Budget

3rd Sem Msc Nursing.

1. Budget Estimate, Revised Estimate, Performance Budget Presented by- Sudipta Paul MSC.NURSING 3 rd sem.

2. The term ‘Budget’ means the plan of expenditure & of revenue to balance that expenditure is usually a public authority. Budget is financial expression which includes the income & expenditure. Introduction

3. Budget is a financial plan of the government for a definite period. -Taylor A budget is a tool for planning, quantifying the plans & controlling costs. - Finkler Definition Of Budget

4. To provide a quantitative expression of the plans of the hospital or the institution. To evaluate financial performance in accordance with the plans. To control costs. Purpose of a Budget

5. To supply a mechanism for translating fiscal objectives into a projected monthly spending pattern. Conti….,

6. To enhance fiscal planning & decision making. To clearly recognize controllable & uncontrollable cost areas. To provide a useful format for communicating fiscal objectives. To allow feedback of utilization of moneys spent. Conti……….

7. To identify problem areas & facilitate effective solutions. To provide a means for measuring & recording financial success in accordance with the objectives of the organization. Conti………..,

8. Types of Budgets:

9. Incremental budget: A budget prepared on the basis of a previous period’s budget or actual performance with incremental amounts added for the new budget period.  Types of Budgets:

10. 2. Programme budget: This is one where costs are computed for entire programme, i.e. group total costs for each service programme, e.g. Maternal & child health programme (MCH), family planning programme (FPP), universal immunization programme(UPI), etc. Conti………..

11. 3. Open-ended budget: This is a financial plan in which each operating manager presents a single-cost estimate for the optimal activity level for each programme in the unit. Conti……

12. 4. Flexible budget: This comprises several financial plans, each for a different level of programme activity. It is based on the fact that operating conditions rarely abide by expectations. Conti……….

13. 5. Revenue & expense budget: This is expressed in financial terms & takes the nature of a proforma income statement for the future. Conti,…..

14. 6. Zero-based budgets: This requires the nurse manager to examine & justify each cost of every programme, both old & new, in every annual budget preparation. Conti……….

15. 7. Sales budget: This is the starting point in a budgetary programme, since sales, activities give shape to all other activities. Conti……….

16. 8. Rollover budget: This one forecasts programmes, revenues & expenses for a period more than a year, to accommodate programmes that are larger than the annual budget cycle. Conti……….

17. 9. Fixed-Ceiling budget: This is a financial plan in which the uppermost spending limits are set by the top executive. The unit & divisional managers develop budget proposals for their respective areas. Conti……….

18. 10. Production budget: This is the budget that aims at securing the economical manufacturing of products & maximizing the utilization of production resources. Conti……….

19. 11. Performance budget: This is based on functions not divisions, e.g. direct nursing care, in-service education, quality enhancement, nursing research. Conti……….

20. 12. Capital expenditure budget: This is prepared for assuring planned timely capital investment in the business to ensure the availability of capital at the right time over a longer period. Conti……….

21. 13. Cash budget: This is prepared by way of projecting the possible cash receipts & payments over the budget period. Conti………….

22. 14.Sunset budget: This is designed to ‘self-destruct’ within a prescribed time period to ensure the expenditure is stopped by a predetermined date . Conti…………..

23. Principles Of Budgeting :

24. Fig : Sources of Institute revenue

25. Fig : Extra mural approval system

26. Fig : Intra mural approval system

27. Fig : Budget allocation procedure

28. Performance Budgeting Performance Budgeting

29. The following steps are being taken :- Identify & analyse the work of organization into functions, sub functions, programmes, sub programmes, activities, sub activities in results . Steps

30. 2. Lay down the targets of each scheme, function, programs . 3. Set the performance norms or standards for each activity or task . 4. Identify specific indicators regarding each task . Conti………….

31. 5. Specify means of achieving them . 6. Design the monitoring & evaluation system or performance recording & reporting system . Conti……..

32. It involves the development & use of more refined management tools, e.g . Work measurement studies to measure or to identify various works. Performance standards & its specific indications to measure the performance. Other methods like cost analysis. Tools used in performance budgeting

33. Steps Are Performance Budgeting:

34. Advantages of Budgeting:

35. Fig :Research Budget Plan Sl No Items Month/Semester/Year Sub total 2 nd semester 3 rd semester 4 th semester   1 Personal Cost (Technical & administrative staff) -- -- --   -- 2 Travel cost a. Local transport -- 3000/- 4000/-   4500+3000= 7000/- 3 Equipment -- -- 2000/- 2000/- 4 Materials, Services, & Expendables Stationery & Photocopying b. Postage, telephone, internet services   1500 /-   800/-   2000 /-   1700/-   2000 /-   1600/-   5500 + 4100 = 9600/- 5 Special activities   --   -- 2000/- 2000/- 6 Networking   -- --   --   --   7 Monitoring & Evaluation   -- --   -- --   Total Expenditure: 20600/- Overhead: 10% (Means T× 10%) = 2060/- Contingency Cost: 10% (Means T× 10%) = 2060/- Grand Total = ( T+ Overhead + Contingency cost) =20600+ 2060+ 2060= 24720/- Total = 20,600/-