Learning Objectives: VI.G. Financial Management 1. Plan budgets (3) 3. Explain budget variances (2) Due to rising costs and reduced patient stays at Good Samaritan Hospital, the hospitals president has announced that each department must eliminate one full-time equivalent (FTE) position and reduce other expenses by 5 percent. You are the manager of the HIM department. You must now deduce from the budget and actual figures in the budget on page 367 to propose a new budget for the year. How would you cut one FTE position and keep the department optimally functioning? How and where would you cut 5 percent of your other expenses? Use the sample budget provided in Example 12.6 on page 367 to answer this question. Submit in an Excel spreadsheet or Word table format, with textual description of your detailed scenario, as an attachment using the naming convention: lastname.firstname.Calculate FTEs Grading Guidance Responses to this question will vary based on your perspective. Provide a detailed scenario that explains how you would reduce staffing and cut budgetary expenses by 5 percent while keeping the department functioning at an optimal level.

Explain your proposal to reduce staffing and cut budgetary expenses by 5 percent while keeping the department functioning at an optimal level:
HIM Department Budget - April 2017
		Apr-17			YTD 2017			Proposed 2017	Explain Your Reasoning for the Cut
	Budget	Actual	Difference	Budget	Actual	Difference	% Difference	New budget
Revenue	1000.00	2000.00	1000.00	4000.00	3753.00	(247.00)	(1.1)
Revenue Total	1000.00	2000.00	1000.00	4000.00	3753.00	(247.00)	(1.1)
Payroll	46800.00	47259.00	(459.00)	187200.00	179441.00	7759.00	1.1
Supplies	8500.00	7949.00	551.00	34000.00	36254.00	(2254.00)	(0.9)
Contract Services	12000.00	11087.00	913.00	48000.00	44348.00	3652.00	1.1
Software Licenses	2300.00	2322.00	(22.00)	9200.00	9288.00	(88.00)	(1.0)
Minor Equipment	100.00	259.00	(159.00)	400.00	534.27	(134.27)	(0.75)
Dues & Subs.	50.00	0.00	50.00	200.00	50.00	150.00	4.0
Education	185.00	50.00	135.00	740.00	125.00	615.00	6.0
Travel	45.00	15.94	29.06	180.00	100.00	80.00	1.8
Postage	25.00	32.00	(7.00)	100.00	102.00	(2.00)	(0.9)
Misc.	125.00	72.12	52.88	500.00	326.00	174.00	1.5
Expenses Total	70130.00	69046.06	1083.94	280520.00	270568.27	9951.73	1.04
Budget Total			2083.94			9704.73