Prepare a 4-5 page capital budget for a major capital acquisition. Rubric Competencies Measured By successfully completing this assessment, you will demonstrate your pro
Prepare a 4-5 page capital budget for a major capital acquisition.
Rubric
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
- Competency 3: Develop a capital budget.
- Describe a capital acquisition.
- Prepare a capital budget.
- Describe the process for calculating costs.
- Competency 4: Determine the equipment and services needed to maintain seamless patient or client care.
- Justify the need for a capital acquisition.
- Competency 5: Apply financial principles to a strategic plan for achieving organizational goals and fiscal success.
- Present a plan for budget management.
- Explain how a capital acquisition will affect the financial health of the organization.
- Competency 6: Communicate effectively with diverse audiences, in an appropriate form and style, consistent with applicable organizational, professional, and scholarly standards.
- Present budget data and information clearly and accurately.
- Integrate relevant and credible sources of evidence to support your budget data and information, correctly formatting citations and references using APA styl
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Preparing and Managing a Capital Budget
Kelly Hise
Capella University
NURS-FPX6216 – Advanced Finance and Operations Management
Dr. Georgena Wiley
August 2, 2022
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Table of Contents
Preparing and Managing a Capital Budget…………………………………………………………………………..3
The Captial Acquisition…………………………………………………………………………………………………….3
Need for the Capital Acquisition………………………………………………………………………………………..4
Capital Budget…………………………………………………………………………………………………………………6
Calculating Capital Cost……………………………………………………………………………………………………6
Plan for Budget Management…………………………………………………………………………………………….7
Financial Health of Renovation for Organization…………………………………………………………………7
References……………………………………………………………………………………………………………………….8
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Preparing and Managing a Capital Budget
Capital budgets are a means of funding allocated for the department and used for
expenditures involving equipment, information technology, furniture, facility improvements or
renovations, and new construction. The nurse manager of a 50-bed step-down unit is preparing
the capital budget and has noticed the staff turnover over the past three years. The manager
decides to gather data from exit interviews and patient surveys to gain better insight into the
department's culture. The findings show low nurse satisfaction, poor morale, and complaints of
an outdated and unhappy work environment. After research on increasing productivity and staff
enthusiasm to establish a positive work environment, the nurse manager has decided to renovate
the staff lounge as a significant capital purchase.
The Captial Acquisition
The employee staff lounge on the step-down unit is very outdated. A black leather couch
is peeling, and the cushions are worn down. The tables have faded brown Formica tops with
cracked sides that have been sanded down so as not to be sharp. The chairs have cloth bottoms
with stains. The coffee machine takes eight minutes to brew a pot of coffee, the small
Refridgerator struggles to keep staff lunch cold, and the walls are tan in color. The plan for the
renovation will involve staff input on the color scheme, ideas for furniture, more tables, or
keeping a comfortable sitting area such as a couch.
The nurse manager decided to improve the work environment because an office break
room has a strange and powerful push and pull effect on office culture and morale (Kleinman,
2018). Leaders should constantly examine and work to improve a staff break room knowing this
place can set the tone of the work culture. Pros in enhancing the staff lounge will create a space
for interpersonal communication, collaboration with co-workers, and a mental break during a
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high stressful shift. Cons to a staff break room are allowing staff to bring the energy of negativity
and endless complaints. This nurse manager wants an inviting staff lounge filled with healthy
snacks, a coffee bar, and positive affirmations to help the overall well-being and morale of the
employees.
The time lime for the project will take an estimated three to four months, including the
approval from leadership and allocating of funds available. The nurse will ask staff members to
bring in color samples for the walls, and there will be a vote as a team. The nurse manager will
get quotes for a few sets of tables for four people, plastic sturdy chairs for easy cleaning, a coffee
bistro bar with a Keurig coffee maker, and pictures of beaches with some color pop to brighten
the space. There will be a watering station with an ice maker to have cold filtered fresh water.
There will be added Bluetooth speakers for the staff to connect music as a sense of therapy to
relax in the space while taking their break. There will be a wall dedicated to staff
acknowledgments and recognition for the department goals as it aligns with the value and
mission of the unit. The proper break room can offer a place for relaxation, rejuvenation, and
refreshing the employee to tackle the second half of their shift(Kleinman, 2018).
Need for the Capital Acquisition
The renovation of the staff lounge will positively impact the staff culture by giving the
nurses a sense of value. Leadership will present the value in employees' well-being to provide a
safe place to reconnect with themselves. Staff nurses will be encouraged to take their minds off
the stress of the job and relax on their thirty-minute break. Happy and healthy employees take
pride in their work, reflecting this behavior in the care delivered to the patients. There is a direct
correlation between nurses' participation in staffing, resource adequacy with emotional
exhaustion, and job satisfaction in the work environment (Alharbi et al., 2020). The nurse's
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negative perception of the practicing environment is associated with a lack of relationship with
leadership and a small part of the influence in the unit decisions. Its the nurse manager’s goal to
guide the relations between leadership-nurse and nurse-physicians to improve job satisfaction.
While obtaining staff input and participation in hospital affairs to renovate the staff lounge, the
nurse manager can work toward staff retention by creating a positive work environment.
Nursing turnover is costly to a healthcare system. Staffing is the majority expense of an
operating budget. Constantly hiring and training new staff, overtime, and hiring travel nurses are
budgetary constraints. The historical data from the past three years of the unit represents high
turnover and, increasing nurse-patient ratios, a decrease in staff and patient satisfaction. The
provided information demands change and implementation to create a positive work culture and
cultivate a foundation of a healthcare team. For executive leaders to buy into the project, the
capital budget planning needs clear objectives and evidence to support a return on investment
(Stroudt, 2013). The renovation of the staff lounge will result in higher staff satisfaction by
allowing them a space to unwind their emotions and destress while they take a break from their
shift. Nursing care can be highly stressful; the job is physically, emotionally, and mentally
demanding.
Without a space for the staff to feel safe to be themselves and relax from the external
stimulation, their emotional well-being will turn them away from the job, causing a high
turnover. If the nurse manager can help ease some of the job demands by offering a more inviting
lounge, this will result in higher staff satisfaction with their work environment and decrease
turnover rates. The staff nurses will feel like a valued investment to the organization. A positive
work environment and staff satisfaction will be reflected in patient care through rested staff will
deliver excellent patient care and improve patient satisfaction and health outcomes.
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Capital Budget
A contracted company will do the renovation of the lounge. Therefore the direct expense
of the job will be based on estimates received and their overall vision of utilizing the space best.
The contractors will be interior designers to purchase furniture, paint supplies, room decor, and
materials at wholesale pricing. The indirect cost will be the project manager's salary overseeing
the renovation. There will be a minimum budget of twenty-three thousand; however, the manager
will plan for a ten percent variation to cover incidentals. The variances can be related to increases
in supply cost from supply and demand and additional expenses in materials or labor it may take
to complete the project on schedule. Some unknowns are how many labor hours the job will take
to complete, the wait time for furniture, and the hours of operation the company will be working.
Additionally, the nurse manager must provide a break room space during renovations. Once the
nurse manager gathers the estimates, the nurse manager seeks expert advice from the financial
team to collaborate on a budget plan.
Calculating Capital Cost
The calculated capital costs will be based on the cost management budget. The cost
management budget provides accountability and gives structure to the estimated plan by
controlling and keeping construction supply cost down (Rundio, 2016). Cost management can
maintain transparency with the contractor and the project manager. The project manager can
track progress and provide instant intervention if the project falls behind or needs clarification.
The system will utilize the cost management plan to forecast future projects of the exact nature
with this budget structure.
Table 1
Lounge Renovation
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Service Cost Labor $9,000 Material and Supplies $6,000 Coffee bistro with maker $700.00 Furniture (table, chairs, lounger) $4,300 Picture & Billboard & Speaker $2,700 Continence (10% of the minimum budget) $2,300 Total $25,000
Plan for Budget Management
The nurse manager will rely on the project manager to control the cost through the cost
management plan. The variances account for ten percent of the cost for extra labor or supply and
demand of products. The financial team will approve the initial cost for the renovation. Suppose
there are any extreme hiccups or delays in the project plan. In that case, the nurse manager will
evaluate the most needed items with the staff members—the nurse manager and inquirer about a
rolling capital approach. The rolling capital approach supports the nurse's goals of the
improvement efforts to increase staff satisfaction in the unit; the patient satisfaction numbers will
increase with the overall outlook to increase revenue with value-based care. The rolling capital
can adjust the allocated funds based on the unit's financial health(Jasuta, 2016).
Financial Health of Renovation for Organization
The renovation for the nursing lounge project is relatively small, and the return on
investment will outweigh the cost due to staff retention, employee satisfaction, and the
transference of pleased workers will reflect in the delivery of patient care. The nurse manager is
confident in bringing the staff lounge alive to promote a positive culture and caring work
environment for the step-down unit. The healthcare system will reduce the cost of training new
staff, overtime ratios, and travel nurses by creating a nursing unit that maintains low turnover and
high productivity in providing excellent patient care.
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References
Alharbi, A. A., Dahinten, V., & MacPhee, M. (2020). The relationships between nurses’ work
environments and emotional exhaustion, job satisfaction, and intent to leave among
nurses in saudi arabia. Journal of Advanced Nursing, 76(11), 3026–3038. Retrieved
August 1, 2022, from https://doi.org/10.1111/jan.14512
Jasuta, L. (2016). Rolling capital managing investments in a value-based care world. Healthcare
Financial Management, 70(6), 82–89. Retrieved August 1, 2022, from
https://www.proquest.com/docview/1799215864/fulltextPDF/5D2D7C5382234583PQ/1?
accountid=27965
Kleinman, J. (2018, February 16). 10 ways your office break room can improve your office
culture – corporate essentials. Corporate Essentials. Retrieved August 1, 2022, from
Rundio, A. (2016). Budget development for nurse managers. Reflections on Nursing Leadership,
42(3), 1–8. Retrieved July 31, 2022, from
Stroudt, R. L., Jr. (2013). 12 strategies for managing capital projects. Healthcare Financial
Management, 67(5), 68–71. Retrieved July 31, 2022, from https://www-proquest-
com.library.capella.edu/docview/1419718536?accountid=27965
Tang, J. H.-C., & Hudson, P. (2019). Evidence-based practice guideline: Nurse retention for
nurse managers. Journal of Gerontological Nursing, 45(11), 11–19. Retrieved August 1,
2022, from https://doi.org/10.3928/00989134-20191011-03
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Prepare a 4-5 page capital budget for a major capital acquisition.
Introduction
Note: Complete the assessments in this course in the order in which they are presented.
In today's health care environment, the focus on major purchases, as part of the capital budget, has emphasized the need for newer and better technology. Although the need to invest in capital equipment and technology has been ongoing, the nursing workforce must also have a safe and pleasant work environment.
This assessment provides an opportunity for you develop a capital budget for a major facility improvement that will benefit patients, nurses, and the organization.
Most nurse leaders work with operating budgets, but will also have input into capital budgets. A capital budget is typically developed separately from the operating budget and is usually developed to purchase items that are often referred to as big-ticket items that will enhance the capacity or services of an organization. For example, capital budgets may cover land purchase for the future site of a new outpatient surgical center, construction of a new building or build-out for renovation of an already existing building, or replacement of old equipment.
It is important to remember that health care is also a major business. While for health care providers, patient care and safety are priorities, health care institutions must operate from a business model in order to survive financially. As nurse leaders or executives, you often have a role to play in developing a capital budget to improve care at some level. In addition, a rapidly changing health care environment requires nurse leaders who have the financial management and budgeting skills to ensure that large capital expenditures further the mission and goals of the organization.
Note: Complete the assessments in this course in the order in which they are presented.
Preparation
You are the unit manager of a 50-bed, step-down unit, and it is time for you to prepare your annual capital budget. You have seen a significant turnover in your nursing staff in the past three years; a review of exit interviews and patient surveys indicates low nurse satisfaction, poor morale, and complaints of an antiquated and depressing work environment. You have researched the impact of a positive working environment on staff productivity and morale and decided to request a renovation of the nurses' lounge as the main purchase in your capital budget. You will present your request as a quality improvement investment.
As you prepare to complete this assessment, you may want to think about other related issues to deepen your understanding or broaden your viewpoint. You are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community. Note that these questions are for your own development and exploration and do not need to be completed or submitted as part of your assessment.
· How would you approach the process of designing a capital budget? For example:
· What steps would you need to take?
· What resources would you access?
· Will you collaborate with other executives or staff?
· How will you tie the vision for the capital expenditure to the organization's mission and goals?
· What challenges do you anticipate in justifying a capital budget to administrative leaders in an organization?
· What criteria might a particular health care organization or service provider apply to evaluate the return on a capital investment?
MSN PROGRAM JOURNEY
Please review this guide for your degree program. It can help you stay on track for your practicum experience, so you may wish to bookmark it for later reference.
The following resources are required to complete the assessment.
· APA Style Paper Tutorial [DOCX]. Use this tutorial for the written portion of your capital budget.
Requirements
Note: The requirements outlined below correspond to the grading criteria in the assessment scoring guide. Be sure that your budget addresses each point, at a minimum. You may also want to read the Guiding Questions: Preparing and Managing a Capital Budget [DOCX] to better understand how each criterion will be assessed.
Prepare a capital budget for a facility renovation. Assemble your budget figures in a table, using a format of your choice. You may use either Microsoft Word or Excel to create your budget table.
Note: You may use the budget in the Vila Health: Preparing a Capital Budget multimedia exercise as an example of how you might format your table. You may also use a budget format used in your organization or a format you find in any of the course resources or on the Internet.
· Describe the capital acquisition.
· Justify the need for the capital acquisition.
· Prepare the capital budget.
· Describe the process for calculating costs.
· Present a plan for budget management.
· Explain how the capital acquisition will affect the financial health of the organization.
· Present budget data and information clearly and accurately.
· Integrate relevant and credible sources of evidence to support your budget data and information, correctly formatting citations and references using current APA style.
Additional Requirements
If you used Microsoft Excel to create your budget table, submit the Excel file along with your budget narrative. You may also add the Excel file to your Word document as an embedded object.
Format your budget using APA style.
· Use the APA Style Paper Template [DOCX], linked above, to help you in writing and formatting your budget. Be sure to include:
· An APA-formatted title page and reference page. An abstract is not required.
· A minimum of five properly formatted citations and references.
· Your budget should be 4–5 pages in length, not including the title page and reference page.
Portfolio Prompt: You may choose to save this learning activity to your ePortfolio.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
· Competency 3: Develop a capital budget.
· Describe a capital acquisition.
· Prepare a capital budget.
· Describe the process for calculating costs.
· Competency 4: Determine the equipment and services needed to maintain seamless patient or client care.
· Justify the need for a capital acquisition.
· Competency 5: Apply financial principles to a strategic plan for achieving organizational goals and fiscal success.
· Present a plan for budget management.
· Explain how a capital acquisition will affect the financial health of the organization.
· Competency 6: Communicate effectively with diverse audiences, in an appropriate form and style, consistent with applicable organizational, professional, and scholarly standards.
· Present budget data and information clearly and accurately.
· Integrate relevant and credible sources of evidence to support your budget data and information, correctly formatting citations and references using APA styl
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