PADMASHREE INSTITUTE OF NURSING. M.Sc. Nursing Ill years (2009-2011 batch) FISCAL)PLANNING (BUDGETING) Introduction Budgeting is the heart of administrative management. It serves as a powerful tool of co- ordination and negatively an effective device of eliminating duplication and the wastage. These are served by devices such as justification of estimates, supervision of the use of appropriate funds, timing of the rate of expenditure and the like. Definition: A budget may be a simple plan of ones personal finances, or it may be a complex document used by large organization. According to TN Chhabra “a budget is an estimation of future needs arranged according to orderly basis covering some or all activities of an enterprise for a definite period of time” According to Dimock “Budget is a balance estimated expenditure and receipts for a given period of time, In the hands of the administrator the budget is the record of the past performance, a method of current control and projection of future pans”. Feature of budget © Budget should be simple in design and oriented to those who use it © Itshould be flexible. It should be adjust various needs and conditions of the institution * It should be synthesis of past, present and future * It should be product of joint venture and co-operation of executives/ department heads at different levels of management. © Budget is composed of two segment; that are income and expenditure. Income limits expenditure; hence income should be estimated prior to the estimation expenditure. * A budget reflects the goals and aspirations of the faculty * Budget making involves the whole situation © Budget is forward planning. Planned activities are vital for efficient and successful functioning ‘© A budget gives direction- it is more than the list of the desired and approved expenditure. Itis also the instrument of administration and management. © It should have support of top management throughout the period of its planning and supplementation. * Budget has a time period usually annual. It is important to secure the maximum participation of organization in preparation on of budget. PREPARED BY: ANOOP, CHETAN, DEEPAK, LINGARAJ, SARATH CHANDRAN, MITHUN ——————PADMASHREE INSTITUTE OF NURSING. M.Sc. Nursing II years (2009-2011 batch) Purposes of budget 1. To provide definite targets for income and expenditure of the department 2. To co-ordinate the activities of the different functional heads in the working of these departmental budget To enable a cash flow statement prepared month by month To aid management in formulating future policy decision to promote the growth and welfare of the organizations To provide useful tool for the control of costs To provide a tool for communication and co ordination within the organization. To improve financial planning and decision making. To identify controllable and uncontrollable cost area. ro eta Importance of budget Budget is a numerical description of expected income and planned expenditure for an organization for a specified period of time. It is a concrete, picture of the total operation of an enterprise/ organization/ institution in monetary term, Le., finance The following point serves the importance of budget: > Budget is needed for planning for future course of action and to have a control over all activities in the organization > Budget facilities co coordinating operation of various departments and sections for realizing organizational objectives. > Budget serves as a guide for action in the organization > Budget helps one to weigh the values and to make decision when necessary on whether one is of a greater value in the programme than the other Principles of Budget Budget is an operational plan for a definite period, usually a year, expressed in financial terms and based on expected income and expenditure. 1, Budget should provide sound financial management by focusing on requirement of the organization 2. Budget should foc of the organization. It must flow from objectives and give realistic expression to the way of realizing such objectives. on objectives and poli 3. Budget should ensure the most effective use of scarce financial and non financial resources. 4, Budget requires that programme activities planned in advance 5, Budgetary process requires consistent delegation for which fixed duties and responsibilities are required to be allocated to managers at different level for framing and executing budget. PREPARED BY: ANOOP, CHETAN, DEEPAK, LINGARAJ, SARATH CHANDRAN, MITHUNPADMASHREE INSTITUTE OF NURSING. M.5c. Nursing Il years (2009-2011 batch) 6. Budgeting should include coordinating efforts of various departments establishing frame of reference for managerial decisions, and providing a criterion for evaluating managerial performance. 7. Setting budget target requires an adequate checks and balance against the adoption of too high or too low estimate. Utmost care is ng targets. must for 8. Budget period must be appropriate to the nature of business or service and to the type of budget. 9. Budget is prepared under the direction and supervision of the administrator or finance officer. 10. Budget is to be prepared and interpreted consistently throughout the organization in the communication of planning process. 11. Budget necessitates a review of the performance of the previous year and an evaluation of its adequacy both in quantity and quality. 12. While developing a budget, the provision should be made for its flexibility. STEPS IN BUDGETING COLLECTION OF PAST DATA ASSESS SUCCESS AND FAILURES OF PAST SETTING OBIECTIVES FOR FORECAST YEAR OBJECTIVES ARRANGED IN, es OF INDICATED UNITS PREPARATION OF REPORTS ON EXPENSES, PREPARATION SE wOROER REPORT REVIEW OF aise REPORT EVALUATION FOR MODIFICATION OR CHANGRS FINAL PRESENATION BEFORE sokrp OF TRUSTEES FOR DECISION PREPARED BY: ANOOP, CHETAN, DEEPAK, LINGARAJ, SARATH CHANDRAN, MITHUN ee ——————————————PADMASHREE INSTITUTE OF NURSING. M.Sc. Nursing II years (2009-2011 batch) GENRAL BUDGET: How to make your self Step 1 : Determine your monthly income Take into consideration your payroll deductions (health insurance or other group benefits, income taxes, union dues, pension) and other sources of income. — Add together all income, less deductions. On a piece of paper record the resulting figure as VALUE A. Step 2: List your “fixed” and “variable” monthly expenses Such as housing, utilities, food and transportation. Remember to allocate funds for clothing, medical care, child care, personal expenses, recreation and emergencies/repairs — Add all of your expenses-this is VALUE B. Step 3: Find your “discretionary income” — By subtracting your total expenses (B) from your total net income (A). — Write this number down on a piece of paper as VALUE C. Step 4: List all unsecured debts + The monthly payments and the balances. If you don’t know your exact debt amount, now is the time to determine it. — Write this number down on a piece of paper as VALUE C. Step 5: Determine if you have any remaining discretionary income + After making these installment payments by subtracting your total monthly payments to creditors (D) from your discretionary income (C).. + If this figure is a negative number, you are not ready for Step 6 — setting goals. Consult a personal financial counsellor and work on getting this figure into the positive numbers Step 6 to establish short- and long-term goals 511/790 + Make alist of these goals > Long-Term — Real Estate Purchas > Short-Term — Home Improvements, New Car, Travel > Other Desired Investments ~ Stocks, Bonds, CDs, Mutual Funds + Determine how much you need to save monthly 's, Future Education, Retirement PREPARED BY: ANOOP, CHETAN, DEEPAK, LINGARAJ, SARATH CHANDRAN, MITHUNPADMASHREE INSTITUTE OF NURSING. M.Sc. Nursing Il years (2009-2011 batch) Steps in effective budgeting process + Determine the requirements: inputs from all levels of hierarchy must be obtained + Develop plan: Budget for 12months is set. Zero-Based budget + Analyze and control the operation: continuous monitoring is essential ition + Review the plan: Periodic revision and modifi Steps in budgeting for college of nursing + Request for the needs of various departments + Review the budget appropriation and actual expenditure for the current year + Contemplated changes + Salary fixation + Requirement estimation + Summary of new needs ‘The steps of planning budget for nursing unit + Assistance of his/her subordinates + Review of budget + Ascertain changes + Preparing requirements + Summary of new needs + Submitting to institutional administrator Roles and Responsibilities of the Nurse Administrator/Principal in Budgeting — Participation in planning budget — Consult an take assistance of his/her subordinates — Request sufficient finds — Submit budget request — Support the budget when it is allotted Cover the routine budget control 1 PREPARED BY: ANOOP, CHETAN, DEEPAK, LINGARAJ, SARATH CHANDRAN, MITHUN —_—_————$—$