
October Begin operating under approved budgets
BUDGET REPORTING
When the budget is completed and we begin operating in the budgeting period (October
1), we must have a follow-up procedure to determine whether our projections are
accurate. Only with a routine follow-up can we determine whether our financial operation
is proceeding as planned. The budget follow-up procedure is outlined below.
1. After the end of each quarter, you will receive a financial report for your department
containing the budgeted figures for each expense category and the actual
expenditures for each expense category, as well as a column indicating the variance
etween the two.
2. Any expense category that has a negative variance of 4 percent or more will require
that you submit a written explanation to the fiscal manager with a copy to your
immediate superior. Your budget report will be marked to indicate which items
equire explanation.
CURE-ALL MEDICAL CENTER
SUMMARY BUDGET REQUEST
DEPARTMENT: ____Business Service Department____ FISCAL YEAR:
____2017-18____
COST CENTER: ___Fiscal Services__
INSTRUCTIONS: Present the total figures from your operating budget, capital
expenditure budget, and personnel budget requests on this summary sheet and attach
this page as the top sheet on your budget package when you submit it to your
administrative head.
REVENUE TOTAL $ 22,510
EXPENSES BY CLASS
01 Supplies $ 3,196
02 Services $ 7,383
03 Other Expenses $ 4,177
04 Capital Equipment $ 6,000
05 Hourly Employees $ 53,976
06 Professional Employees $ 1,59,600
07 Fringe Benefits $ 59,775
EXPENSE TOTAL $ 2,94,107
PREPARED BY:
DATE: 01-08-2017
CURE-ALL MEDICAL CENTER
REVENUE BUDGET
DEPARTMENT: __ Business Service Department__ FISCAL YEAR: __2017-18__
COST CENTER: ___Fiscal Services__
INSTRUCTIONS: Provide an estimate of revenues expected by source. Attach an
explanation of your method of calculation. Revenues generated by inpatient or outpatient
patient services do not get estimated on this document.
Source of Revenue
Per Unit
Price
Volume
Estimate
Total
Revenue
1. Medicare Discharges $ 10 2170 x 50% $ 10850
2. Non Medicare Discharges $ 10 5830 x 20% $ 11660
3.
4.
Grand Total Revenue $ 22510
Prepared by:
Date: 01-08-2017
CURE-ALL MEDICAL CENTER
OPERATING BUDGET REQUEST
DEPARTMENT: ___ Business Service Department __
COST CENTER: __Fiscal Services_
01 Supplies (Specify)
Medical Record forms
General office supplies (pens, tapes, etc)
Letterheads and Envelopes
Computer Paper
Computer Disk
02 Services (Specify)
Mobile File Shelving Service contract
Encoder Software License
Reproduction/Printing
Telephone Service
03 Other Expenses (Specify)
Professional Dues
Service Education Program
Trauma Registry Program
Subscription and CPT
Cost
$ 896
$ 1000
$ 250
$ 800
$ 250
$ 500
$ 1500
$ 3743
$ 1640
$ 2077
$ 1200
$ 460
$ 440
FISCAL YEAR: _2017-18_
TOTAL: (01) $3196
TOTAL: (02) $7383
TOTAL: (03) $4177
CURE-ALL MEDICAL CENTER
CAPITAL EXPENDITURE BUDGET REQUEST
DEPARTMENT: ____ Business Service Department ___ FISCAL YEAR __2017-18__
COST CENTER: _____Fiscal Services__
04. ITEM REQUESTED
Estimated Cost
Per Unit Line
Total
New or
Replacement
Month
Required
Priority
Code*
Approval (Do not
write here)
PC Workstation $ 1500 $ 1500 Replacement Immediately M
PC Workstation $ 1500 $ 1500 New December E
Software $ 3000 $ 3000 New December ...