Presented by sadhna Shukla

M.sc. nursing 1st year

INTRODUCTION
• The word “budget” derived from the old English word “budgette”
means a sack of pouch. Budgeting is the process of constructing a
plan to spend your fund and this spending plan is called a budget .
Budgeting is the heart of administrative management.it serve as a
powerful tools of coordination and negatively an effective device of
eliminating duplication and the wastage. now the term “budget”
refers to the financial papers, certainly not to the sac.
DEFINITION
• “Budget can be defined as a numerical statement expressing the
plans policies and goals of an organization for a definite period in
future.”

• “Budget is a financial plan of government for a definite period.”

• {according to taylor}
PURPOSE
➢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.
➢ To supply a mechanism for translating fiscal objectives into a projected monthly
spending pattern.
➢ To enhance fiscal planning and decision making.
➢To clearly recognize controllable and uncontrollable cost area.
➢To provide a useful format for communicating fiscal objectives.
➢To allow feedback of utilization of moneys spent.
➢To identify problem areas and facilitate effective solutions.
➢To provide a means for measuring and recording financial success in accordance
with the objectives of the organization.
FEATURES
• Should be simple in design and familiarized to those who use it.
• Should be flexible.
• Should be synthesis of past, present and future.
• Should be in the form of statistical standard laid down in the specific
numerical terms.
• Should have support of top management throughout the period of its
planning and implementation.
• It composed of two segments that are income and expenditure,
income limits expenditure.
Continuation……….
• Budget is forward planning.
• It is the instrument of administration and management.
PRINCIPLES
• Should provide Sound financial management.
• Based on objectives & policies of the organization.
• Planned on advance effort.
• Under directions & supervision of the administrator or financial officer.
• Prepared and interpreted consistently throughout the organization.
• review of the performance of the of the previous year and an evaluation
of its adequacy both in quality and quantity.
• While developing a budget the provision should be made for its flexibility.
• Appropriate to the nature.
• Budget should ensure the most effective use of financial and non financial
resources.
IMPORTANCE
▪ Needed for planning future course of action and control over all
activities in the organization.
▪ Facilitates coordinating operation of various departments and sectors.
▪ Budget serve as guide for action in the organization.
▪ Helps to weigh the values and make decision when necessary.
CLASSIFICATION OF BUDGET
There are three type of budget:-
1. Personnel budget
2. Operating budget
3. Capital budget
OTHER TYPE OF BUDGET
• Sales budget:-sales budget is a functional budget. the sales budget
refers to the estimation of the sales revenue and the sales overheads
for a particular period.
• Production budget:- production budget is a budgetary plan that
details the total number of products that will be manufactured over a
given period along with the costs.
• Purchase budget:- it based on production budget.it estimate the
purchase requirement of material utilized in the production process.
• Incremental budget:-incremental budget is the process of creating a
new budget by making minor changes to the current budget.
Continuation……..
• Open ended budget:- a financial plan in which each operating manager
present a single cost estimate for the optimal activity level for each
programme in the unit.
• Fixed ceiling budget:- it is financial plan in which the uppermost spending
limit is set by top executive before the unit and divisional manager
develops budget proposals for their areas of responsibility.
• Cash budget:-cash budget consolidates all the cash inflows and outflows
for the business.Cash budget helps the business to plan the projects,
purchases as well as to provide for the loan requirements.
• Master budget:- master budget is usually a one year budget expressing the
expected asset position and capital and liability positions for the projected
year.
Continuation……
• Flexible budget:-flexible or variable budget reflects and combats the
changes in expenditure as a result of changes in volume of production
and revenues.
• Zero based budgeting:-zero based budgeting starts from a zero base
and every function within an organization is analysed for its needs
and costs.
• Programme budget:-programme budget is one where costs are
computed for a total programme. example- mch, family planning etc.
• Capital expenditure budget:-these budget plan for long term
investment and includes expenditure for new plant and equipment,
major installation replacement of existing equiepment, building etc.
STEPS IN BUDGETING
• collection of past data

assess success and failure of past

• setting objectives for forecast year

• objectives arranged in terms of indicated units

Continuation…….
• preparation of budget report

• review of budget report

• evaluation for modification or changes

• final presentation before board of trustees for decision

BUDGETING FOR NURSING INSTITUTION
• School/college of nursing should have a separate budget, principal in
charge of the school of nursing should be drawing the budget .(as per
government rules regulations and as seemed necessary for running
an educational institutions.)

• Both the school/college and hospital should have separate budget.

The budget for the school or college is annually planned by the
nursing director ,principal and general manager and approved by the
managing director
STEPS IN BUDGET FOR COLLEGE OF
NURSING/HOSPITAL
• 1. Request the nursing officers and supervisors to present their needs
for coming year by a specified date.
• 2. Review the budget appropriation and actual expenditure for the
current year.
• 3. ascertain whether any changes are contemplated such as opening
new facilities patients or changes in other departments, which affect
the nursing services required.
• 4. Prepare the new budget.
To be continue…..
• 5.Estimate the requirement for the coming year from the information
supplied as the expenditure for supplies, equiepments salaries of
personnel and repairs to date.
• 6. Determine the percentage of salaries of personnel. eg. Principal.
Vice Principal. Professors, Lecturers, Librarian, Clerk, Peon, etc.
• 7. Prepare a summary of new needs, both personal and material with
data to support the request.
BUDGET MODEL PREPARE FOR
COLLEGE OF NURSING
• Recurring expenditure
• Nursing faculty salaries
• Non teaching staff
• Hostel staff
• Journals and periodicals for
Library
• Inspection fees
allotment expenditure remaining
3,8000000 3,8000000
21,60,000 21,60,000
10,00000 10,00000
500000 500000
10,00000 10,00000
 Continue…….
recurring expenditure

University fees 14,00000 13,80000 20,000

Security 7,00000 6,66232 33,768
Cleaning 14,00000 13,80,000 20,000
Speed post 4000 - 4000
Stationary 80,000 79,988 12.00
Petrol 80,000 79,996 4.00
Book 3000 3000 -
total 4,63,27000 46220291 106709
 Continue……
• Non recurring expenditure
allotment expenditure remaining
• Building construction academic block - - -
• Building construction for hostel block 3,40,50,000 3,40,50,000 -
• A.V aids 10,57000 10,50,955 6,045
• Library 37,00000 3700000 -
• Vehicles 20,00000 20,00000 -
• Furniture 12,70,200 12,70,000 200.00
• Equipment 300000 300000 -
• Simulation model 46,60,500 46,50,445 10,055
• total 47037700 47021400 16300
 continuation

Recurring expenditure- 46220291

Non recurring expenditure- 47021400
total expenditure - 93241691
ADVANTAGE OF BUDGETING
• Budget process helps management learn from past
• It is the blue print of the company
• Agency activities can be coordinated and balanced
• Budget plan for detailed programe activities
• It encourages managers
• Staffing, equiepments &supply needs can be projected
• Budget improves communication at all levels.
• Help clarify accountability & responsibility
• Produces cost saving
• Help to create cost awareness
DISADVANTAGE OF BUDGETING

✓Skill &experience are required for successful budgetary

control.
✓Over budgeting leads to over expenditure
✓Restrict the activity
✓There is a danger of over budgeting
✓Budgetary goals may suppress agency goals
✓Budget planning is time consuming and expensive
Role and responsibility of principal or nurse
administrator in budgeting
• Participation in planning budget
• Consult an take assistance of his/her subordinates
• Request sufficient funds
• Submit budget request
• Support the budget when it is allotted.
• Cover the routine budget control
 CONCLUSION
Hence budgetary control is an important tools for any organization to
establish a budget for future events. It helps organization in proper
utilization and control of its resources. Budget are estimates and are based
on forecast which are not certain . Therefore the effectiveness of budgetary
control depends on the availability and quality of the forecast.
BIBLIOGRAPHY
• BHASKAR RAJ E, BHASKAR NIMA, “text book of nursing education” 1st
edition, EMMES medical publishers Banglore.
• BT BASAVANTHAPA “nursing administration” 1st edition Jaypee
publication.
• ETEANOR J SULLIVAN , PHILIP J DECKER “effective leadership and
management in nursing” 4th edition published by edition wesely .
• G.R KULKARNI “financial management for hospital administration”
Jaypee brothers publication new Delhi.
• JOGVINDRA VATI “principles and practice of nursing management and
administration” 1st edition Jaypee brothers publication.
• P.C TRIPATHI,PN REDDY “principles of management” 2nd edition
mc- graw publication New Delhi.