Assignment Task: Budget Preparations and Analysis
As the HIM department director, a typical task is completing a proposed budget for the next fiscal year, which runs from January to December, for your department. Tools provided include the budget from the current year (labeled as FY:A72), which contains three workbooks: Current Expenses, Salary Worksheet and Monthly Expenses. Please label the Proposed budget that you create as FY:B83. To complete the proposed budget for the upcoming year, you will use provided budget FY:A72 and the budget projections for future costs for FY:B83 which are detailed in Part A.
PART 1: Action Steps for the FY:B83 Proposed Budget are listed below, One through Five
Task 1:
1. Project a salary increase of 3% for each staff member. (Salary subaccount, Salary Worksheet.)
2. Based on 2080 hours working a year, what is your department's average hourly rate? Record and label this on the Salary worksheet.
3. Project a supply increase of 5%. (Supply Subaccount).
4. Project a 3% increase in all other subaccounts, except those detailed below in 2 through 5.
Task 2:
To project next year's budget successfully, please carefully evaluate education and professional dues. It is the policy of your facility to
1. Pay the coder active member CCS annual dues/maintenance. Each employed coder is at least a member with CCA credential. (Professional Dues Subaccount)
2. Pay the Director's active member RHIA annual AHIMA dues. (Professional Dues Subaccount)
3. Reimburse any CCA credentialed coder who successfully passes the CCS examination during the budget year. Two of your current CCA coders plan to take the CCS exam in the next budget year. (Education Subaccount)
4. Check AHIMA for the dues/maintenance/testing costs and calculate appropriately in both Education and Professional Dues subaccounts.
Task 3:
1. Budget to attend the AHIMA convention (as the department Director).
2. Add a 4th, separate workbook to your excel spreadsheet labeled 'AAM' for the Director. (Annual AHIMA Meeting =AAM).
3. In the AAM workbook, use the current year's advanced registration AHIMA Member cost for the full convention (cost available on AHIMA.org - search 'convention'). (Education Subaccount)
4. To ensure comparable data, estimate $450 roundtrip airfare, $155 per night at hotel, $50 max daily food plus convention registration fee for an AHIMA member. Calculate appropriately in both Education and Travel Subaccounts. (Travel subaccount should include: Flight, hotel and traveling daily food costs).
Task 4:
1. The annual budget also includes a host lunch for your staff during HIM week in November.
2. You have 21 employees (which includes you, the Director) in the department and plan to spend $10.00 per person on the luncheon.
3. Calculate appropriately for the Food subaccount.
Task 5:
1. There are 10 total coders and each one will attend 3 online coding webinars through the contracted CodingUp2Date Vendor.
2. Each webinar is $55 per attendee when ten members attend.
3. The director, DRG coordinator and CDI specialist typically attends these webinars to secure additional education hours.
4. Calculate appropriately for the Education subaccount.
Note: Total up each subaccount on the FY:B83 Current Expense Worksheet to complete the projected Fiscal Year budget for the upcoming year. Remember to carry over your FY:B83 totals to the Monthly Expenses Spreadsheet and complete calculations there for submission. When you finish PART A, save your Excel Spreadsheet and remember to complete PART B as well for submission in Module 11. Both parts are due in Module 11.
PART B: Variance Reporting, Variance Table
For the final part of the budget assignment, you are the director and you are in budget year FY:B83 which means you are currently functioning under the budget constraints for each subaccount that you prepared earlier. At six months into the Proposed (FY:B83) year and using the FY:B83 budget, the Chief Financial Officer (CFO) holds a semiannual budget reconciliation workgroup meeting. The CFO has been asked to reduce FY:B83 expenditures by 4.5% across the board for all departments and to achieve this expenditure goal, the CFO has asked each of you to prepare a Variance Report. A variance reports is the first step in reducing expenditures.
Follow steps ONE through FIVE below to complete and submit the Variance Report.
Task 1: Using the FY:B83 budget worksheet which you prepared, divide each subaccount value found in the FY:B83 Current Expenses workbook in half (6 months of the year) and place the result into the Variance Worksheet (below) column labeled"6 Mo Budget".
Task 2: Note that some of the rows are already marked for you as 'favorable' in the Outcome column - this means you are on budget in these subaccounts. There is no variance to document because the 6 month budget matches the Actual budget.
Task 3: You have several variances to report and record in the report. Use the additional historical information below to finish your variance report table. Take into account the following which occurred and will impact how you complete the variance report.
a. Began a scanning project but the primary scanner broke down and the repair was not covered under Maintenance. The new part cost $235 plus the repair was $1,565.
b. Began electronic processing of ROI requests instead of using paper which resulted in $75 less paper each month to date and a postage savings of $120 over the 1st half of the year.
c. Your DRG Coordinator retired at the end of FY:A72 and the replacement is an RHIA with 10 years' experience who started in January. Salary is 10% greater than the retiring DRG coordinator
d. In March, you hosted anunplanned physician Evaluation and Management(E&M) coding training session with luncheon that cost $200.
Task 4: The variance column should be marked with (+) for over spending and (-) for under spending along with the corresponding dollar amount. As an example, postage variance from step THREE b has been completed in the variance table below.
Task 5: When the report is finished, every box will have an entry. The final column, Outcome, should have a Favorable or Unfavorable (over budget)1 result documented for each row.
The completed Variance Report table will be submitted with the other budget documents for grading. Label it 'Variance Report'. Be sure that both PART A and PART B are both completed for your Module 11 submission on Budget Preparation.
The cost of the AHIMA convention:
Use your course textbook to obtain a clear understanding of the budgeting process and know that this assignment asks that you 'forecast' a budget for the UPCOMING year - next year. This is a forecast of the money your department will spend in the upcoming year. Categories listed in the budget are referred to as 'subaccounts', for example you will note that there are subaccounts for salary, supplies and education.
A) Create and include an Excel spreadsheet for your FY:B83 budget for the upcoming year. Include 4 worksheet tabs for your proposed budget. Worksheets include:
i) Proposed Budget Expenses, Proposed Salary Worksheet and Proposed Monthly Expenses.
ii) Create and include the AAM worksheet described in PART:A
B) Create and include a Variance Report table for FY:B83 using the Variance Report instructions found in PART:B of this assignment.
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Attachment:- Budget Preparations and Analysis.rar