A nurse manager is responsible for overseeing monthly budget amounts for the unit, a duty that not only entails personnel but often also includes evaluating equipment and supply needs and expenditures. The manager may test new products and/or oversee demonstrations. A nurse manager will report to budget meetings with other department managers to share information, exchange ideas and engage in problem-solving for the health care facility.

This week you are being supplied a budget report showing projected expenses and actual expenses for the past two years. You are asked to present the report during this months budget meeting. After reviewing the budget report, write a description of what you would report at the meeting to explain the report and your plan of action for the following year. Use your text book to help guide you in developing your plan of action.
The image included is the \”budget report\” the assignment is referencing. Also please use these sources as the references in place of the text book.  Budget Analysis Discussion Paper

Budget Analysis

The nursing unit with 20 staffed beds presents its expense budget variance for the month of June 2013, as well as comparing year-to-date budgets for 2012 and 2013. The document compared the actual expenses incurred by the unit against the budgeted expenses thereby allowing for the reasons for the variance to be interpreted. The basis of the variance analysis is the different between the predetermined budget measure and actual expenses thereby helping in understanding what is happening to the nursing unit at a glance (Penner, 2013). The variance is presented in two categories. Firstly, positive/favorable variance in which the actual expense is less than the budget measure it is compared to, and has the expense coming in lower than planned. Secondly, negative/unfavorable variance in which the actual expense is more than the budget measure it is compared to, and has the expense coming in higher than planned. As a result, the expense budget variance explores the changes in expenses between what was planned and actual performance (Bateman, 2013).

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The first item is the patient days in which the budgeted patient days was 360 and yet the actual days was 347, with a negative variance of 13. This is an unfavorable variance, and an indication that the expense is higher than planned. The second item is the productive personnel expense that was budgeted for $200,000 and yet the actual productive expense was $220,000, with a negative variance of $20,000. This is an unfavorable variance indicating that productive expense was higher than planned. The third item is the non-productive personnel expense that was budgeted for $50,000 and yet the actual productive expense was $53,000, with a negative variance of $3,000. This is an unfavorable variance indicating that non-productive expense was higher than planned. The fourth item is the total personnel expense that was budgeted for $250,000 and yet the actual total personnel expense was $273,000, with a negative variance of $23,000. This is an unfavorable variance indicating that total personnel expense was higher than planned. The fifth item is the supplies expense that was budgeted for $25,000 and yet the actual supplies expense was $26,000, with a negative variance of $1,000. This is an unfavorable variance indicating that supplies expense was higher than planned. The sixth item is the overhead expense that was budgeted for $10,000 and yet the actual productive expense was $10,000, with no variance. This is zero variance indicating that overhead expense was as planned. The seventh item is the total non-personnel expense that was budgeted for $35,000 and yet the actual productive expense was $36,000, with a negative variance of $1,000. This is an unfavorable variance indicating that non-personnel expense was higher than planned.

Overall, a review of the total expenses reveal that the budgeted expense was $285,000 and yet the actual expense was $309,000, indicating a negative variance of $24,000. The nursing unique is spending more money than was planned and this has negative implications for its profit margins. With the higher actual expenses than planned, the unit would report lower profits if the incomes remain the same. To address the negative variance in expenses, there is a need to target the high negative variance items, specifically the total productive personnel expenses as it reports the most significant variance at $20,000. This would involve controlling the payroll to include bonuses, contributions to pension, paid time off, holiday pay, overtime pay, differential pay, base wages, insurance, further education, and more (Waxman, 2013).

References

Bateman, N. (2013). The Business of Nurse Management: A Toolkit for Success. Springer Publishing Company, LLC.

Penner, S. (2013). Economics and Financial Management for Nurses and Nurse Leaders (2^nd ed.). Springer Publishing Company, LLC.

Waxman, K. (Ed.) (2013). Financial and Business Management for the Doctor of Nursing Practice. Springer Publishing Company, LLC.  Budget Analysis Discussion Paper