Difference Between Operating, Project, & Capital Budget

Provide Correct Revenue & Expenses

Analysis of the fiscal year 2021 budget revealed a spending cap of $50 million for inpatient care revenues. With expenses totaling $23,123,516 million in the latter half of the fiscal year, projected actuals for 2021 are estimated at $46,247,032. Surplus funds can be utilized for staffing, employee education, equipment procurement, or other initiatives aimed at enhancing patient care (Vila Health Developing an Operating Budget, n.d.).

Estimate the Correct Revenue & Expenses

Current budget calculations indicate a surplus of $3,966,130, exceeding the operational budget of $40,895,000 with an actual amount of $44,861,130.

Balanced Budget for the Next Fiscal Year

While initially proposing a static budget or a 5% reduction, calculations for the upcoming fiscal year involved applying a 5% reduction to all current-year budget allocations. Approval of the revised budget is crucial to maintaining operational sustainability.

Conclusion

Budgeting is imperative for the growth and financial stability of healthcare facilities. Whether operating within an operational, project, or capital budget framework, effective budget management ensures alignment with expenditure and revenue goals, a responsibility integral to administrators’ roles.

References

Armitage, H. M., Lane, D., & Webb, A. (2020). Budget development and use in small and medium-sized enterprises: A field investigation. Accounting Perspectives, 19(3), 205-240. https://doi.org/10.1111/1911-3838.12231

Finkler, S. A., Smith, D. L., & Calabrese, T. D. (2020). Financial management for public, health, and not-for-profit organizations (6th ed.). CQ Press.

Glushchenko, A. V., Kucherova, E. P., Mosolova, N. I., & Mosolova, D. A. (2021). Algorithm of forming the operating budget of integrated agro-formations in the south of Russia. IOP Conference Series. Earth and Environmental Science, 839(3), 32014. https://doi.org/10.1088/1755-1315/839/3/032014