12 month budget

Today is your first day as the new Director of HIM.  You were hired directly out of college.  The budget is due next week and according to the CEO—“there are no exceptions.”  Your predecessor has retired after 42 years.  The Assistant quit because he was not promoted to Director.  He was being paid $45,000 and will not be replaced.  All other supervisory staff members are relatively new and serving as working supervisors.  Because you are an RHIA rather than an RHIT, you are being paid $10,000 more than your predecessor.  The Budget Data provided is the only data available because you cannot find anything in the “disaster” of an office that your predecessor left.

For this assignment, you are to prepare the 12-month budget (7/1/20-6/30/21).  Display your 12 months budget on a single Excel spreadsheet showing all line items.  Each month should be clearly labeled with all months on the same sheet.

Your assignment should include the budget assignment spreadsheet (see modules section of canvas), a memo, and a written explanation of budget assumption below.  The memo and explanations should be submitted as one or two word document(s).

In addition to the Budget Assumptions (see below) and the Prior Year’s Actual Data, the Budget Manager has given the following guidelines:

Your overall budget must decrease by at least 10% from last year because there have been volume declines.

You should not add any new expense accounts/line items.

Salary increases are anticipated for the next fiscal year and are not expected to exceed 2% due to the poor economy.

The Budget Manager expects you to give him the 12-month budget for all line items.

If you increase or reduce any of these line items, you must thoroughly explain why.

You cannot transfer costs to another department.

Prepare a written summary of the basis for the changes to each account for the CFO to accompany your budget.

Budget Assumptions   for FY 2021:

1. Paper goods are expected to increase 2%.

2. The imaging/scanning project is fully implemented and 2 FTEs (1 of which is an analyst) and all temporary workers   who were paid by the hospital will be eliminated.  Average hourly compensation is $14.50/hour.

3. Prior to the scanning project being fully implemented you had 7 analysts.

4. Your coding consultant indicates that the consulting fees for her services will increase by 3%.  She will do her audits in the Spring and   Fall.  She is the only consultant you   use at this time.

5. The imaging project has replaced the need for microfilming.

6. The CFO states that all travel, training, dues, books, and employee relations budgets must be zero-based. (READ YOUR TEXTS TO ENSURE YOU PROVIDE A   ZERO-BASED EXPLANATION.)  A detailed   explanation for these items must be provided showing the cost of each and how   the cost was derived (see page 143-145 of your text).  You have 9 AHIMA   credentialed coders, 2 credentialed cancer registrars, and 4 supervisors (2   are AHIMA credentialed members).

7. This is your year to go to the National AHIMA meeting. Only the Director is allowed to go to the   National meeting and you are going!    Your CFO has asked you to learn as much as possible about implementing   ICD-10 and an EHR system.  The meeting   is in Baltimore, MD.

8. Each week you are responsible for buying candy and assorted small sport items as giveaways for the Medical Staff.  Cost is expected to increase by 2%.

9. There is no change expected in the rates applied by the Federal Government. The FICA can be calculated as a percentage of salaries.

10. During this past year it was decided that food would no longer be provided at Medical Staff meetings.  Therefore, you no longer need to budget   catered food for the Cancer Conferences or for the Medical Records   Committee.

11. You will have a catered lunch from Dietary for HIM Week in November.  You will   have 50 employees in the department during HIM Week and 3 Volunteers.  Additionally, you intend to invite your CFO   and the President of the Medical Staff.    No other catered meals are expected.    In addition to a free lunch for HIM Week you will purchased a   logo-line item from AHIMA.

12. You will continue to have employee incentive plans for your analysts and coders.    These are flat payments made for achieving goals regardless of the   employee’s rate of pay and are not tied to any compensation increase.  The incentives are paid quarterly.

13. A full-time equivalent employee (FTE) is considered as one who could be paid 2,080 hours/year.

14. Temporary staff is not eligible for benefits.

15. Incentive compensation is not eligible for benefits.

16. Maintenance contracts are to be budgeted in the month they are due to be paid.

17. Your contracted release of information firm does not intend to make any changes to their services nor does it intend to raise   its charges to you.  Their 2 staff   members are included in your “employee” count for HIM week.

18. The FICA amount is based on regular and temporary salaries as well as incentive compensation.

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