Resource Management &

Financial Management
Presenter: Aisha Parveen
Asst Professor FUCN
Objectives
At the end of this unit the learners will be able to:
1. Describe the purpose of budgets.
2. Differentiate and manage different types of budget.
3. Discuss the importance of budget for nurses.
4. Apply specific terminology of budget.
5. Discuss goals setting to establish budget.
6. Discuss the elements of preparing, controlling and monitoring budget.
7. Determine the efficiency of selected budget.
8. Describe the applications of budgeting in their specific institution
What is Budget?
• Budget is an itemized summary of likely income and expenses for a
given period
• It’s an invaluable tool to help you prioritize your spending and
manage your money-no matter how much or how little you have

• Planning and monitoring your budget will help you identify wasteful
expenditures, adapt quickly as your financial situation changes, and
achieve your financial goals.
Purpose of Budget
• Translating monetary objectives into spending pattern
• Enhances monetary planning and decision making
• Controllable and uncontrollable cost areas
• Allows feedback of utilization of available resources
• Helps to identify problem areas and facilitates effective
solution
• Measuring and recording financial success with objectives of
organization
Benefits of Budgeting
• Gives you control over your money
• Keeps you focused on your money goals
• Makes you aware what is going on with your money
• Helps you organize your spending and savings
• Provides you with an early warning for potential problems
• Determine if you can take debt and how much
• Enables you to produce extra money
Types of Budget
Operating Budget Deals with the expenses necessary to run the day to day business.
(salaries, supply and material costs)

Capital Expenditure Deals with the items assets which are purchased for long-term use and
Budget are not likely to be converted quickly into cash, such as land, buildings,
and equipment.
Cash Budget It deals with cash inflows and outflows including revenues collected, expenses
paid and loans receipts and payments.

Staff / Personnel Budget It is used to plan for new hires and attrition. It enables you to add, remove, and
otherwise adjust your existing employees.

Strategic Planning Budget The strategic plan lays out the direction and goals of the business and
guidelines for actions to achieve those goals.

Master Budget The master budget is the aggregation of all lower-level budgets produced by a
company's various functional areas, and also includes budgeted financial
statements, a cash forecast and a financing plan.
Steps involved in the Planning Cycle
• Targets developed by the Service Lines / Departments are
consolidated to develop the entity level plan
• This consolidated plan is then presented to Executive Committee (EC).
• EC reviews the plan and after making necessary iterations submits this
plan to Board of Trustees (BoT)
• BoT reviews the comprehensive plan and provides their feedback.
• After incorporating of the suggestions and guidance from the BoT, this
plan is finally submitted to the Chancellor for the approval

• Chancellor reviews the consolidated plan and if deem necessary asks

for the iterations and if deem feasible approves the budget for the
year
• After approval from the Chancellor, this approved budget is then
circulated by the Offices of the Executive Committee to the respective
entity heads
• This approved budget is then monitored on monthly basis in the form
of Budget Variance Reports (BVRs) and Financial Performance etc.
•
• Reasons are sought for the variances between the Actual and the
budget targets and solutions are derived to sort them
• Efforts are made to achieve the budget by introducing new packages,
new services etc.
Importance of budget for nurses.
• Resource • Nurses need to manage their resources effectively,
Allocation including time, supplies, and manpower.
• A budget helps them allocate these resources
optimally, ensuring that they can provide quality care
while staying within financial constraints.
• Scheduling shifts efficiently, ordering supplies
judiciously, and coordinating with other healthcare
professionals to maximize the use of available
resources.
Importance of budget for nurses Cont,..
• Patient Care: • Nurses need to ensure that they have the
necessary equipment, medications, and
facilities to provide appropriate care to
patients.
• By adhering to a budget, nurses can
prioritize patient needs, prevent shortages or
stocks of essential items, and maintain a safe
and hygienic environment conducive to
healing.
Importance of budget for nurses Cont,..
• Staffing Levels: • Staffing is one of the most significant expenses
for healthcare organizations. Nurses play a key
role in workforce management, ensuring that
staffing levels are appropriate to meet patient
demand while controlling labor costs.
• Effective budgeting allows nurses to schedule
staffing levels based on patient acuity, optimize
productivity, and minimize overtime expenses.
Importance of budget for nurses Cont,..
• Continuing • Budgeting is essential for providing nurses with
Education and opportunities for continuing education and
Training: training to stay abreast of advancements in
healthcare.
• By investing in professional development
programs, nurses can enhance their skills,
improve patient outcomes, and contribute to
the overall effectiveness of the healthcare
organization.
Importance of budget for nurses Cont,..
• Quality • Budgeting supports quality improvement initiatives
Improvement aimed at enhancing patient safety, satisfaction, and
Initiatives: outcomes.
• Nurses play a central role in identifying areas for
improvement, implementing evidence-based
practices, and monitoring outcomes.
• Budgetary allocations for quality improvement
activities enable nurses to implement best
practices, invest in technology and infrastructure
upgrades, and measure the effectiveness of
interventions.
Importance of budget for nurses Cont,..
• Financial • Healthcare organizations operate in a complex
Sustainability: economic environment characterized by fluctuating
revenues, rising costs, and competing priorities.
• Nurses contribute to the financial sustainability of
their organizations by managing resources
efficiently, minimizing waste, and advocating for
cost-effective practices.
• By adhering to budgetary constraints, nurses help
ensure the long-term viability of their organizations
and their ability to continue providing high-quality
care to patients.
Student's Activity
Scenario 1
• Public Hospital • Background:
Funding Crisis • A public hospital in a populated urban area is
facing a funding crisis due to cuts in government
healthcare expenditure. The hospital serves a
diverse community, including low-income
individuals who rely on its services for primary
and emergency care.
• Challenge:
• With reduced funding, the
hospital must find ways to
maintain quality care while
operating within a significantly
tighter budget. This might
involve cutting non-essential
services, reducing staff numbers,
or delaying necessary equipment
upgrades.
• Impact:
• Patients may experience longer
wait times, decreased access to
specialized treatments, and
overcrowded facilities. The
hospital's reputation could
suffer, leading to decreased
patient trust and potential long-
term financial effects.
Scenario 2
• Rising Costs of • Background:
Specialized • A small community hospital is grappling with the
Treatments increasing costs of specialized treatments, such
as cancer therapies or organ transplants. These
treatments are essential for improving patient
outcomes, but they come with hefty price tags
that strain the hospital's budget.
• Challenge:
• Balancing the provision of
necessary specialized treatments
with limited financial resources
presents a significant challenge.
The hospital must decide
whether to invest in these costly
treatments at the expense of
other services or seek
alternative funding sources.
• Impact:
• Patients may face barriers to
accessing life-saving treatments,
leading to poorer health
outcomes and increased
mortality rates within the
community. The hospital may
also struggle to retain skilled
medical professionals if it cannot
offer competitive salaries or
resources for their work.
• Each of these scenarios highlights the complex budgetary challenges
faced by healthcare organizations, whether they're large public
hospitals or small rural clinics.
• Finding sustainable solutions to these challenges requires careful
planning, resource allocation, and collaboration among stakeholders.