Budgeting: Hidayatullah Khan MSN, BSN, DPHN, RN Lecturer KMU-Ins

Hidayatullah khan
MSN, BSN, DPHN, RN

Lecturer KMU-Ins
BUDGETING
The allocation of scarce
resources on the basis of
forecasted needs for the
proposed activities over a
specified period of time
.
hidayat.khan10@yahoo.com 7–4
hidayat.khan@yahoo.com
Approaches to budget
(technique of budgeting)
 A method of budgeting in which all expenses
must be justified for each new period. Zero-
based budgeting starts from a "zero base" and
every function within an organization is
analyzed for its needs and costs. Budgets are
then built around what is needed for the
upcoming period, regardless of whether the
budget is higher or lower than the previous one.
 The incremental approach to budgeting
combines the costs identified from the previous
accounting period with percentage additions.
These percentage additions are utilized to cover
two key areas which include cost increases as a
result of inflation or higher purchases costs and
predictions associated with increases in costs
and income as a result of business volume
predictions.

 Fixed budgets are budgets that are drafted on the
basis of specific criteria, and do not allow any room
for any changes or variations in activity at any point
during the period of time covered by those budgets.
For businesses, this means that a fixed budget is
drafted for a calendar or operational year, and is not
amended at any time during that year, even if there
are changes in the level of business activity that
take place. This is true whether the company
experiences a sudden increase in profits or a slump
in sales.
 A flexible budget is a budget that
adjusts or flexes for changes in the
volume of activity. The flexible
budget is more sophisticated and
useful than a static budget, which
remains at one amount regardless
of the volume of activity.
 There are three types of expenditures that the
unit manager is directly involved in, those are
personnel, operating, and capital budgets
 The largest portion of the budget expenditures is
personnel budget; because healthcare is labor
intensive (not machines intensive).
 The personnel budget includes actual worked time
(Productive time), and time the organization pays
the employee for not-working time (Non-
productive time).
 Non-productive time includes the cost of benefits,
new employee orientation, employee turnover, sick
and holiday time, and
 education time.
 It includes such daily expenses as the cost of
electricity, repairs and maintenance, and
medical/surgical supplies (as syringes,
catheters…etc).
 Capital budgets plan for the purchase of
buildings or major equipment (of long-life equal
or greater than 5 to 7 years) which is
not used in daily operations, and is more expensive
than operating supplies.
 Examples of capital budget include: renovation
of a major wing in the hospital, purchasing
equipment as call-light system, hospital
beds…etc.
CONTENT
Salaries for professional, clerical and domestic
staff and drivers
Stipends for students
New equipments and repairs
Linen and other household supplies
Maintenance of vehicle and cost of petrol and
diesel
Maintenance /purchasing books, furniture’s and
other items of library.
Office supplies including stationary and postage
Contingency fund
 The library –purchase of books, journals
and daily newspapers, for binding of
journals, for stationary, such as index card,
label etc.
 Incidental teaching equipment – charts,
films, slides, transparencies, pen, chalk etc.
 Office supplies- stationary items
 External lecturers- for payment in
accordance with the policy of the
controlling authority
 Contingencies
hidaya
t.khan
@yah
oo.co
 by the principal
CNS
Unit Manager
Assisted by office
staff and school staff
BUDGET PROPOSAL
Budget approved in the
previous year, the actual
expenditure and projected
budget will be enclosed.
Then the letter with all these

enclosures will be forwarded to
the Finance director.
Stages of budget
 Usually a set number of months before the start of
fiscal year for the budget
 Develop objective and management plans
 Gather all financial, historical, and statistical data
and distribute to cost-center manager
 Analyze data
 Prepare unit budget
 Present unit budget for approval
 Revise and combine into organizational budget
 Revise and distribute to cost-center manager
 Direct and evaluate expenses and receipts
 Revise budget if indicated

Budgeting: Hidayatullah Khan MSN, BSN, DPHN, RN Lecturer KMU-Ins

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Hidayatullah khan

MSN, BSN, DPHN, RN

Then the letter with all these

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