Belt-Tightening–More Budget Adjustments

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Belt-Tightening–More Budget Adjustments

Category: Case Study

Subcategory: Nutrition and Diet

Level: College

Pages: 2

Words: 550

Calculate dollar impact
Total Amount 454,401.53
Fringe Benefits 131,776.44
Vocation Relief Coverage 2,000.00
Sign-in Bonuses 10,000.00
Total Personnel cost $ 598,177.97
Budget Summary
Personnel Costs 598,177.97
Equipment 75,374.00
Supplies 59,719.00
Services 42,850.00
Cost Transfers 4,960.00
Total $ 781,080.97
$790,527.00 – $ 781,080.97 =$ 9,446.03
Annual savings if all hourly staff were reduced from 40 to 37.5 hours as their standard workweek
Total Amount 443,049.84
Fringe Benefits 128,484.45
Vocation Relief Coverage 2,000.00
Sign-in Bonuses 10,000.00
Total Personnel cost $ 583534.30

To get the annual savings, subtract the current personnel cost from the original cost.
Annual Savings = $ 607,624 – $ 583,534.30 = $ 24,086
Dollar impact when the pay increase and hourly staff reduction were implemented together
Total Amount 436,025.88
Fringe Benefits 126,447.51
Vocation Relief Coverage 2,000.00
Sign-in Bonuses 10,000.00
Total Personnel Budget cost $ 574,473.39

Budget Summary
Personnel Costs 574,473.39
Equipment 75,374.00
Supplies 59,719.00
Services 42,850.00
Cost Transfers 4,960.00
Total $ 757,376.39
$ 790,527.00 – $ 757,376.39 = $ 33,147.30
Note: The tables below shows how personnel costs were calculated for each question were obtained.
Relate the dynamics of the budget approval process to the development of the budget
The approval process is a bit tough. Compliance with budget process procedures is checked and justifications are also reviewed. The departmental budgets are harmonized with the master budget for the organization.The cost containment committee is also involved in the process to advise, investigate, and participate in the implementation of cost-containment measures.Managers of various departments should foster a win-win approach by showing willingness to trade off certain costs with another department, with a more pressing need.The manager is required to show optimism, best case scenario estimate, worst case scenario during the budget evaluation. The public also demands that the government take proper care of the public purse.Interestingly, the approval process can be an opportunity to take another view of how the company or department within a company is spending its money.
Introduce the budget as a special-purpose financial plan that is an essential part of the department manager’s planning function
A budget is used as a special financial planning and monitoring instrument.The budget, in its statement, shows clearly what the department intends to accomplish and the funds allocated based on the departmental objectives and functions.

Identify various types of budgets employed and the commonly encountered budget periods.
Types of budget
The revenues and expense budget
Personnel or labor budget
Production budget
Capital Equipment or improvement budget
Fixed budget
Variable budget
Step budget
Master budget
Budget Periods
Budget period can be defined in two approaches:period moving budget and milestone budgeting. Period moving budget forecast for the year is adjusted as you move through the project life cycle. Each time a period is completed, any equal time interval is added e.g. Jan-Feb-March as period 1, May-June-July as Period 2…
For milestone budgeting, the cost of the remaining subsidiary plans or projects is determined and the allocations for the next phase of the plan can be established.
The type of budget can also determine the length of time for budget period. For example, Capital equipment budget may be developed for long period of 3, 5 or 10 years
Differentiate between traditional budgeting and zero-based budgeting approaches

Traditional budgeting (incremental budgeting) is control-oriented. This approach is efficient since it is easier to determine the projected calculations. Some issues such as important changes, fluctuating priorities and demanding needs are disregarded.
Zero-based budgeting is planning oriented. It is called “zero-based” budgeting because past dollar allocations are not the basis of the forecast. Resource allocation and funding are related directly to the departmental goals as outputs of the department are assessed.

Enumerate the steps in the budget cycle
Initial preparation process
Review and approval process
Implementation phase
Audit and evaluation of the process to ensure funds are spent according to the plan
Enumerate the requirement of successful budgeting
An excellent organizational structure to ensure clear responsibilities for budget preparation and administration.
Well-defined and steady budget periods
Adequate statistical data
A reporting system that mirrors the structure of the organization
A uniform code of accounts
A regular audit system
Table 1
Wages and Salaries by Position title ( The values are in dollars($) )

  Current Base July Through March April 1 3.5% Increase New Base April 1 Through June Total for Fiscal Year
Director 75,000 56,250 2,625 77,625 19,406.25 75,656.25
Compliance Specialist 42,000 31,500 1,470 43,470 10,867.50 42,367.50
Registries Coordinator 42,000 31,500 1,470 43,470 10,867.50 42,367.50
Coder 32,000 24,000 1,120 33,120 8,280.00 32,280.00
Coder 30,000 22,500 1,050 31,050 7,762.50 30,262.50
Billing compliance specialist 29,120 21,840 1,019 30,139 7,534.80 29,374.80
Release of Information Specialist 25,000 18,750 875 25,875 6,468.75 25,218.75
Secretary 20,800 15,600 728 21,528 5,382.00 20,982.00
Medical Transcriptionist 27,040 20,280 946 27,986 6,996.60 27,276.60
Medical Transcriptionist 26,000 19,500 910 26,910 6,727.50 26,227.50
Medical Transcriptionist 22,000 16,500 770 22,770 5,692.50 22,192.50
Release of Information Clerk 18,100 13,575 634 18,734 4,683.38 18,258.38
Registries Specialist 25,000 18,750 875 25,875 6,468.75 25,218.75
Medical Record Specialist II 19,400 14,550 679 20,079 5,019.75 19,569.75
Medical Record Specialist I 17,000 12,750 595 17,595 4,398.75 17,148.75
Total Amount 454,401.53
Table 2
Wages and Salaries by Position title ( The values are in dollars($) )

  Current Base Current Base 37.5hrs July Through December January 1 5% Increase New Base January 1 Through June Total for Fiscal Year
Director 75,000 75,000 37,500 3,750 78,750 39,375.00 76,875.00
Compliance Specialist 42,000 42,000 21,000 2,100 44,100 22,050.00 43,050.00
Registries Coordinator 42,000 42,000 21,000 2,100 44,100 22,050.00 43,050.00
Coder 32,000 30,000 15,000 1,500 31,500 15,750.00 30,750.00
Coder 30,000 28,125 14,063 1,406 29,531 14,765.63 28,828.13
Billing compliance specialist 29,120 27,300 13,650 1,365 28,665 14,332.50 27,982.50
Release of Information Specialist 25,000 23,438 11,719 1,172 24,609 12,304.69 24,023.44
Secretary 20,800 19,500 9,750 975 20,475 10,237.50 19,987.50
Medical Transcriptionist 27,040 25,350 12,675 1,268 26,618 13,308.75 25,983.75
Medical Transcriptionist 26,000 24,375 12,188 1,219 25,594 12,796.88 24,984.38
Medical Transcriptionist 22,000 20,625 10,313 1,031 21,656 10,828.13 21,140.63
Release of Information Clerk 18,100 16,969 8,484 848 17,817 8,908.59 17,392.97
Registries Specialist 25,000 23,438 11,719 1,172 24,609 12,304.69 24,023.44
Medical Record Specialist II 19,400 18,188 9,094 909 19,097 9,548.44 18,642.19
Medical Record Specialist I 17,000 15,938 7,969 797 16,734 8,367.19 16,335.94
              Total Amount 443,049.84
Table 3
Wages and Salaries by position title ( The values are in dollars($) )
  Current Base Current Base 37.5hrs July Through March April 1 3.5% Increase New Base January 1 Through June Total for Fiscal Year
Director 75,000 75,000 56,250 2,625 77,625 19,406.25 75,656.25
Compliance Specialist 42,000 42,000 31,500 1,470 43,470 10,867.50 42,367.50
Registries Coordinator 42,000 42,000 31,500 1,470 43,470 10,867.50 42,367.50
Coder 32,000 30,000 22,500 1,050 31,050 7,762.50 30,262.50
Coder 30,000 28,125 21,094 984 29,109 7,277.34 28,371.09
Billing compliance specialist 29,120 27,300 20,475 956 28,256 7,063.88 27,538.88
Release of Information Specialist 25,000 23,438 17,578 820 24,258 6,064.45 23,642.58
Secretary 20,800 19,500 14,625 683 20,183 5,045.63 19,670.63
Medical Transcriptionist 27,040 25,350 19,013 887 26,237 6,559.31 25,571.81
Medical Transcriptionist 26,000 24,375 18,281 853 25,228 6,307.03 24,588.28
Medical Transcriptionist 22,000 20,625 15,469 722 21,347 5,336.72 20,805.47
Release of Information Clerk 18,100 16,969 12,727 594 17,563 4,390.66 17,117.23
Registries Specialist 25,000 23,438 17,578 820 24,258 6,064.45 23,642.58
Medical Record Specialist II 19,400 18,188 13,641 637 18,824 4,706.02 18,346.64
Medical Record Specialist I 17,000 15,938 11,953 558 16,495 4,123.83 16,076.95
Total Amount 436,025.88