Purpose
This assignment provides learners with the opportunity to apply budgeting knowledge and skills by calculating full-time equivalents for a nursing unit, projecting FTE needs related to census changes, and analyzing a variance scenario.
Week 4: Staffing Budgets/FTEs/Variance Analysis Agreement V4 (Links to an external site.)
Due Date: Sunday 11:59 p.m. MT at the end of Week 4
Students are given the opportunity to request an extension on assignments for emergent situations. Supporting documentation must be submitted to the assigned faculty. If the student’s request is not approved, the assignment is graded and a late penalty is applied as follows:
- Monday = 10% of total possible point reduction
- Tuesday = 20% of total possible point reduction
- Wednesday = 30% of total possible point reduction
If the student’s request is approved, the student will be informed of the revised due date. Should the student fail to meet the revised due date, the assignment is graded and a late penalty is applied as follows:
- Monday = 10% of total possible point reduction
- Tuesday = 20% of total possible point reduction
- Wednesday = 30% of total possible point reduction
Total Points Possible: 150
Requirements
Description of the Assignment
This assignment is in two scenario-based sections each related to staffing budgets. In the first, the student will perform multistep calculations of FTEs and projection of future FTE needs for a selected nursing unit. The second section involves calculation of budget variance and its analysis. Each section requires supported written interpretation of findings.
Criteria for Content
Answer the questions and complete the calculations required for the two sections of the assignment.
Key points related to Calculations:
- When performing calculations, standard rounding rules apply. If the number to the right of the decimal is less than 5, round down to the nearest whole number, e.g., 33.4 = 33 If the number to the right of the decimal is 5 or greater, round up to the nearest whole number, e.g. 33.5 =34.
- Read the question carefully. Pay close attention to the units be asked and keep them consistent. For example, hours vs FTEs; days vs months vs years.
- Provide ALL formulas with references. Designate which formula associates with which source. It is not sufficient to simply list the source at the beginning of the section. Write out the formula used BEFORE filling in the numbers.
Example: Efficiency Variance + Volume Variance + Cost Variance = Total Variance
Rundio, A. (2016). The nurse manager’s guide to budgeting and finance. 2nd. Ed., Indianapolis, IN: Sigma Theta Tau International.
- Section One: Staffing Budget and FTEs
- Calculations of full-time equivalents (FTEs)
- Project FTE needs related to census changes
- Section Two: Variance Analysis
- Calculating variance
- Variance analysis with explanation
Download the Assignment Word Document and submit your answers directly onto the form. When completed, upload into the assignment portal in your course. For the questions requiring a written response, please adhere to proper grammar and syntax, and provide references. For the questions requiring calculations, show all your work including the formula used. Include the references for formula chosen.
Rubric
| Criteria | Ratings | Pts | ||||
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Background Information |
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ADC and Occupancy Rate |
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Average Length of Stay (ALOS) |
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Current FTE |
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Total FTE (Accounts for nonproductive time-current) |
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Effect of Volume Increase on FTE |
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Total FTE (Projected) |
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FTE Difference Explanation |
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Personnel Budget table |
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Volume (Efficiency) Variance Calculated |
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Volume Quantity Variance Calculated |
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Cost (price) Variance calculated |
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Calculation of Total Variance |
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Analysis of Variances |
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Writing Conventions, format, and reference citations |
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Late Deductions |
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Total Points: 150
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SOLUTION
Section One—Staffing Budget and FTEs
Personnel Budget Case Study
Sandra Chambers has recently accepted the position of assistant administrator for the department of nursing at Potter Regional Medical Center where she will oversee the operations of five medical units. As she evaluates the budgets for the different cost centers, she finds that all are being used at near or full capacity. The activity in four of the five has remained steady over the past 2 years. A fifth unit has realized a steady increase in patient volume during that time and is currently at 88% capacity. It has been projected that within the next 12 months the volume of patients moving through that unit will increase by 20%. Sandra needs to determine if the current FTEs for the unit will be sufficient to ensure quality and safe care continues to be provided, and if not, what is the number of FTEs that will be needed to cover a 20% increase in volume.
- Suggest all the information Sandra needs to collect in order to project the FTEs needed for the next fiscal year accounting for the projected increased capacity. Remember, she is new to her position so be sure to include background data on the unit itself as it relates to previous budgets, nursing staff, and the organization. In other words, summarize your approach to this Case Study.
Sandra will need to collect data on average daily census (average number of beds occupied every day), average patient days, hours of care per patient day, average length of stay, and hours of care per day for each patient day in order to accurately predict the future fiscal year’s personal budget. She must also gather information on the personnel mix, salary and benefits offered for each role, vacation coverage requirements, sick leave and unforeseen absences, average productive and nonproductive hours per patient, and the patient acuity of the unit. She will also want information on non-staff compensation expenditures such as clerical supplies, equipment maintenance, service contracts, and medical supplies.
- Sandra has collected the following census information on all five units for the last month, in
addition to what was asked in question number one. Calculate the ADC and Occupancy Rate for each unit using the Daily Census/Occupancy Rate table to determine which unit is currently at 88% occupancy rate and projected to increase over the next year.
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