Explanation of the Monthly Budget
A variance report is a report where it demonstrates and compares the cost for our hospital. This reports shows what the budget was estimated for, the actual amount spent, and the variance. The variance means what we profited in or lost. I work in one the few bigger hospitals as a finance manager. There was recently a tornado that killed eight people, destroyed over a couple dozen homes, and injured about hundred people. Obviously, this was an unexpected event that had impacted my budget. Many of these patients did not have medical insurance, therefore, we were not receiving as much profit as we were losing. Even though my Vice President was aware of the tornado he asked me to explain and write out a variance report on why we went over our allowed budget. I wrote a letter of explanation for our Vice President which gives details on why did not meet our budget.
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The reason why I bring the tornado into this is because, our emergency room was filled with people who got hurt in some way or another. These patients injuries vary anywhere from a minor concussion, to broken bones, to actually needing some type of surgical procedure. With our emergency room filled with people who were coming in and out more employees had to be called into work. We had over 50 percent more employees working than we normally do. Since there was more patients needed to come in to make sure they were healthy we needed more employees to cover this. This also means that employees that were already schedule to work, worked longer shift hours than what was estimated by the budget. For example, our surgeons were estimated to cost the hospital 40,000 dollars this month and because more surgeons had to come in and work longer hours they cost us 65,000 dollars.
Also, the supplies cost was lower than what was budgeted. The budget was estimated around 45,000 with supplies left over at the end of the month. At the end of the month there was way less supplies left over then there was expected to be. A lot more patient’s needed to stay in the hospital for longer periods of time due to observation. This meant that we were using more supplies to help with the health of these patients. These patients were a priority to the hospital even though some of them did not have insurance. They were already going through a lot emotional toll, we made sure that they were comfortable. With more patients in the emergency room more supplies were needed. We also had to make more room for these patients and beds were borrowed. For example, the need for needles double in this month. Even though this may seemed like it might not be a lot everything adds up. When they patients were kept for observation more supplies and equipment were used. One thing that also made our budget not be successful is because a lot of our medical machines weren’t updated and a few of them broke by over use. We had to purchase news one to be able to perform many duties. What really hurt us is that a lot of these patients were not expecting to come to the hospital which means they did not have insurance. This meant that even though we had more patients which could mean more business, we weren’t able to collect assets.