Budget For Medical-Surgery Department At UMUC Medical Center For The Fiscal Year July 2020 To June 2021
Cost-effectiveness is an essential aspect of enhanced business operation that creates value for all stakeholders. This can only be achieved through proper planning and a well-structured operational framework. A budget is an essential tool for planning all the activities involved within an organization in ensuring the enhanced quality of products and services. In consideration of this together with the directive from the Chief Financial Officer at UMUC medical center, the medical-surgery department advances its budget for the financial year 2020/2021. The budget takes into consideration the need for cost-effectiveness in all systems and processes as well as the directive provided by the CFO relating to the implementation of a 5% reduction in the total expenses in each department.
The budget is made up of several sections including the payroll section, fringe expenses, travel expenses, professional service expenses, and general expenses. All these contributed to the presented budget (see attached excel spreadsheet) totaling to $20,600 per month, which translates to $247,200 annually. The estimated actual monthly operating expenses is $19,905 which translates to $238,960 for the whole year. Through this, the monthly variance that results from the next fiscal year’s budget is $8,240 translating to a monthly variance of $ 695.
The general expenses will account for 25% of the total expenses utilized within the next fiscal year. According to the budget it is allocated $5,100 on monthly basis, which translates to $61,200 for the whole year. The actual expenditure in this regard is estimated to be around $3,865 on monthly basis, which translates to $46,380 annually. These generate a positive variance of $14,820 for the whole year and $1,235 on monthly basis. Out of these, software license fees and employee training have been allocated the biggest share of the total general expenditure. The two operations consume a total of $2800, which is more than 50% of the total amount allocated for general expenditure. Training and development is an essential operation within an individual organization, especially in the highly volatile contemporary world’s business environment. Similarly, the constant technological innovations and inventions witnessed within the current business environment have resulted in several systems and procedures that can be used in enhancing the quality of business operation. Through this, the medical-surgical department prioritized in enhancing the software systems it utilizes and allocated a total of $1800 for the necessary software upgrade.
Employee remuneration obligations took about 50% of the total allocated budget expenditure. Through this, the department’s payroll expenditure is budgeted to be $8545 on monthly basis, which translates to $102,540 for the whole year. The estimated actual expenditure on this $7000 on a monthly basis, which translates to $84,000 annually. The employee bonus is budgeted at $455 on a monthly basis while the employee overtime commitment is budgeted for at $ 1000. These two monthly expenditures translate to $5460 and $12000 for the whole year. Additionally, fringe expenses account for 3% of the total budgetary allocations at $600 on a monthly basis translating to $7,200 for the whole year. However, the expected actual expenditure is deemed to be $8640 for the whole year presenting a negative variance of $1400.
On the same note, traveling expenses is budgeted for at $2650 on monthly basis accounting for 13% of the total budget. This translates to $18000 on an annual basis which is $3000 less than the expected actual expenditure in this regard annually. Airplane tickets account for over 50% expenditure in this regard with a budgeted expenditure of $1500 on a monthly basis.
Generally, the medical-surgical department budget for UMUC health center has taken into account the overall need for enhanced lean operation within the organization to enhance its profitability. This can be seen in several instances where the company prioritized the most essential and necessary expenditure that can create value for all stakeholders and enhance the quality of its products and services. The general expenditure has significantly prioritized employee training and development as well as enhancement of the software systems used. Operation in the contemporary world is significantly dictated by technological innovations and inventions.
Constant update of software systems used within the department will ensure effective and enhanced services provided in a manner that creates value for employees. Similarly, robust training and development programs within the department will ensure its employees are well-exposed to emerging trends and systems hence increase their competency levels and skillset. The budget also prioritizes the department’s remuneration system considering that this utilizes over 50% of the total department’s budget. It is essential to have in place a well-structured remuneration system that acknowledges an individual employee’s total effort. Proper employee motivation ensures individual employees achieve enhanced job satisfaction. This helps in ensuring high employee retention rates and reduced employee turnover; hence maintaining product and service quality. Business operation in the contemporary world requires strategic operations in all aspects including individual departments. This ensures everyone involved is united to achieve the same goal and objectives, thereby enhancing an individual organization’s level of competition.