• Prepare an 8-10 page operating budget for a hospital unit.
  • Competencies Measured
    By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

    • Competency 1: Design an operating budget that incorporates variances or discretionary spending. 
      • Prepare an operating budget.
      • Explain how a budget is designed and created.
    • Competency 2: Develop a plan for managing the labor force, within the parameters of the budget and productivity. 
      • Develop an approach to ongoing budget management.
    • Competency 5: Apply financial principles to a strategic plan for achieving organizational goals and fiscal success. 
      • Develop a strategic plan.
    • Competency 6: Communicate effectively with diverse audiences, in an appropriate form and style, consistent with applicable organizational, professional, and scholarly standards. 
      • Present budget data and information clearly and accurately.
      • Integrate relevant and credible sources of evidence to support budget data and information, correctly formatting citations and references using APA style.


Operating Budget for 35-bed Hospital Unit

Student’s Name

Institutional Affiliation




Operating Budget for 35-bed Hospital Unit



An operating budget is an instrumental guide to spending in organizations such as hospitals for

efficient and effective running. It comprises the expenditure and the revenue accrued for the

daily operation of the organizations. It focuses on the operational expenditure that includes the

cost-of-service provision. A hospital operating budget contains a list that provides a summary of

all the expenses and potential income, such as the charges of health service provision and the

variance between the expenditure and the income revenue, including both positive and negative

variance. Healthcare operating budgeting involves determining the funding to be planned for

facility operating and staffing costs, personnel costs, and training. Staffing usually takes the

largest cost of the hospital or healthcare operating cost. It does not only account for fixed

operations costs such as salaries; it also includes potential overstaffing, overtime hours, and other

variable costs.

A hospital operation cost is very important in healthcare as it allows the healthcare

systems such as a hospital to monitor and balance revenues and expenses to control and manage

the operation of such healthcare organizations. Preparing an operating budget requires that all the

revenue statistics include clearly and elaborately to enable the hospital manager and the strategic

planners to use the budget correctly in managing and planning for the hospital. All the major

sections of the budget should be indicated clearly for easy following of the budget when

planning or running a hospital. When creating a hospital operating budget, it is essential to

consider important aspects such as employee salaries, hospital revenues, licenses and taxes,

benefits, insurance, hospital equipment, supplies, and professional fees. The operating budget

should be prepared to allow close monitoring of all expenses and revenue generated during the

operating period or a financial year.


Design and Creation of the budget

Designing and creating an operating budget requires adequate time and professionalism.

The design and Creation of an operating budget for a hospital should be focused on reducing

expenses and increasing the revenue generated from offering health services. It is quite

challenging and time-consuming to create an operating budget plan for a hospital unit with 35

bed capacity with 20FTE staff due to some factors