UMGC Operating Budget paper

Instructions

                            UMGC Operating Budget

Imagine you are a clinical manager of UMGC Health Care primary care services and in charge of developing a projected annual operating budget.

Your budgetary figures are as follows:

For fiscal year 2017 and 2018, your clinic received $3 million from the government as fee-for-services reimbursements, as well as $1.1 million from private payers. The clinic has an annual fund-raiser that historically brings in $180,000 and a grants department that brings in $1.2 million annually.

Your chief financial officer (CFO) has provided you with the following annual expenses:

UMGC Health Care Annual Expenses:

Annual salaries - $1.5 million

Annual benefits - $ 240,000

Annual rent - $ 960,000

Annual insurance - $ 45,000

Annual depreciation - $ 780,000

Annual overhead - $ 180,000

Annual supplies - $60,000

Using the UMGC Health Care Operating Budget template, complete a 12-month operating budget in which you include the net profit (loss).

Write a 350- to 700-word executive summary that explains to the board of directors how you developed the budget and its importance.

Include the following in your summary:

• Explain the process for creating an operating budget and its importance.
• Explain how revenues and expenses are grouped for planning and control in the financial statements.
• Explain the differences between cash and accrual financial systems.