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Fiscal planning in nursing management

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Fiscal planning in nursing management

  1. 1. Fiscal PlanningBY P.N.VIJI, M.Sc(N) LECTURER
  2. 2. Steps Plan Non-Plan Zero Budgeting Mid- term appraisal Capital & revenue
  3. 3. Limited role in determining resource allocation. Allowed only limited input Nursing as Non Income producing service Overview of fiscal planning in nursing management
  4. 4. Nursing budgets generally account for the greatest share of the total expenses in healthcare institutions, participation in fiscal planning has become a fundamental and powerful tool for nursing Nursing budgets generally account for the greatest share of the total expenses in healthcare institutions, participation in fiscal planning has become a fundamental and powerful tool for nursing In 21st century….
  5. 5. Features of fiscal planning… Most direct control or influence financial elements Receive regular data reports Reflects the philosophy, goals, and objectives of the organization Accountable for the financial results of the operating unit Responsibility accounting Active participation in unit budgeting
  6. 6. Characteristics Proactive Flexible Clearly stated in measurable terms Short- and long-term planning Involve as many people as feasible in the budgetary process Requires vision, creativity Thorough knowledge of the political, social, and economic forces that shape health care
  7. 7. Evaluation Implementation Develop a plan Assess what needs to be covered STEPS IN FISCAL PLANNING
  8. 8. Integrating Leadership Roles And Management Functions In Fiscal Planning Understand fiscal terminology Aware of budgetary responsibilities Maintaining cost effective unit sensitivity to the organization’s economic, social, and legislative climate is a high-level management function Skillful in the monitoring aspects of budget control
  9. 9. Leadership skills…… Flexibility Creativity Vision regarding future needs Anticipate budget constraints Act proactively Identifying alternatives Cost containment does not jeopardize patient safety
  10. 10. Components of expenditure Plan Non- plan
  11. 11. Received funds Plan funds Non plan funds Extra budgetary resources
  12. 12. Zero based budgeting A method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a "zero base" and every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one.
  13. 13. Advantages of zero based budgeting Find cost Effective ways Detects Inflated budgets Useful for service departments Efficient allocation of resources Increases Staff motivation Eliminate Wasteful operation Identify opportunities Identify mission Increases Communication & coordination
  14. 14. Disadvantages of Zero based budgeting Difficult to define decision units Forced to justify every detail Necessary to train managers Compressing may remove critically important details Honesty of the managers must be reliable & uniform
  15. 15. Implementation of Zero based budgeting The zero-based budgeting system puts the burden of proof on the manager, and demands that each manager justify the entire budget in detail and prove why he or she should spend the organization's money in the manner proposed. A "decision package“ must be developed by each manager for every project or activity, which includes an analysis of cost, purpose, alternative courses of action, measures of performance, consequences of not performing the activity, and the benefits.
  16. 16. Each budget start with an assumed value of 0. Each budgeted item is started at last years level, and next period’s level is planned as an increment to that level Zero based budgeting Incremental budgeting Vs
  17. 17. A combination of zero-based budgets with rolling budgets or some other form of budgeting Dysfunctional behavior in subordinates Significant levels of job related tensions Adverse effects on peer and subordinate – superior relationship Behavioral impacts of Zero Based budgeting
  18. 18. Mid term appraisal MTA — which is an exercise carried out during the middle of a Plan period to assess the direction in which the Plan is moving and to take corrective action wherever required — is slated to be much more than a review of how much money is going into various schemes and projects .
  19. 19. Capital budget Capital payments consist of capital expenditure on acquisition of assets like land, buildings, machinery, equipment, as also investments in shares, etc., and loans and advances granted by Central Government to State and Union Territory Governments, Government companies, Corporations and other parties. Capital Budget also incorporates transactions in the Public Account.
  20. 20. Revenue budget The revenue budget consists of revenue receipts of the government (revenues from tax and other sources) and the expenditure met from these revenues.
  21. 21. Hierarchy Of Budgets
  22. 22. Capital assets vehiclesvehiclesMachinery & productio n equipment Machinery & productio n equipment Store equipment & furnishing Store equipment & furnishing Lab equipment Lab equipment Office furniture & office equipment Office furniture & office equipment BuildingsBuildings Large IT systems Large IT systems
  23. 23. Operatin g budget Operatin g budget Employe e salaries Employe e salaries Utilities cost Utilities cost Travel & training expenses Travel & training expenses Telephon e & internet services Telephon e & internet services Marketin g communi cation Marketin g communi cation Outside consultant fees Outside consultant fees
  24. 24. India union budget • Revenue Budget: The revenue budget primarily comprises Government revenue receipts like tax and expenditure met from the revenue. The tax revenues principally constitute yields of taxes and other duties imposed by the Government of India. • Capital Budget: The capital budget primarily comprises capital receipts and payments.
  25. 25. Revenue Deficit Revenue deficit occurs when the actual amount of expenditure and actual amount of received revenue do not tally with the anticipated expenditure and revenue figures
  26. 26. Recommendations and Advice by Experts • precautionary measures to reduce revenue deficit level not less than 50% from the current level • Recommends lowering the ratio of revenue deficit to fiscal deficit below 50 percent.

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