You work in the finance department of a large private hospital. The hospital uses decentralised departmental budgets, and these are prepared in its clinical departments (e.g. surgery, medicine, oncology), care areas (e.g. operating rooms and emergency departments), and support departments (e.g. pharmacy, radiology, pathology). The annual budget planning process typically begins six months before the year-end, takes up to 5 months, and involves hundreds of people. The CEO believes there must be a better way to manage the organizations resources and has asked for your expert opinion.

REQUIRED:

Write a memorandum to the CEO. In that memorandum you should:

a) Decide if the hospital should abandon the budget and explain the reasons for your decision. (6 marks)

b) Discuss whether there are better ways to allocate and manage the organisations resources and explain the reasons for your decision. (6 marks)

c) Using knowledge of self-reflection developed in the unit, you should provide some commentary about how budgeting issues relate to your previous experience or discipline knowledge. (5 marks)