Course : M.

Sc Nursing

Subject : Nursing Management

Unit : IX – Fiscal Management – Part IV
Topic :Budget for College of Nursing
AIM:
At the end of class students will be able to implement their
knowledge regarding budgeting in practice.

Objectives:-
At the end of class students will be able to…
• Define budgeting.
• Enlist purposes of budgeting
• Describe classification of budget.
• Enlist principles of budgeting.
• Explain budgeting process.
• Explain budgeting for nursing institutions.
• Enumerate the role of nurse administrator in budgeting.
DEFINITION:

Budget is a concrete precise picture of the total

operation of an enterprise in
monetary terms.
-HM Donovan

Budget is a financial plan of the government for a

definite period.
-Taylor
PURPOSES OF BUDGETING:

• To provide a quantitative expression of the plans of the

institution.
• To evaluate financial performance in accordance with the
plans .
• To control costs
• To supply a mechanism for translating fiscal objectives
into a projected monthly spending pattern.
• To enhance fiscal planning an decision making.
Contd…

• To clearly recognize controllable and uncontrollable cost

areas.
• To identify problem areas and facilitates effective solution.
• To provide a means for measuring and recording financial
success in accordance with the objectives of the
organizations.
Types of Budget:
• Master and Functional budgets
• Capital and Revenue budgets
• Long term and Short-term budgets
• Fixed and Flexible budgets.
• Incremental budget
• Open ended budget
• Roll over budget
• Performance budget
• Programmed budget
• Sunset budget
• Sales budget
• Production budget
Principles of budgeting:

 A budget should provide sound financial management by

focusing on the requirement of the organizations.
 A budget should focus on objectives and policies of the
organization. It must flow from objectives and give realistic
expression to the realizations of such objectives.
 A budget should ensure that programmes activities are planned
in advance.
 A budget should ensure the most effective use of the available
financial and nonfinancial resources
Contd…

 Budgeting should aim at ensuring coordination

among the various departments, establishing a
frame of reference for managerial decisions
and providing criteria for evaluating managerial
performance.
 A budget should not adopt too high or too low
estimates.
 A budget is prepared under the leadership of
the administrator .
Contd….

 While working on the budget a review of the

performance of the previous year is necessary
and an evaluation of its adequacy both in
quantity and quality.
 While developing a budget , provision should be
made for its flexibility.
ESSENTIAL REQUIREMENTS FOR BUDGET
PREPARATION:
• Sound forecasting
• An adequate and well-conceived accountings system
• A well devised cost accounting system
• A soundly constructed organization with fixed
• lines of responsibility.
• Statistical information’s
• Support of top management
• Length of budget period.
BUDGETTING PROCESS:

1.Assessment:

• Need identification
• Operating expenses
• Prerequisites
• Revenue
2.PLANNING:

• Time period.
• Review previous year planning.
• Expenditure,debits,credits,revenues.
• Budget committee.
• Budget appropriation, actual expenditure during the year.
3.IMPLEMENTATION:
• Ongoing monitoring and analysis occur to avoid
inadequate or excess funds at the end of fiscal year.
• Each unit manager is accountable for budget deviations
in their unit. If a major change in the budget is indicated,
the entire budgeting process must be repeated.
• Top-level managers must watch for and correct unrealistic
budget projection before they are implemented.
4.Evaluation:

• This is last step. The budget must be reviewed

periodically and modified as needed
throughout the fiscal year.
BUDGET COMMITTEE:

The budget committee generally consists of a representative

cross section of the major functional areas or divisions within
the institution, with the designated budget director usually
serving as the chairperson.
• Director of Nursing
• Director of Human Resources
• Director of Material Management
• Director of Engineering and Plant Operations
• Chief of Medical Staff
• Chief Executive Officer, Chief Operating Officer, and/or chief
Financial Officer
BUDGETING FOR NURSING INSTITUTIONS:

• School/college of nursing should have a separate

budget, principal in charge of the school of nursing
should be drawing the budget .(as per government rules
regulations and as seemed necessary for running an
educational institutions.)
• Both the school/college and hospital should have
separate budget. The budget for the school or college is
annually planned by the nursing director ,principal and
general manager and approved by the managing
director.
STEPS IN BUDGETING FOR COLLEGE OF NURSING:
Contd…
BUDGET PROPOSAL FOR NURSING EDUCATION
INSTITUTION:
In general, the items which are budgeted for the
colleges/schools of nursing are;
 Salaries for professional, Clerical and Domestic staffs and
drives
 Stipends for the students.
 New equipment’s and supplies.
 Office supplies include stationery and postage.
 Maintenance of transport and cost of petrol.
 Maintenance of library or setting up a new library.
 Contingency fund for educational tours, professional
activities, capping and graduation ceremonies, prizes,
entertainments etc.
TYPES OF BUDGET IN NURSING COLLEGE;
Revenue:
 College fees( from students)
 Fixed deposits
 Donation(trustees)

Expenditure:
Guest lecturers
Staff salary
University payment
Workshop or conferences
Maintenance
 Recurring Expenditure Non Recurring
Expenditure

• Salary • Building
• Guest relations • Furniture
• Library books & • Lab Equipments
• Maintenance • Vehicles
• Bus Maintenance • Miscellaneous
• Electricity
• Water
• Telephone
• Journals & Subscription
 Recurring Non Recurring
• University fees Affiliation
• Clinical Fee
• Sports & Seminars
• Building & Ground
• Maintenance
• INC & SNC Fees
• Lab consumables
• Stationary
Sample Budget for College of Nursing
PROBLEMS IN BUDGETING:

• Lack of specific goals and objectives

• Lack of training and motivation.
• Departmental goals may be at variance with the
cooperate goals.
• Allocation of funds
• Short term vs. Long term planning
ROLES OF ADMINISTRATOR IN BUDGETING:

 VISIONARY
 PLANNER
 DEMONSTRATOR
 ANTICIPATOR
 ROLE MODEL
 COMMANDOR
 FACILITATOR
THE RESPONSIBILITIES OF PRINCIPAL /NURSING
ADMINISTRATOR:

• Participation in planning budget.

• Consult and take assistance of his / her subordinates.
• Request sufficient funds.
• Submit budget request with justification with proposed
expenditure.
• When the budget is allotted, the administrator should
support the budget.
• Since the Nurse Administrator who is responsible for
budget, she / he should cover the routine budget control.
References
1. Jogindra Vati (2013). Principles & practice of nursing
management and administration, I ed., New Delhi,
Jaypee Brothers Medical publishes (P) Ltd.

2. Marquis, B. L., & Huston C. J. (2009). Leadership roles

and management functions in nursing: Theory and
application (6th ed.). Philadelphia: Wolters Kluwer Health.

3.Bhaskara Raj e, Bhaskar nima,2013,textbook of nursing

education, 1st edition ,EMMESS medical publishers,
Bangalore.

4.www.science direct.com