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Capella University Developing an Operating Budget Worksheet

Capella University Developing an Operating Budget Worksheet


  • For this assessment, you will develop a 2-4 page review on the importance of the budgeting process to a health care organization, as well as demonstrate an understanding regarding the differences between an operational budget and a capital budget. Additionally, you will prepare an operational budget for the medical-surgical department at the St. Anthony Medical Center.Introduction
    Note: This assessment uses Vila Health: Developing an Operating Budget as the context for developing your budget. Please make sure you have reviewed this multimedia before you complete your assessment submission.Financial management is something that touches us all. We are each responsible for our own personal and family budgets, and many of us are also responsible for budgets at work. Regardless of your experience with financial management, it is a critical skill to have, and it will be necessary to master this skill as you move forward in your health care administration career. Almost all health care administrators will be responsible for a budget at some point in their careers. Administrators must also know how to read basic financial statements and reports to assess the performance of their organization, other organizations, or their department.Budgeting is an important consideration in strategic planning for any health care organization. The most basic definition of budget is a plan that identifies expected financial inputs and outputs. A budget should be closely aligned with a strategic plan, which is a strategy used by an organization to achieve its mission. Organizations may use different types of budgets, such as master budgets, operating budgets, revenue budgets, expense budgets, cash budgets, and capital budgets (Finkler, Smith, & Calabrese, 2020). We will explore each at a high level.For this assessment, you will be asked to consider the different types of budgets that are used in the health care field. By researching other organizations that use budgets, you will apply the course materials to a real-world situation. The assessment will further refine those skills as you navigate the St. Anthony Medical Center medical-surgical department budget (from the Vila Health multimedia). You will prepare a paper and a basic budget to demonstrate the knowledge that you acquired this week.Many learners enter the field with limited exposure to finances. Depending on your current knowledge and comfort level with the subject, it may be necessary to conduct additional research and spend extra time addressing some of the basics. In other words, the resources in this course will help to provide a foundation for you to complete the assessments, but it is possible that you will need to do your own research in the Capella University Library to fully address all scoring guide criteria.Demonstration of Proficiency
    By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
    • Competency 1: Explain the importance of reporting in health care. 
      • Explain why budgets are an important part of the planning process.
      • Explain the difference between operating, project, and capital budgets.
      • Analyze the impact of the budget on the operations of the organization.
    • Competency 2: Develop a departmental budget. 
      • Provide this year’s correct revenue and expenses.
      • Estimate the correct revenue, expenses, and net revenue/expenses for the next fiscal year.
    • Competency 3: Communicate in a manner that is scholarly, professional, and respectful of the diversity, dignity, and integrity of others and consistent with the expectations for health care professionals. 
      • Adhere to the rules of grammar, usage, and mechanics.
      • Apply APA formatting to in-text citations and references.
    • Reference
      Finkler, S. A., Smith, D. L., & Calabrese, T. D. (2020). Financial management for public, health, and not-for-profit organizations (6th ed.). CQ Press.Instructions
      The assessment has two distinct parts:Part 1: Medical-Surgical Department Operating Budget
      Relevant scoring guide criteria:
    • Provide this year’s correct revenue and expenses.
    • Estimate the correct revenue, expenses, and net revenue/expenses for the next fiscal year.
    • For Part 1 of this assessment, you will use the information presented in the Vila Health: Developing an Operating Budget multimedia as context to create your operating budget. Using the data provided in the first three (3) columns, you will be developing an operating budget for the medical-surgical department at the St. Anthony Medical Center for the next fiscal year, as well as estimating the revenue and expenses for the remainder of the current fiscal year. (Assume that next year’s revenue will be unchanged from the current year’s revenue; however, the department will need to cut operating expenses by 5 percent for next fiscal year.)You may download and use the Excel spreadsheet from the multimedia as your template for this part, or the Excel spreadsheet Medical-Surgical Department Budget [XLSX] can also be found under “Resources.”Part 2: Types of Budgets and Their Importance
      In the second part of the assessment, you will demonstrate your understanding of the importance of budgets within the context of financial and strategic planning for health care organizations. A comprehensive analysis of the budget consists of your interpretation of the numbers: What are the numbers telling you? Use the readings from your Financial Management for Public, Health, and Not-for-Profit Organizations as well as the independent research you conducted to fully develop a 2–4 page (excluding cover and references pages) response to the relevant scoring guide criteria:
    • Explain why budgets are an important part of the planning process. 
      • “Explain” means to make something (an idea, situation, or problem) clear to someone by describing it in more detail or revealing relevant facts or ideas.
    • Explain the difference between operating, project, and capital budgets.
    • Analyze the impact of the budget on the operations of the organization. 
      • “Analyze” means to examine methodically and in detail the constitution or structure of something (especially information), typically for purposes of explanation and interpretation.
    • Discuss the hospital budgeting process.
      • Calculate next year’s budget based on current-year data and directives from senior leadership based on a strategic plan.Your Office
        You are the administrator of the Medical-Surgical Department at St. Anthony Medical Center, the third largest hospital in the Twin Cities metro area. You will be creating the budget for your department. To prepare, you have to go to a budget meeting for the overall hospital, where you’ll hear about the current fiscal year — and how reality is corresponding to the assumptions in the budget.You have a voicemail from Owen Welch, CFO.Leadership Meeting
        It’s time to head over to the meeting with hospital leadership to talk about the budget for the coming fiscal year.Conclusion
        You have completed the Vila Health: Developing an Operating Budget. In this activity, you learned about some budget realities at St. Anthony Medical Center, and some trends to keep in mind as you develop your budget for the Medical-Surgical Unit.

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