A budget is vital to the continued success of any organization or department; the creation of a budget allows for a review of what needs funding, how much funding is available, and what can be accomplished with the available funds in order to ensure the continued operation of the organization and its subsequent departments (Abor, 2016). The purpose of this budget development project is to put oneself in the position of a nurse executive in the cardiac unit at SLMC, a fictitious organization. The budget must be analyzed and recommendations must be made in order to improve the development of the budget, demonstrating that not only the knowledge of how to create a budget has been retained but that an awareness of the different strategies to be employed in budget development and improvement is present.

There are five primary steps involved in the development of a budget for any organization or department (Healthcare Financial Management Association, 2016; Kaplan & Witkowski, 2014; Miller, Allen, Schnittger, & Hackman, 2013; Polanco & Summers, 2016). In order to create a budget, a team must be assembled; a budget calendar should be created; preparation should be completed for the creation of the budget, including areas that will need funding and total funding available; the budget should be created; and, in order to ensure that there are no issues with future budgeting, the budget should be monitored to ensure that it is falling within reasonable bounds, and no overspending is occurring (Healthcare Financial Management Association, 2016; Kaplan & Witkowski, 2014; Miller et al., 2013; Polanco & Summers, 2016). Taking this a step further and reviewing the subcomponents, during budget creation the number of hours per patient per day on the cardiac unit should be calculated for the year, the census for the expected year should be identified, and this information should be used to calculate the number of full time personnel needed. The number of positions by type and shift should be identified, and the number of fixed staff should be added in and converted to a total number of full time positions. This information will allow for the identification of labor costs, which can then be used to prepare a personnel costs budget, including hourly rates, shift and weekend differentials, overtime hours, and benefits.

The proposed salary budget for the cardiac unit at SLMC looks at the total care hours required for the year, the hours of care per patient, per day, and the anticipated number of individuals to pass through the cardiac care unit in order to make a determination of the specific number of full time equivalent positions necessary, including the type of staff, the number of staff per shift, and the fixed staff on unit. In spite of the inclusion of this information, it does not provide a total budget for the cardiac unit at SLMC, making it ineffective as a proposed salary budget, given the lack of necessary pertinent information.

In order to develop a budget for the cardiac care unit at SLMC, additional steps would need to be taken, and additional information would be necessary. The issue arises from the fact that the individual who created the proposed budget did not have all of the information necessary to complete only a salary budget, much less a budget for the whole of the cardiac care unit. In order to improve the development of this budget and increase the likelihood of the budget being accepted by the hospital administration, further information is needed. To start, a budgetary committee would need to be created (Healthcare Financial Management Association, 2016; Kaplan & Witkowski, 2014; Miller et al., 2013; Polanco & Summers, 2016). This committee should consist of at least one registered nurse (RN) and one member of human resources (HR). The RN will have the knowledge of the requisite number of staff needed, both minimum and ideal numbers in order to provide the direct personnel labor costs. The member of HR will have the knowledge necessary of shift differentials, weekend differentials, overtime laws and hospital policies, and the total cost of benefits for each person based on position and years of experience. Between the two individuals, a solid budget could be created for the salary. While this strategy may seem overly simple, it is because of its simplicity that it is effective. Without the right knowledge and the right skillset, something that could easily be accomplished can turn into a debacle quickly. The creation of the right team will go a long way toward rectifying the current issues with the sample budget.

The extant body of literature shows that the main reason that issues arise within budgeting is due to a lack of cohesion throughout the process; this can stem from the lack of appropriate information, the lack of planning, and the lack of an appropriate means to address the matter (Healthcare Financial Management Association, 2016; Kaplan & Witkowski, 2014; Miller et al., 2013; Polanco & Summers, 2016). Through appropriate planning, the requisite information, and proper projection of needs, however, it is possible to create a budget that not only is tailored to the department or organization to which it is applicable, but one that is easy to follow up on and easy to stay within the confines of (Healthcare Financial Management Association, 2016; Kaplan & Witkowski, 2014; Miller et al., 2013; Polanco & Summers, 2016). Failure to have the appropriate components, however, can result in a failure to budget appropriately (Healthcare Financial Management Association, 2016; Kaplan & Witkowski, 2014; Miller et al., 2013; Polanco & Summers, 2016).