Week 4: Staffing Budgets/FTEs/ Variance Analysis

Assignment Guidelines with Scoring Rubric

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.

Due Date: Sunday 11:59 p.m. MT at the end of Week 4

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.

• 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.

Preparing the Assignment

Section OneStaffing 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 determine if the current FTEs for the unit will be sufficient to ensure quality and safe care continues to be provided.

1. 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.
3. Sandra has collected the following census information on all five units for the last month, in
4. 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 at 88% occupancy rate and project to increase over the next year.

Unit

Beds

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

Total Patient Days

A

35

31

30

31

30

29

30

31

30

31

29

29

32

31

33

31

31

33

34

34

34

34

32

30

32

31

30

30

33

31

34

0

941

B

15

15

14

11

9

7

12

12

15

13

13

16

15

15

15

16

16

15

14

15

16

15

13

13

17

16

15

16

16

14

15

0

424

C

13

10

12

11

11

11

13

13

13

12

13

12

12

12

13

13

13

13

13

13

13

13

13

13

12

12

12

12

13

13

13

0

372

D

32

30

27

27

24

26

23

27

29

28

28

25

27

30

26

31

31

30

30

30

32

32

32

26

25

25

25

23

31

31

30

0

841

E

6

6

3

3

3

3

5

5

5

2

2

2

2

4

4

3

3

0

0

0

6

5

5

3

3

3

2

5

4

3

3

0

97

(adapted from.....Healthcare Financial Management Association (2012).Managing fiscal resources: A budget and productivity case study.Retrieved from hfmamd.org

Average Daily Census/Occupancy Rate

Unit

ADC

Occupancy (%)

A

B

C

D

E

The Unit with an 88% occupancy rate is _____.

3. Using data contained in the first questions, complete the table below and determine the Average Length of Stay (ALOS) for the following three units.Show your work.

Unit

# Beds

Patient Days

# Discharges

Average Length of Stay (ALOS)

A

110

C

96

D

85

What is the ALOS for the unit you identified earlier at an 88% occupancy rate?_____

You have determined the Unit for which Sandra must make FTE projections. For the remaining questions in this section, refer to the figures used and or obtained related to the Unit identified in Question 1.

Additional information includes

• the budgeted hours of care per patient day (HPPD-budgeted) is 8.8; and
• each employee receives 300 paid non-productive hours/year.

1. Calculate the number of FTEs needed for the Unit. Show the formulas used and all calculations. Include the reference used for your calculations at the beginning of your work.
2. Calculate the TOTAL FTEs needed accounting for nonproductive time. Include the reference used for your calculations at the beginning of your work.
3. Sharon now knows how many total FTEs are currently needed on the unit to provide safe, quality care to the patients on the unit. However, with a 20% projected increase in occupancy rate and average length of stay remaining steady on the unit, how will the required FTEs be affected?
4. Calculate the TOTAL FTEs required to reflect an increased patient volume of 20% (don't forget to account for nonproductive time). Include the reference used for your calculations at the beginning of your work.
5. When Sharon calculated the number of FTEs budgeted currently in this unit and compared it to the number of actual FTEs being paid for, she found she was under budget by three FTEs. Explain how that could have happened and how this information affects her FTE budget request for the next year.

_______________________________________________________________________________

Section TwoVariance Analysis

Variance Analysis Case Study

During the month of February, an outpatient surgery clinic has incurred a significant unfavorable variance. The director of the clinic is quite concerned, as this has never occurred before. The director gathers information on total nursing care hours, average hourly rate of the employees, and total patient visits to determine what caused the variance. In addition, the director receives the patient acuity levels for the month of February.

Budget

Actual

Budget Variance

Patient Days

420

510

Nursing Care Hours

HPPD

5.0

5.6

Average Hourly Pay

$35.00

$45.00

$10.00

Total Payroll Costs

(Table adapted from: Rundio, A. (2016). The nurse manager's guide to budgeting and finance, 2nd. Ed, Indianapolis, IN: Sigma Theta Tau International)

1. Complete the monthly personnel report for the surgical unit.
2. Calculate each of the following. Include the formulas used with reference.
3. Volume (efficiency) variance:
5. Quantity (volume) variance:
7. Cost (price) variance:
9. What is the total variance in personnel budget for this month?
11. Analyze all the factors that made the differences and why the variances occurred. How can this variance be justified?
13. In what ways might these variances inform the current or future budgets?