Analysis of Operating Budget

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The workforce budget is the largest of the budget expenditures in nursing because health care is labor intensive. The operating budget runs a close second including the cost of supplies, electricity, repairs, and maintenance. The major components of the operating budget include revenues and expenses. Revenue is based on charges that the hospital will receive for a patient visit, or procedure. Expenses is based on the cost of staff, supplies, and running the nursing unit. A portion of the operating budget are non-salary expenses like medical supplies, office supplies, repairs and maintenance. The aim of this paper is to analyze the operating budget and determine where the missing supplies is going.

As the nurse manager in a busy area hospital, I am aware that staff occasionally bring home supplies. Recently, there has been a dramatic increase in the operating budget. As the unit manager, I would question the staff to determine who is taking the supplies or if anyone knows who is taking the supplies. I will also review the cameras to determine you is leaving the hospital with more items than they originally carried in.

According to Eggenberger (2015), charge nurses are defined as Registered Nurses having shift accountability for the overall performance of their unit. As the unit manager, if I am unable to determine who is taking the supplies, I would hold the charge nurse accountable. Charge nurses are described as monitoring for quality, managing the flow, resolving conflicts, maintaining safety and leading the way. Charge nurses state they ‘‘lead by example’’ and ‘‘earn trust by meaning what they say.’’ (Eggenberger, 2015, p.502) Charge Nurses lead by example so they should report any staff member who is taking home supplies.

Furthermore, after conducting an investigation the unit manager should hold the charge nurse responsible because as previously stated the charge nurse is responsible for all nurses on duty. Nurses should report any staff member that is taking home supplies. Nurses have a civil duty to report colleagues for pocketing supplies because essentially, they are robbing patients of having a valuable stay.

The question remains is the amount of fiscal debt worth your time and energy to try to eliminate this problem. Frankly, I don’t believe the fiscal debt is worth the time or energy to eliminate the problem. Eliminating the problem means firing a registered nurse and then hiring for that vacant position. I don’t believe it is worth the time or energy to eliminate the problem. According to Jones (2008), the RN turnover cost ranges from approximately $62,000 to $67,000 per nurse. It will cost more money to lay off a RN and appoint a new registered nurse than the cost of the missing supplies.

The Advisory Board Company (2012), stated that their 187-bed, medium-sized, community hospital in DC suffered several years of significant hospital staff turnover, nurse leaders and nurse management turnover rate of 18.2%, nursing staff voluntary turnover of rate of 12.5%, and a nurse vacancy rate of 7.4%. The estimated financial losses from the community hospital was $12,350 per termination. As the unit manager, I would hold a staff meeting and address the importance of not taking supplies home. Ultimately, I would not fire a registered nurse because it will cost more money than the cost of the missing office supplies.

In summary, the operating budget runs a close second including the cost of supplies, electricity, repairs, and maintenance. As the unit manager, I am aware that staff occasionally bring home supplies. Initially, I would conduct an investigation to determine where the missing supplies is going. Finally, I would not eliminate the perpetrator because it will be more costly to replace a nurse than to replace missing office supplies.


  1. Advisory Board Company. (2012). Turnover and vacancy benchmarks: Final report for the calendar year. Retrieved from http://www.advisory.com/∼/media/Advisory- com/Research/HRIC/Tools/2010/HR-Benchmarking/Final-results-for-2012-calendar- year.pdf.
  2. Eggenberger, T., PhD, RN, CNE. (2015). Nursing Administration Positions Open. Nursing Administration Quarterly, 42(11), 502-506. Retrieved February 10, 2019.
  3. Jones, C. (2008) Revisiting nurse turnover costs: adjusting for inflation. Journal of Nursing Administration 38(1): 11–18.

Cite this paper

Analysis of Operating Budget. (2021, May 27). Retrieved from https://samploon.com/analysis-of-operating-budget/



How do you explain an operating budget?
An operating budget is a financial plan that outlines the expected income and expenses of a business or organization for a specific period of time, usually a year. It helps to ensure that resources are allocated appropriately and that goals can be met efficiently.
What are the 5 main components of an operating budget?
The five main components of an operating budget are revenue, expenses, capital, assets, and liabilities.
What is an operating budget example?
An operating budget example is a plan that details how a company will spend its money to meet its operational goals. The budget includes income and expenditures, as well as a plan for how any surplus or deficit will be managed.
What should an operating budget include?
The operating budgets include the budgets for sales, manufacturing costs (materials, labor, and overhead) or merchandise purchases, selling expenses, and general and administrative expenses . The sales budget is the starting point in putting together a comprehensive budget for a business.
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