The document discusses the management process of budgeting in nursing organizations. It defines a budget as an operational plan for a defined period, usually a year, expressed in financial terms based on expected income and expenditures. The main points are: 1) Budgets serve as a guide for action, help with decision making, and facilitate coordination between departments to achieve operational objectives. 2) The budgeting process involves determining requirements, developing financial plans, analyzing and controlling operations, and periodically reviewing and revising plans. 3) Budgets have advantages like planning activities in advance, establishing performance standards, and revealing weaknesses; but also limitations like sometimes being too rigid or used punitively.

1. Vidyakirana college of
Nursing Bangalore
Subject- management of nursing
Topic- management process
Presented by – Mrs. sulekha Dilliwar

2. Introduction of budget
• The word budget means a leather bag or sachet to carry
official paper. The word budget derived from the old English
word “Budgette” means a sack or pouch which the
chancellor of the exchequer used to take out his paper for
laying before the parliament, the government, financial
scheme for the ensuring year.
• “now the budget term refer to financial paper”

3. • It is the responsibility of every country to look into the
source of income over expenditure on various aspect of
health which include education, infrastructure and
organization of health care services.

4. Definition
• Budget is an operational plan for a define period usually a
year expressed in financial term and based on expected
income and expenditure

5. Purpose of budget
• It is financial planning and decision making of organization
• It is quantitative plan of organization.
• Budget clearly recognize controllable and uncontrollable cost
area
• Budget is fulfill the need, objective and polices of
organization
• It provide feedback of utilization in the organization

6. • It help to identify the problem and solve the problem in an
organization
• It evaluate managerial performance in the organization

7. Importance of budget
• Budget serve as a guide for action in the organization
• Budget help one to weigh the value and make decision when
necessary, as to weather one is of a greater value in the
programme than the other
• Budget is needed for planning for future course of action and
have to control over all activities in the organization
• Budget facilities co-ordination operation of various
department and section for realizing operational objective.

8. Step in budgeting process
• Determine the requirement- input from all level, and
distribute based on priority.
• Develop plan- budget for 12 month is set
• Analyze and control the operation – continuous monitoring
is essential
• Review the plan- periodic revision and modification

9. Feature of
budget

10. • It should be flexible
• It should be produce by joint venture
• It should synthesis of past, present and future
• It should be in the from of statistical slandered laide down in
specific numerical term.
• It should have support of top management through out the
period of its planning and supplementation.

12. Incremental budget
• is one based on estimated change in present operation + a
percentage increase for inflation all of which is added to
previous year budget.

13. Flexible budget
• It consist of several financial plan, each for
a different level of programme activity, it is
based on the fact, the operating condition
rarely conform to expectation.

14. Roll over budget
• Is one that forecast programme, revenues and expenses for a
period greater than a year, to accommodate programme
that are larger than annual budget cycle

15. Open ended budget
• Is a financial plan in which each operating manager present a
single cost estimate for what is considered optimal activity
level of each programme in the unit, without indicating how
the budget should scale.

16. Fixed ceiling
budget
• is a financial
plan in which
the upper most
spending limit
is set by the
top executive
the unit and
divisional
manager
develop budget
proposal for
their area of
responsibility.

17. Performance
budget
• Is based on function
which allocate
function, not division
e.g. nursing research,
in service education
etc.

18. Programme budget
Is one the where cost are computed for a total
programme e.g.MCH, RCH programme

19. • Is one budget that
aim at securing the
economical
manufacturing of
product and
maximizing the
utilization of
production facilities.

20. Revenue and expense budget
• Is expressed in financial term and take the nature of a
perform income statement of future, it may be prepared in
form or in an abstract statement showing the items of profit
and loss under classified heading

21. Sun set budget
• Is design to “self destruct” with in
a prescribed time period to ensure
the cessation of spend in by a
predetermined date.

22. Sale value
• is the starting point in a
budgetary programme,
since sale are basic
activities which give shape
to all other activities

23. Principle of budget

24. • Budget should provide sound financial management by
focusing on the requirement of the organization.
• Budget require that a programme activities planned in
advance
• Budget should focus on objective and policies of organization
• Setting budget target, require an adequate cheeks and
balance against the adoption of too high or too low estimate.

25. • Budget period should be appropriate to the nature of
business or service and to type of budget
• Budget should ensure the most effective use of scarce
financial and non financial resources
• Budget should include co ordination effort of various
department establishing a frame of reference for managerial
decision and providing a criterion for evaluating managerial
performance.

26. Advantage of budget
• Budget plan for detailed programme activity
• They help fix accountability by assignment of responsibility
and authority
• They state goals for all units, offer a standard of performance
and stress the continuous nature of planning and control
process
• It encourage the manager to make a careful analysis of
operation and to base decision on careful consideration.

27. • Weakness in the organization can be revealed
• Staffing equipment and supply needs can be projected an
waste minimized
• Financial matters can be handle in orderly fashion
• Agency activities can be coordinated and balanced
• Budget help in just measurement of performance
• Budgeting process help management learn from past
experience

28. • Budget help the new people and lower level manager where
the organization is going where they fit in the organization
• Budget improve communication

29. Limitation
Budget often too rigid and restrictive.
Budget used to evaluate the performance and
result but success are not thoroughly investigated
Budget may be used punitively
Budget goals may be conceived as too high

30. Disadvantage
of budget
It convents all aspect of organizational
performance into monetary values for a
single comparable unit of measurement
The budget mat become on end in itself
instead of the means to on end
Budgetary goals may suppress agency
goal and gain autocratic control of the
organization.

31. Con…
• There is danger of over budgeting, it become meaningless
and expensive
• Forecasting is required but uncertain
• Skill and experience are required for successful
• Its planning is time consuming and expensive