NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

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Capella university

NURS-FPX 6216 Advanced Finance and Operations Management

Prof. Name

Date

Preparing and Managing a Capital Budget

Designing a capital budget is a vital phase in healthcare leadership as it allows for large investments that improve productivity and care services (Homauni et al., 2023). This approach entails planning to deploy resources toward improvements, like nurse lounge refurbishment. This capital budget focuses on boosting nurse productivity and fulfillment by addressing infrastructure issues that impact staff motivation and turnover. This paper centers on a 50-bed unit that suffers from staff turnover due to poor workplace morale and discomfort. As a unit manager, I will prepare a capital budget for the remodeling of the nursing lounge. 

Description of Capital Acquisition

Budgeting for capital is crucial for hospitals in the planning and allocation of resources to promote quality care. The objective of capital budgeting is to allocate funds to resources that will provide benefits over time through profits and savings. The process of obtaining these assets is referred to as capital acquisition. It requires a careful analysis of available financial resources (Attaoui et al., 2021). Healthcare organizations demand financial resources to optimize care framework and operational efficacy. For this project, the capital acquisition aimed at remodeling the nurses’ room in a 50-bed step-down unit.

The refurbishment intends to solve the concerns of poor nurse fulfillment and productivity by establishing an appealing workplace that can mitigate nursing burnout and elevate their efficacy, retention, and standard of care (Shetty et al., 2024). As a unit manager, I took the role of remodeling the nurses’ lounge to boost nurse satisfaction and the working environment. I intend to create a capital budget for the lounge refurbishment using a systematic method that entails a need evaluation, feasibility review, expense estimation, execution, and management planning.  The project’s timeline is about six months. In the first month, I will plan, acquire information on the present situation of the lounge, and assess its impact on staff satisfaction and motivation.

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

I will evaluate assets like economic data, market research, and input from stakeholders via polls and surveys. I will work with other managers, staff, finance groups, and outside advisors to provide a thorough and integrated strategy (Dion et al., 2023). In the second month, I will explore solutions, like budget preparation, infrastructure changes, and locating genuine suppliers. In the third month, I will develop a capital budgetary strategy that details the renovation expenses and estimated impact on nurse morale, and efficacy. The plan will be presented to the hospital’s leadership and budgetary panel, along with sufficient proof of the necessity of renovation to mitigate nursing turnover, as faced in the last three years. 

In the fourth to sixth months, following the budget acceptance, I will collaborate with suppliers and stakeholders to carry out the renovation work to ensure that it will be finished on time. It involves redesigning the lounge with comfortable furnishings, upgraded amenities like kitchenettes, new storage lockers, and rapid connectivity. The lounge’s aesthetic will include relaxing colors and enough natural light to offer a pleasant environment that will assist in reducing burnout (Shetty et al., 2024). In the final month, after renovation, I will use a survey and input strategy to assess the influence of renovation on nurse fulfillment and morale (Jin et al., 2023).  The renovation description is comprehensive and appropriately depicts the adjustments required to improve the nurses’ workplace. It is assumed that improving the nursing lounge will boost job satisfaction, retention, and morale. Regarding the timeframe, it is assumed there will be no substantial delays or unexpected obstacles during the remodeling project.

Justification of the Need for the Capital Acquisition

The refurbishment of the nursing lounge will assist nurses by providing a contemporary, relaxing, and fully furnished room for recuperation and time off. A positive workplace lowers anxiety and burnout, resulting in increased job fulfillment and morale and nurse retention (Akinwale & George, 2020). Failure to renovate the nurses’ room can result in prolonged poor morale and significant burnout, leading to lower productivity and intention to leave the job. Economically, it will incur hiring and educational expenditures and a rise in healthcare costs for resolving issues like medical errors related to nurse burnout. A revamped lounge with updated facilities will provide a setting for meditation and stress reduction, boosting staff efficiency and mitigating turnover. Improved nurse satisfaction leads to enhanced patient care because inspired and satisfied nurses are more likely to provide efficient care services (Shetty et al., 2024).

The refurbishment supports the unit’s mission by creating an encouraging and productive workplace, which is critical to meeting the organization’s mission of excellence in offering care and improved staff productivity. The renovated lounge will be a real investment to boost nurses’ fulfillment, resulting in better patient results. Poor investment in the workplace environment can boost the rate of medical mistakes, compromising patients’ safety, care quality, and hospital credibility (Pereira et al., 2024). Further, executive leaders are predicted to show a positive attitude and response towards the budget, considering the long-term positive impacts of spending on employee wellbeing and improving healthcare and organizational performance. 

The refurbishment has several pros and cons. For example, the renovation is predicted to greatly improve nurse fulfillment and morale, resulting in reduced turnover and cost reductions for hiring staff. Increased nurse productivity is linked with better patient care in accordance with the hospital’s mission of offering efficient care (Akinwale & George, 2020). However, there are some cons, like putting lounge renovations over other vital hospital needs, which can impair patient care. Certain stakeholders can oppose, arguing other budgetary needs for areas of advancement, like buying cutting-edge care supplies versus the lounge renovation. Managing these aspects is critical for effective plan execution.

Preparation of the Capital Budget

The capital budget for the remodeling seeks to improve the work setting and personnel wellness in the 25-bed unit. The refurbishment aims to increase nursing staff satisfaction and boost care quality (Pereira et al., 2024). To create the capital budget for the renovation, we should consider direct as well as indirect expenses to guarantee all components of the project are addressed. The budget comprises a minimum cash amount to guarantee viability and contingency expenses to cover unanticipated expenses. This budget offers a thorough approach to remodeling the lounge, entailing all estimated expenditures and contingency to cover any unforeseen costs. 

Expense Category	Description	Estimated Cost
Direct Expenses
Furniture	Comfortable seats, desks, couches, tables, and cabinets	$25,000
Amenities	Kitchen gadgets and eating area necessities	$7,000
Paint and Décor	Soothing colors, artwork, and decorating items	$4,500
Lockers	Personalized secure lockers for nursing staff	$3,000
Lighting	Cost-effective and adaptable lights	$4,000
Flooring	Resilient flooring	$5,000
Labor	Costs of suppliers, construction workforce, and service staff	$15,000
Indirect Cost
Miscellaneous	Other minor items and sundry costs	$3,000
Temporary Facilities	Temporary nursing staff lounge area	8,000
Contingency	Saved for unseen costs	$6,000
Total Cost	–	$80,500

The budget was designed with the assumption that it is economical and provides an ergonomic and motivating workplace for nursing staff, boosting efficacy. Uncertainties regarding the price of furnishings, amenities, and labor charges are possible. Further information about the current market price and expected volatility can aid in cost calculations. Uncertainty over the supply of assets, like supplies and competent workers, influences project expenditures and timeframes. To decrease harm, more research into resource availability and potential problems is needed (Hussain et al., 2020). Performing a thorough risk analysis is crucial for resolving risks. 

Description of the Process for Calculating Costs

I used several efficient methods to evaluate costs while creating the capital budget for lounge makeovers, like collaborating with the finance department director. It provided me with an estimate of the cost of renovations. Additionally, market research was undertaken to assess the price of items. The key tools for calculating expenses are vendor estimates and past restoration initiatives. The data acquired from present vendor and contractor quotes seems to be valid, but they can fluctuate due to market trends (Bodendorf et al., 2022). Consultation with administration, building contractors, and suppliers contributes to precise and legitimate cost estimation.

I also utilized the bottom-up costing strategy for capital budgeting. This approach entails evaluating expenditures for every element of the remodeling individually like furnishings, infrastructure, workforce, and other costs (Teo et al., 2022). This method enables deeper analysis and delivers a more thorough budgetary overview. Cost estimation approaches include factoring in unanticipated costs and checking projections against previous data to adjust disparities caused by vendors, market fluctuations, or undetermined factors (Hoseini et al., 2020). 

Budget Management Plan

A budgeting control plan is crucial to guarantee that project expenses are regulated and in line with budgetary allocations, avoiding overspending and economic distress. It also aids in successfully managing any deviations or unanticipated costs to ensure the project is under budget (Homauni et al., 2023). In the budget management plan, initially, I will interact with accounting staff, hospital managers, and a budget board to properly manage the budget. Stakeholders will assist in executing the budget by ensuring that spending matches the allocated finances and offering guidance in decision-making regarding funding. Second, I will use cost-control techniques for frequent budget evaluations and audits to monitor spending and guarantee it stays within the specified boundaries.

A robust cost-control system with cost-tracking tools will be used to track expenses immediately compared with the allocated funds, and fixed-price agreements with suppliers will be established to avoid unforeseen cost rises (Toosi & Chamikarpour, 2021). Finally, an emergency fund will be developed to handle budget deviations and unexpected costs to preserve monetary versatility. Budget performance will be monitored on a regular basis, and supplier agreements will be adjusted if necessary to resolve budget disparity. It will help sustain conformity with the budget and mitigate disruption in the renovation project (Ama et al., 2023). The estimated expenses depend on the latest market prices and vendor quotations, which represent the most precise prices that exist during budget planning. The assumption is that the project will be finished within the allocated time, with minor interruptions, ensuring that the financial plan stays viable during the renovation phase.

Effects of Capital Acquisition 

The remodeling of the nursing’ lounge is projected to improve the unit’s economic health by boosting nurses’ satisfaction and morale, resulting in low turnover expenses and improved patient services (Shetty et al., 2024). This upgrade can result in a Return on Investment (ROI) by improving nurses’ efficiency and burnout and minimizing training, hiring, and extra care costs due to medical errors costs. Maintaining current nurses is cost-effective, avoiding hiring costs and boosting the quality of care (Vardaman et al., 2020).

The capital acquisition helps boost patient trust in nursing services, increase patient influx, and generate revenue. It will assist in creating an inviting setting for staff, enhancing the clinical results (Akinwale & George, 2020). The renovation’s reimbursement period is expected to be one to two years, based on expected enhanced efficiency and lower turnover expenses. The ROI can differ based on how much the refurbishment enhances productivity and patient results. Variations in personnel retention rates and increased efficiency also affect refunded costs. Finally, extra information is vital to identify risks and constraints associated with the capital acquisition, such as overestimated budgets, unforeseen expenses, and operational issues during the remodeling process (Attaoui et al., 2021).

Conclusion

In conclusion, the capital budget was designed to boost nurses’ morale and productivity, resulting in enhanced patient services and unit efficiency. The budget, comprising a cost analysis and a management plan, indicates an efficient financial strategy for the renovation project. By resolving critical risks and employing an extensive cost estimation process, the refurbishment can offer ongoing benefits and help achieve staff efficiency and the hospital’s goals.

References

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Ama, O., Tyungu, A., Udende, W., & Tiza, M. T. (2023). Enhancing procurement efficiency through strategic budgeting: A case study of Benue State Ministries, Departments, and Agencies (MDAs). Global Journal of Engineering and Technology Advances, 16(3), 070-081. https://doi.org/10.30574/gjeta.2023.16.3.0166

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

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NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

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