Project: Budget Preparation
This project uses a Health Information Management Department as an example; however, for those students in a different discipline the process is exactly the same. You can take this experience and apply it after graduation to budgeting for a radiology, laboratory, physician/dental/ophthalmology office, registration, patient accounts, etc. Finding the details for membership dues, continuing education, conference costs etc. follows the same process.
You are submitting this budget with details and justifications to the facility Chief Financial Officer (CFO).
You have been assigned the task of completing the proposed budget for the next fiscal year for your Department. The fiscal year is from January – December. As a tool, you have the budget from the previous year, the salary worksheet and the monthly expenses report. You will be using the historical data provided as well as considering your projections for future costs.
- You have been directed by the CFO’s office to project a maximum 5% salary increase.
- You have been directed to project an increase in supplies of 7%.
- You have been directed to project a 5% increase in all other areas, except those discussed below.
You must also evaluate travel expenses, membership and dues. It is the policy of your facility to pay for your American Health Information Management Association (AHIMA) dues, and to reimburse any coder who successfully passes certification examination. You know that two of your coders plan to take the Certified Coding Specialist exam next year. (Check AHIMA for these costs)
You need to budget to attend the AHIMA convention (use current year costs). Be sure to estimate airfare, hotels, food, and registration fees for a 4 day convention. Attach appropriate document that details estimated expenses. (Yes, check actual airfare from your home city to the actual location (this year, Atlanta, GA), and the cost of registration. Estimate $180.00 a night for hotel and $35.00 a day for food). For purposes of our project COVID has not cancelled in-person events.
You typically host lunch for your staff during Health Information Management week in March. You have 12 employees in your department and you usually plan to spend $10.00 per person.
You need to budget for education. You know that you must provide education for your coders to include, at a minimum, 10 CEU’s a year to maintain their coding certification and the hospital provides that education. (check https://my.ahima.org/store/ and check the price of Webinars. Budget enough to cover the cost for approximately 10 hours)
You have also been advised to make any capital requests at this time. You need a new scanner to scan some departmental records which are not fully electronic yet – needs to be professional model to take the workload. (check the internet, choose a model, see if you can find multiple sites with the same product and compare pricing, attach info to your budget.)
- Based on 2080 hours working a year, what is your department’s average hourly rate?
- What is the total average monthly expense for your Department each month?
(total budget / 365 * days in month)
Create a budget for the upcoming year and justify all of your calculations and recommendations.
1. You will submit an excel spreadsheet for your proposed budget (you can use the previous year’s file as a template):
Spreadsheet Tab One: listing salaries
Spreadsheet Tab Two: a listing that is broken down by month
Spreadsheet Tab Three: an annual monthly budget (see example of previous year)
2. You will submit a Word Document which:
- justifies your expenses for every category in your budget.
- identifies the equipment you would like to purchase, and a justification for that equipment. Attach any product description which would help support your recommendation.