Case Study for Healthcare Accounting

A department in your clinic wants to buy an expensive piece of equipment that had not been budgeted into the clinics capital purchases for the year. The department chair insists that the equipment is necessary to meet changing accreditation requirements for the department. The requirements will be in effect in 18 months. It is June and your fiscal year ends June 30. The department chair has $45,000 remaining in the equipment budget for the fiscal year and the money may not be carried over to the next fiscal year. However, the equipment costs $96,000. The budget for the next fiscal year has already been approved by the hospital board of directors. You are the accountant for this department and report to both the department chair and the CFO of the clinic. How can you assist the department chair with this purchase while not violating any accounting rules or clinic policies?