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Monthly Salary Budget and Year-to-Date Budget Comparison Report Fiscal Year Ending June 30 Position June Actual Salary June Budgeted Salary June Variance Year-to- Date Actual Salary Year-to-Date Budgeted Salary Year-to-Date Variance Nurse Manager $6,250 $6,250 $0 $68,750 $75,000 $6,250 Registered Nurses 95,722 93,825 (1,897) 1,048,813 1,125,878 77,065 Licensed Practical Nurses 19,025 20,800 1,775 231,426 249,600 […]

Determine hours of replacement time per individual. To determine FTEs required for replacement: 1. Determine hours of replacement time per individual. 2. Then determine FTE requirement. Benefit Time Hours/shift Replacement Hours 15 vacation days * 8 hours = 120 8 holidays * 8 hours = 64 4 personal days * 8 hours = 32 5

BUDGETING AND MANAGING FISCAL RESOURCES:Determining the Salary (Personnel) Budget Determining the Salary (Personnel) Budget The salary budget, also known as the personnel budget, projects the salary costs that will be paid and charged to the cost center in the budget period (see Table 14-1). Managing the salary budget is directly related to the manager’s ability

Expenditures may also be direct or indirect. Direct costs are expenses that directly affect patient care. For example, salaries for nursing personnel who provide hands-on patient care are considered direct costs. Indirect costs are expenditures that are necessary but don’t affect patient care directly. Salaries for security or maintenance personnel, for example, are classified as

Classification of Costs:Costs are commonly classified as fixed or variable. Fixed costs are costs that will remain the same for the budget period regardless of the activity level of the organization, such as rental payments and insurance premiums. Variable costs depend on and change in direct proportion to patient volume and patient acuity, such as

The Expense Budget The expense budget consists of salary and nonsalary items. Expenses should reflect patient care objectives and activity parameters established for the nursing unit. The expense budget should be comprehensive and thorough; it should also take into consideration all available information regarding the next year’s expectations. Described in the next section are several

The advantage of zero-based budgeting is that every expense is justified. The disadvantage is that the process is time-consuming and may not be necessary. For that reason, organizations may not use this process every year. An adaptation of the zero-based budget is to start the budget with a lower base, for example, 80 percent of

MANAGING RESOURCES ● Wage increases of market adjustments ● Price increases, including inflation rate, for supplies and other costs ● Costs for new equipment or technologies (e.g., wound vacs, sequential compression devices, monitoring equipment) ● Staff mix (e.g., RNs, LPNs, UAPs) ● Regulatory changes (e.g., legislation mandating nurse-to-patient ratios, state board of health regulations) for

Budgeting is a process of planning and controlling future operations by comparing actual results with planned expectations. Planning first involves reviewing established goals and objectives of both nursing and the organization. Goals and objectives help identify the organiza- tion’s priorities and direct the organization’s efforts. To plan, the organization must know the following: ● Demographics

The Budgeting Process A budget is a quantitative statement, usually in monetary terms, of the plans and expectations of a defined area over a specified period of time. Budgets provide a foundation for managing and evaluating financial performance. Budgets detail how resources (money, time, people) will be acquired and used to support planned services within