Part 10: More Budget Secrets
Budgets are done initially as computer-modeled projections based on previous performance. What that means is that the computer looks at what was spent and models a budget for the next cycle based on that amount. Thus, if you spend less, you will get less. It's pretty weird, but it reflects the belief that you do not need as much as was allocated.
In the real world, while all budget line items are examined, the greatest focus is placed on staff costs, followed by supply costs. I work very hard to keep those two in line. But for other line items, I have a policy of not only spending every penny, but of going over five to ten percent every year. That is often not enough of a variance in these areas to attract much attention and it allows me to be allocated just a little more next year. This strategy allowed me, over several years, to develop a few subaccounts with money I could use in various ways to the benefit of my staff and the unit. I call this "creative accounting..."
Believe me, I learned this strategy the hard way by being very attentive to budget limits and staying just under budget across the board...only to be allocated less the following year! In general, as managers you should spend up to...and even slightly over...the limit for line items (other than salaries and patient supplies, of course). I even suggested to my managers when I was the CNE (though I deny I ever said it!) that they do so as it helps all the nursing units. Sometimes, there will even be money left over in various subaccounts.
Whether or not you will be able to use the money left over toward something else is a question you will need to find out from your organization. Some allow the transfer of funds from one subaccount to another and this should certainly be explored as it will allow you to spend the money where it is most needed. Even if this is not possible, I would spend all I could on, for example, journal subscriptions, because it will tell your staff you are interested in their growth as professionals. Using the funds for books and creating a unit-based library of reference books is often another way to use subscription funds. There are truly many ways to develop creativity in managing the budget!
In most of my facilities I was able to move money from one account to another through an interaccount transfer and that helped me pool funds for different purposes. I also worked directly with finance to create new subaccounts and transferred money into them from other subaccounts. For example, there was no account for journals and books and I was able to create one so staff could have resource books and current journals available on the units.
Another example was the staff request for new lockers, to which I believed they were entitled to keep their things safe. However, in total the lockers would have cost much more than $1000, putting them in the category of a capital request, which I knew would never be approved. The cost was also more than I could authorize at the time as a nurse manager, as my signing authority was limited to $1000 and my director would have had to approve the purchase, which she would not have done. So I ordered them but used the subaccount of minor equipment (which was for beepers and cell phones and the like), ordering six at a time and doing that every couple of months until everyone had a new locker.
Managers (and even administrators) have spending limits on what they can purchase on their signature alone. Going above that figure requires the signature of a higher-level manager. As I have no interest in bringing some of my activities to their attention, I am always below that number. So, if my limit is $1000, I may have three or four orders for $900. I share this with the vendors and ask for bills or invoices for those numbers and they always comply...they also know the game!