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NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Student Name

Capella University

NURS-FPX 6216 Advanced Finance and Operations Management

Prof. Name

Date


Preparing and Managing a Capital Budget

The current assessment is based on a 50-bed facility facing the issue of nursing turnover due to a depressing workplace and low morale and satisfaction. The plan is to address the challenges while creating a budget for staff training and reconstructing their lounge. It is based on capital purchases, budget management, and justifications. As a nurse leader, I plan to create a nurses’ lounge for the staff to re-energize and feel motivated. The aim is to prepare a capital budget that can help me analyze the available resources and achieve effective outcomes.

Capital Acquisition and Assumptions

Capital budgeting is one of the most critical aspects of an organization when it comes to planning and evaluating a decision regarding resource allocation among different projects. Since these projects are one-time investments that have long-term sustainability, the resource allocation is well-managed and thought-through (Bosch-Badia et al., 2020). Care within the small facilities is dependent on productivity and staff morale. As a step-down facility between the intensive care unit and the general surgery floor, the innovation aims to be state-of-the-art, where the nurses working within such a high-inductive environment can have a lounge where they can relax and have easy access.

The scope of the renovation is based on changing the depressing working environment due to which nurses are quitting. Research has highlighted that a positive working environment helps nurses feel motivated as they can connect within their space, feel valued, and have better facilities, which results in reduced medical errors, enhanced patient care, and a decreased number of readmissions (Maassen et al., 2021). The current plan is based on providing a new look to the lounge and providing comfort to the staff. This will be done by adding comforters and convertible medicated chairs and couches. Similarly, adding lockers for the nurses to keep their belongings secure and vending machines and water dispensers for fulfilling nutrition and hydration needs.

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Utilization of hygienic products to help nurses feel relaxed and safe from occupational infections. The project will take approximately eight months to complete, as the infrastructure has to be changed and renovated. In addition, we considered whether or not there was enough room for fifty to sixty nurses and whether the nurses felt like they had the kind of supportive environment they needed to do their best work. The plan is based on the assumption that providing a comfortable space and taking care of the needs of the nurses will help increase their satisfaction level, eventually improving the quality of healthcare they provide to the patients.

Justification for the Capital Acquisition

 Research has highlighted that nurses’ motivation is one of the significant aspects of quality healthcare and helps in staff retention (Karaferis et al., 2022). Thus, renovating the facility to help the nurses feel that they belong to the place is a critical responsibility of the nurse leader. These renovations will benefit the nurses by providing staff-centered changes to help them feel comfortable and interact with their colleagues in a positive environment. Researchers have highlighted that a positive working environment helps enhance the staff’s productivity and allows them to perform at their best to enhance the organization’s overall outcome rate (Zhenjing et al., 2022).

This change will also boost nurses’ productivity, empower them to take patient care more seriously, and align their practices with the company’s goals. Thus, calm, self-assured nurses will be better able to provide patient-centered care, listen to patients with empathy, and provide the most effective care. A study has highlighted that if the nurses’ emotional, physical, and psychological needs are not met, their ability to support and serve patients and their families is compromised (Pedrosa et al., 2020); thus, the changes in lounges are an effort to meet the needs of the nurses.

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Employee satisfaction improves care quality, which holistically serves the organization’s goal and mission of providing patient-centered care, as staff motivation increases productivity and leads to more proactive and patient-centered care for patients. Providing a lounge provides nurses with an area where they can relax after a hectic day; moreover, having a space designated to the staff can help them feel valued by the organization, fostering a positive and cooperative working environment . Furthermore, the executives are expected to approach this budget positively, based on reducing the turnover rate and improving patient outcomes and satisfaction.

The alternatives to this would be centered on performance reviews and incentives for the staff; however, this would assist in recruiting and retaining staff members. These changes, such as providing incentives or performance based incentives, only cater to their external motivation aspects; however,  as reported by the nurses, the core reason for leaving the job is the depressing environment, thus, only increasing pay would only temporarily retain the staff, while a holistic effort targeting the intrinsic and extrinsic motivations can have lasting effects. 

Preparing a Capital Budget

The current budget’s implementation is planned for the next eight months. The preparation of the budget begins with data collection and identifying the needs of the nurses through interviews and surveys. The plan was based on the assumption that the budget aims to provide a supportive, less stressful, and positive environment that helps the nurses feel comfortable and motivated. The following budget total and division were provided in Table 1 (Appendix 1). However, a few areas of uncertainty are related to the leadership and workload that may have been a significant factor in high turnover. Another uncertainty is regarding the effective maintainence of the lounge as it may require additional costs if the lounge is not adequately maintained, posing a threat to the budgeting process.  

Process of Calculating Cost

  The data was collected from different vendors and market surveys to understand and analyze the current prices of the suggested changes, then the vendors were invited to put in their quote for all the ascribed changes, and the best suited vendor quotation was selected by the CFO and CEO. The process of calculating costs was based on the payback period (PP) method which aims to estimate the number of years required to take back the initial investment (Mollah et al., 2021). The finance team will be responsible for cost calculations. The quickest capital budgeting technique allows the organization to compare the results based on the amount of revenue it has provided.

The estimated number of years required in the current assessment was one year, as retention, hiring, and training savings can provide a clear understanding of the trends and the number of years required to complete them. However, it is essential to note that the timeline of one year is after implementation. The data for the last annual budget was collected from cost information sources from the finance department, stakeholders, and external sources that were involved. The executives, finance head, and administration analyzed the data, made cost assumptions, and allocated the years for implementation with assistance from the accounts department.

Budget Management Plan

The budget management plan requests inter-professional collaboration for effective management and execution of the plan. Research has also suggested that positive inter-professional collaboration significantly affects the execution of healthcare projects (Schmidt et al., 2021). In the current budgeting process, I aim to collaborate with the finance director, head of accounting, and administration director to help me gather the previous trends, approve my budget, and initiate the process. I would collaborate with an outsourced vendor selected through a protocoled procedure for the construction. The administration director will also oversee the implementation process, while the IT department head will be responsible for providing bandwidth availability and technological support. The maintenance team will collaborate to provide maintenance services.

Budget management is based on the assumption that proper planning, monitoring of expenses, and deadline management help evaluate the efficacy of the work. Methods of cost reduction will be utilized for the purpose of cost control. These will consist of the identification and execution of measures designed to minimize costs while maintaining the status quo. Identifying, analyzing, and correcting budget variances, such as reducing expenses and changing the change strategy, is crucial for cost control. 

Impact of Capital Acquisition on Financial Health

Initially, the renovation would put a financial strain on the organization as it would incur immediate expenses. It can impact the organization’s cash flow while reducing liquidity in the short term. However, it has a long-term return on investment effect as it aims to reduce turnover, ultimately reducing the cost of hiring and training new employees. This cost can be further utilized for increasing wages and providing monetary benefits to the staff, another way to reduce turnover rate and increase staff productivity (Awosoga et al., 2023).

Additionally, it works on providing better financial stability for the organization to compete with market trends. The current budget estimates a 50% return on investment through estimating the benefits with the total cost of the changes within the first six to eight months to recover the renovation cost. However, the depreciation values such as asset description, replacement or maintenance cost and tax implementation. It require to be analyzed to implement an effective financial budget that can help the organization to develop informed decisions. 

References 

Awosoga, O. A., Odole, A. C., Onyeso, O. K., Ojo, J. O., Ekediegwu, E. C., Nwosu, I. B., Nord, C., Steinke, C., Varsanyi, S., & Doan, J. (2023). Perceived strategies for reducing staff-turnover and improving well-being and retention among professional caregivers in Alberta’s continuing-care facilities: A qualitative study. Home Health Care Services Quarterly, 42(3), 193–215. https://doi.org/10.1080/01621424.2023.2166889 

Bosch-Badia, M.-T., Montllor-Serrats, J., & Tarrazon-Rodon, M.-A. (2020). The capital budgeting of corporate social responsibility. Sustainability, 12(9), 3542. https://doi.org/10.3390/su12093542 

Dash, S., Shakyawar, S. K., Sharma, M., & Kaushik, S. (2019). Big data in healthcare: Management, analysis and future prospects. Journal of Big Data, 6(1), 54. https://doi.org/10.1186/s40537-019-0217-0

Karaferis, D., Aletras, V., Raikou, M., & Niakas, D. (2022). Factors influencing motivation and work engagement of healthcare professionals. Materia Socio-Medica, 34(3), 216–224. https://doi.org/10.5455/msm.2022.34.216-224 

Maassen, S. M., van Oostveen, C., Vermeulen, H., & Weggelaar, A. M. (2021). Defining a positive work environment for hospital healthcare professionals: A Delphi study. PLoS ONE, 16(2), e0247530. https://doi.org/10.1371/journal.pone.0247530

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Mollah, A. S., Rouf, A., & Rana, S. M. S. (2021). A study on capital budgeting practices of some selected companies in Bangladesh. PSU Research Review, 7(2), 137–151. https://doi.org/10.1108/PRR-10-2020-0035 

Pedrosa, A. L., Bitencourt, L., Fróes, A. C. F., Cazumbá, M. L. B., Campos, R. G. B., de Brito, S. B. C. S., & Simões e Silva, A. C. (2020). Emotional, behavioral, and psychological impact of the covid-19 pandemic. Frontiers in Psychology, 11. https://www.frontiersin.org/articles/10.3389/fpsyg.2020.566212

Schmidt, J., Gambashidze, N., Manser, T., Güß, T., Klatthaar, M., Neugebauer, F., & Hammer, A. (2021). Does interprofessional team-training affect nurses’ and physicians’ perceptions of safety culture and communication practices? Results of a pre-post survey study. BMC Health Services Research, 21(1), 341. https://doi.org/10.1186/s12913-021-06137-5 

Zhenjing, G., Chupradit, S., Ku, K. Y., Nassani, A. A., & Haffar, M. (2022). Impact of employees’ workplace environment on employees’ performance: A multi-mediation model. Frontiers in Public Health, 10, 890400. https://doi.org/10.3389/fpubh.2022.8

Appendix 

Table 1a: 

Showing the Expense category and the Amount Required for the Expense. 

Categories 
Amount required ($)
Expenses of construction (lockers, bathrooms, and cupboards/shelves)  400,000
Infrastructural changes (Couches, Table, chairs, bookshelves, mats, etc.) 200,000
Labor expense  175,000
IT development expense (installation of biometrics, desktops, and other machinery.)  250,000
Maintenance charges (AC, water dispenser, and vending machine maintenance)  90,000
Hygiene management  charges (dispensers, sanitizers, scrubs, soaps, etc.) 50,000
Miscellaneous  60,000
Total 
1,225,000