replies one answer total 2

Leebeth (week4 initial response)

What is the capital Budget? What is the threshold dollar amount at your facility that determines when an item is considered capital?

              Capital budget is considered for long term investments that are often high cost. Capital budget may focus on items as large and complex as the construction of a new building, with millions of dollars of expense and decades of useful life (Penner, 2017). The individual hospitals within my organization would $5000 to be capital. However, at a national level our threshold is much higher. The most widespread approach in financial theory and business practice is to define in detail the revenues and expenditures related to the project, select a useful life or time horizon, project the expected cash flows and, given a discount interest rate that reflects the cost of capital and risk (Ullah et al., 2020).

What components determine the operating budget?

              Operating budgets are prepared for the fiscal year or 12-month time period for the organization budget and other financial reporting. Budgets are often reported on a monthly and quarterly schedule. The components that determine the operating budget consist of capacity, utilization, performance, and financial indicators (Penner, 2017). A lot of healthcare organizations began a new fiscal year in July. However, I’m sure with the lack of staffing within the facility the operating budget has been tremendously impacted. Travel nursing covers for overtime, not regular time. Comparisons of core staff pay rates to travel nurse bill rates should be based on the fact that travel nurse utilization serves as a replacement for the hours that would be worked as overtime by core nursing staff (Faller et al., 2018).

What components are involved in a salary budget?

              Money designated over a specific amount of time, with which to pay salaries. When structure adjustments or individual employee adjustments are being planned, the salary budget must be taken into consideration. Although few nurses may ever see the facility’s cash flow budget, it serves to ensure adequate financing to meet payroll and other financial obligations that occur as part of the day to day operations of health care settings (Penner, 2017).

References

Faller, M., Dent, B., & Gogek, J. (2018). The ROI of Travel Nursing: A Full-Cost Comparison of Core Staff Pay Rates to Travel Nurse Bill Rates. Nursing Economics, 36(4), 177-181. https://ju.idm.oclc.org/login?url=https://www.proquest.com/scholarly-journals/roi-travel-nursing-full-cost-comparison-core/docview/2096469984/se-2?accountid=28468

Penner, S. J. (2017). Economics and financial management for nurses and nurse    leaders (3rd ed.). Springer Publishing Company.

Ullah, Z., Rehman, S. U., & Khan, M. N. (2020). Overconfidence and Optimism in Capital Budget Decisions: Corporate Finance from a Behavioral Point of View. City University Research Journal, 10(2), 253-275. https://ju.idm.oclc.org/login?url=https://www.proquest.com/scholarly-journals/overconfidence-optimism-capital-budget-decisions/docview/2431842153/se-2?accountid=28468

Alexie (week4 initial response)

What is the capital budget? What is the threshold dollar amount at your facility that determines when an item is considered capital?

Capital budget is a budget for long-term investments that are often high cost (Penner, S., 2017), this can be considered when an institution is planning long a long-term investment, like creating outpatient clinic, expanding units and more.  In my organization the police states that they consider the dollar amount is $100,000 and have a useful life of 2 years or more, have been acquired or constructed with intention to be used by the organization.

What components determine the operating budget? 

The operating budget for the VHA is $269.9 billion for the fiscal year 2022, it includes $117.2 billion an increase of $9.7 billion or 9% for healthcare, national cemeteries, and benefits. Another $157.7 and increase of $14.9 or 10.2 % inclusive for readjustment benefits, compensation & pension, housing, and insurance.

What components are involved in a salary budget?

In my organization some components that are involved in the salary budget is cost-of-living adjustments (maximum of 3% per year) may be budgeted in out years (year 2, year 3, year 4) of a project for all current VA salaried personnel to address cost of living increases and personnel actions, and all differences in the operating expenses between years need to be fully justified.

Reference

Penner, S., (2017).  Economics and Financial Management for Nurses and Nurse Leaders. (3rd ed). Springer Publishing Company

Budget, O. O. (n.d.-b). Va.gov | veterans affairs. https://www.va.gov/budget/products.asp