Managerial Account

Managerial Account

Unit 2 IP Stephanie White case

Introduction

The main concern of Dr. Stephanie White Uptown Clinic chief Administrator was on dealing with reduction of the net year budget and predictable future of the clinic. This clinic offers services to the community and Dr. Stephanie wants to increase service along with reduction in the budget. In such cases, those cost must be reduce which has capacity of reduction and without which the clinic can continue with their function without any affect on it.

With the available data of last year, I would be offering Dr. Stephanie a dollar range of cost for reducing the budget. After that, I would be deducting $94,000 from those things which does not have any impact on the quality and operation of the healthcare services. Lasting, I would be offering my views regarding preparation of budget reduction.

Program Area

Cost

Proposed Cuts

Administration:

 

 

Salaries

 

 

Administrator

$ 60, 000

Assistant

$ 35, 000

Two secretaries

$ 21, 000

$ 21, 000

Supplies

$ 35, 000

Advertising and Promotion

$ 9, 000

Professional meetings/dues

$ 14, 000

 

Purchased Services:

Accounting and billing

$ 15, 000

Custodial and maintenance

$ 13, 000

Security

$ 12, 000

Consulting

$ 10, 000

Community mental health services:

Salaries (two social workers)

$ 46, 000

Transportation *

$ 5, 000

$ 5, 000

 

Outpatient mental health treatment

Salaries:

Psychiatrist

$ 86, 000

Two social workers

$ 70, 000

Totals

$ 363, 000

$ 94, 000

Analysis of Worst Case

If the above Proposed Cuts is implemented, Uptown Clinic can save up to $94,000. But, some of the Proposed Cuts might seriously impact on the delivery services by health centre. This do not appear to be so heavy in the budget to start with and elimination of such items like social workers transportation which means that in emergency people of community have to come with their own transport which might reduce their healthcare service. Reducing professional development meeting will also results in reducing quality staff.

Reduction in advertising and promotion will also impact on the centre as they are looking to increase their services. Removing consultancy services means that patients would not be able to discuss their unique problems with the doctors. Maintenance & Custodial elimination would also negatively result in future as various facilities would not be offered to their patients. Lastly, reduction in the administrative assistant and one secretary will result in high burden pressure which will increase the chances of error in the functionality of the clinic. The highlighted cost might reduce the total cost but would adversely affect the clinic. Hence, the end cost would be $363,000 (Dr Carl S, Dr James, Jonathan E., 2011).

Analysis of Best Case

As similar function can be performed by the secretary and assistant, so assistant and 1 secretary can be eliminated which will reduce the total salary. Elimination of Advertising, meetings &consulting would also reduce the cost as people do not usually give these things many considerations. Reduction in transportation and social worker along with the outpatient services are important so half would be reduced and 25% reduction in supplies. The following are given more consideration:

Costs

Proposed cuts

Advertising & Promotion

$ 9, 000

Professional Meetings/dues

$ 14, 000

Transportation

$ 5, 000 ...