Developing an Operating Budget

develop a 2-4 page review on the importance of the budgeting process to a health care
organization, as well as demonstrate an understanding regarding the differences between an operational budget
and a capital budget. Additionally, you will prepare an operational budget for the medical-surgical department at
the St. Anthony Medical Center.
Introduction
Note: This assessment uses Vila Health: Developing an Operating Budget as the context for developing your
budget. Please make sure you have reviewed this multimedia before you complete your assessment submission.
Financial management is something that touches us all. We are each responsible for our own personal and family
budgets, and many of us are also responsible for budgets at work. Regardless of your experience with financial
management, it is a critical skill to have, and it will be necessary to master this skill as you move forward in your
health care administration career. Almost all health care administrators will be responsible for a budget at some
point in their careers. Administrators must also know how to read basic financial statements and reports to assess
the performance of their organization, other organizations, or their department.
Budgeting is an important consideration in strategic planning for any health care organization. The most basic
definition of budget is a plan that identifies expected financial inputs and outputs. A budget should be closely
aligned with a strategic plan, which is a strategy used by an organization to achieve its mission. Organizations may
use different types of budgets, such as master budgets, operating budgets, revenue budgets, expense budgets,
cash budgets, and capital budgets (Finkler, Smith, & Calabrese, 2020). We will explore each at a high level.
For this assessment, you will be asked to consider the different types of budgets that are used in the health care
field. By researching other organizations that use budgets, you will apply the course materials to a real-world
situation. The assessment will further refine those skills as you navigate the St. Anthony Medical Center medicalsurgical department budget (from the Vila Health multimedia). You will prepare a paper and a basic budget to
demonstrate the knowledge that you acquired this week.
Many learners enter the field with limited exposure to finances. Depending on your current knowledge and comfort
level with the subject, it may be necessary to conduct additional research and spend extra time addressing some of
the basics. In other words, the resources in this course will help to provide a foundation for you to complete the
assessments, but it is possible that you will need to do your own research in the Capella University Library to fully
address all scoring guide criteria.
Demonstration of Proficiency
By successfully completing this assessment, you will demonstrate your proficiency in the following course
competencies and assessment criteria:
Competency 1: Explain the importance of reporting in health care.
Explain why budgets are an important part of the planning process.
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8/15/22, 12:16 PM Assessment 1 Instructions: Developing an Operating Budget &…
https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_374028_1&content_id=_11433959_1 2/3
Explain the difference between operating, project, and capital budgets.
Analyze the impact of the budget on the operations of the organization.
Competency 2: Develop a departmental budget.
Provide this year's correct revenue and expenses.
Estimate the correct revenue, expenses, and net revenue/expenses for the next fiscal year.
Competency 3: Communicate in a manner that is scholarly, professional, and respectful of the diversity,
dignity, and integrity of others and consistent with the expectations for health care professionals.
Adhere to the rules of grammar, usage, and mechanics