ESTABLISH A BUDGET Financial Management
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ESTABLISH A BUDGET
Financial Management - extracted text
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Training for Health Committees and Health Staff at Health Unit Level
I
•'-i
ESTABLISH A BUDGET
Financial Management
PARTICIPANT GUIDE
o
unicef
Training for Health Committees and Health Staff at Health Unit Level
ESTABLISH A BUDGET
Financial Management
PARTICIPANT GUIDE
unicef
Copyright © 1996
United Nations Children’s Fund
3 UN Plaza
New York, NY 10017
USA
The purpose of this training course is to improve the management of resources at health unit level
and to build the capacity of health committee members and health staff to work with communities.
The training course was developed by Dr Kasa Pangu and Dr Helene Gaumerais of the Health
Systems Development Unit with the technical collaboration of the Center For Effective Performance
(Atlanta, Georgia) and with the inputs from all the Unit’s programme staff. The Health Systems
Development Unit wishes to express its gratitude to the colleagues from other sections who gave
comments on the draft.
The design and content of the training course benefited greatly from the work undertaken by
participants from panel review meetings held in New York, including E. Alihonou, M. Bah, G.
Bukenya, B. Criel, K. Drame, J. Eshuis, H. Gorgen, M. Kader Konde, H. M. Kahssay, R.
Knippenberg, B. McPake, L. Mpande, K. Mukelabai, M. Murro, V. Oketcho-Oketh, I. Rizzo and A.
B. Touray.
The designations employed in this publication do not imply on the part of UNICEF the expression
of any opinion whatsoever concerning the legal status of any country or territory. Furthermore, the
training modules are intended to be practical tools for adaptation to country local situation and as
such have not been edited to the official publication standards of UNICEF, nor do they necessarily
reflect the policies or views of UNICEF.
All correspondence should be addressed to :
Dr Kasa Pangu
Senior Advisor
Health Section, TA-24A
UNICEF
3 UN Plaza
New York, NY 10017, USA
Phone:
Facsimile:
Internet:
212-824-6339
212-824-6462
kpangu © unicef.org
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Financial Management: Establish a Budget
Participant Guide
FINANCIAL MANAGEMENT: ESTABLISH A BUDGET
Introduction ............................................................................................................................... .. 3
Overview of Revenue and Expenditures.................................................................................. .. 3
Overview of Budgeting Process................................................................................................ .. 3
. .6
The Budget Form.................................................................... ................................................
..9
Step 1- Total Amount to be Budgeted (for Provisional Budgeting)
Step 1 - Total Amount to be Budgeted (for Forecast Budgeting)............................................ . .9
Step 2 - Determine Reserve Funds........................................................................................... . 16
Step 3 - Identify High and Low Priority Costs......................................................................... . 16
Step 4 - Determine Amount to Budget for High Priority Costs.............................................. . 18
.24
Step 5 - Determine The Amount to Budget for Low Priority Costs
.28
Step 6 - Check the Budget................................................
' "A i \
Step 7 - Determine Whether Money Remains After Budgeting (Provisional Budgeting Only) .28
Step 8 - Make Sure the Budget is Approved and Signed........................................................ .29
.29
Step 9 - Display and Present the Budget to the Community
Step 10 - Monitor the Budget................................................................................................... .29
.32
Performance Check
2
Financial Management: Establish a Budget
Participant Guide
FINANCIAL MANAGEMENT: ESTABLISH A BUDGET
Participant Notes
Introduction
A budget helps the health unit effectively manage
revenue and expenditures.
Establishing a budget is part of the participatory planning
process.
After you have estimated the costs for your workplan
activities, include them in your budget.
In this module, you will learn how to develop a budget
for your health unit. You will learn when to budget,
what to budget, and how to determine budgeted amounts
for different cost categories.
Overview of Revenue and Expenditures
• Revenue is money received from patients, donors, or
the government.
• Expenditures are expenses or payments.
Overview of Budgeting Process
• A budget is a financial plan for revenue and
expenditures for a given period.
• A budget is the amount of revenue allocated to
cover estimated costs of health unit activities.
• A budget helps the health unit effectively manage
revenue and expenditures.
• The budget enables the health unit and health
committee to plan how it will spend its money.
(continued)
3
Financial Mana^emeni: Establish a Budget
Participant Guide
• A budget helps the health unit and health committee
make sure that money is available for the most
important expenses, such as drugs and supplies.
• The budgeting period should correspond to the
planning period. For example, if the health unit is
planning activities for 1 July 1997 through 31
December 1997, the budgeting period should be for
the same six-month period.
• Budgeting should take place during the last
month of the current budgeting period. For
example, you may develop a budget in June for the
July through December budgeting period.
• There are two approaches for establishing a budget:
provisional budgeting and forecast budgeting.
• Provisional budgeting is based on available
revenue.
• Forecast budgeting is based on both available
revenue and expected revenue.
• When reviewing this Participant Guide, refer to the
sections and sample budget forms that are
appropriate to the type of budgeting your health unit
is doing.
• Use a budget:
to monitor expenses and make sure the health
unit does not spend more money than it has
to approve expenditures
• Steps for Establishing Budget:
1. Determine the total amount of money to be
budgeted.
2. Determine reserve funds.
3. Identify high and low priority costs.
(continued)
4
Participant Notes
Financial Mana^emeni: Establish a Budget
Participant Guide
4. Determine amount to budget for high priority
costs.
5. Determine amount to budget for low priority
costs.
6. Check the budget.
7. Determine whether money remains
budgeting (provisional budgeting only).
after
8. Make sure the budget is approved and signed.
9. Display and present the budget to the community.
10. Monitor the budget.
• The first step of budgeting is to determine the total
amount of money to be budgeted.
• The second step is to determine reserve funds. This
is the amount of money to set aside for unforeseen
events, such as an increase in prices.
• In the third step, you will identify the types of high
priority and low priority costs to include in the
budget.
— ' priority
‘
• High
costs; are expenditures that are
absolutely necessary for the health unit to function
properly; for example, essential drugs.
• Low priority costs are costs that are not absolutely
necessary for the health unit to function; for example,
incentive payments.
• For steps four and five, you will determine the
amount of money to budget for the high and low
priority costs.
• In step six, you will calculate the total costs. You
will make sure that the total costs do not exceed the
total amount to be budgeted minus reserve funds.
(continued)
5
Participant Notes
Financial Management: Establish a Budget
Participant Guide
• For provisional budgeting only, you will determine
whether money remains after budgeting during step
seven.
• In step eight, the health committee decides who will
review and sign the budget.
• In step nine, you will display and present the budget
to the community.
• In step ten, you will use the budget item expenditure
forms to approve expenses and to make sure that the
expenses do not exceed the amount budgeted.
• If you are doing forecast budgeting, you will also use
budget item revenue forms to regularly monitor
revenue collected.
The Budget Form
Refer to the appropriate budget form on the following
page.
6
Participant Notes
BUDGET FORM (Provisional Budgeting Example)
ERD
District:
Health Unit: Koulouro
Budget for the Period: 01 /Jan /97
To:
1) Total Amount to be Budgeted
Cash and Bank Book. $4,500
Expected Revenue
30 /June /97
Date.
15 Dec 96
$4.500
Total
$225
2) Reserve funds
3) High priority costs
3.1 Essential Drugs/Supplies (D)
3.2 Information Tools (I)
3.3 Fuel for cold-chain and sterilization (F)
3.4 Fuel for outreach activities (FO)
3.5
Workplan activities
3.5.1 Storage of drugs
3.5.2 Outreach
$2.000
$60
$100
$80
$78
$30
$48
3.6
3.7
3.5.3
Electricity (E)
Water (W)
$30
$25
3.8
Salaries (S)
$120
Total high priority costs
$2.493
....
4) Low priority costs
4.1 Workplan activities
4.1.1 Repair a ward
4.1.2
4.2 Allowances (A)
4.3 Office supplies (O)
4.4 Vehicle maintenance (V)
4.5 Building maintenance (B)
4.6 Cleaning supplies (C)
4.7 Replacement cost (R)
4.8
$920
Total low priority costs
5) Total high plus low priority costs
Signature
Signature
Health Unit Head Committee Chairperson
Panala
Conchetta
Date Budget Approved: 18 /January /97
Signature
Committee Treasurer
Mkamwe
Signature
District Medical Officer
Taluli
BUDGET FORM (Forecast Budgeting Example)
District:
Health Unit: Yangul ______________
Budget for the Period: 01 /Jan /97
To:
1) Total Amount to be Budgeted
Cash and Bank Book $300
Expected Revenue $4,920
URD
30 /June / 97
Date.
75 Dec 96
$5,220
Total
$255
2) Reserve funds
3) High priority costs
3.1 Essential Drugs/Supplies (D)
3.2 Information Tools (I)
3.3 Fuel for cold-chain and sterilization (F)
3.4 Fuel for outreach activities (FO)
3.5 Workplan activities
3.5.1 Storage of drugs
3.5.2 Outreach
3.5.3
3.6 Electricity (E)
3.7 Water (W)
3.8
$2,000
$60
$100
$80
$78
$30
$48
Salaries (S)
Total high priority costs
$2,493
....
4) Low priority costs
4.1 Workplan activities
4.1.1 Repair a ward
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.1.2
Allowances (A)
Office supplies (O)
Vehicle maintenance (V)
Building maintenance (B)
Cleaning supplies (C)
Replacement cost (R)
$920
Total low priority costs
5) Total high plus low priority costs
Signature
Signature
Health Unit Head Committee Chairperson
Pana Ia
Conchetta
Date Budget Approved: 18 /January /97
Signature
Committee Treasurer
Mkamwe
Signature
District Medical Officer
Taluli
Financial Management: Establish a Budget
Participant Guide
Step 1- Total Amount to be Budgeted
(for Provisional Budgeting)
• To determine the Total Amount to be Budgeted,
determine the available revenue (amount of money
remaining in the health unit and in the bank).
• Use the current total balance of the cash and bank
book to determine the available revenue.
• Write the amount in the Cash and Bank Book line
and in the Total line on the budget form.
• Indicate the date of the last cash and bank book entry
on the budget form.
Refer to the appropriate sample cash and bank book on
the following page.
Step 1 - Total Amount to be Budgeted
(for Forecast Budgeting)
• To determine the Total Amount to be Budgeted:
a. Determine available revenue (amount of money
remaining in the health unit and in the bank).
b. Determine expected revenue.
A. Determine Available Revenue
• Use the current total balance of the cash and bank
book to determine the available revenue.
• Write the amount in the Cash and Bank Book line
on the budget form.
• Indicate the date of the last cash and bank book entry
on the budget form.
9
Participant Notes w
Financial Management: Establish a Budget
Participant Guide
CASH AND BANK BOOK (Provisional Budgeting)
Name of District:
Oko
Month:
Description Budget
(transaction) Category
Bank
Name of responsible person:.
Ref
no.
Date
Yansul
Name of Health Unit:.
URD
Debit
(out)
December
11/12/96 Balance
brought
_______ forward
1996
Cash
Balance
Credit
(in)
Year:
Debit
(out)
Credit
(in)
Balance
Total
Balance
4,725
175
4,900
12/12/96 Payment of
drugs
______ chq 0009
D
400
4,325
175
4,500
002 13/12/96 Purchase of
office
_______ supplies
O
25
4,300
175
4,475
003 13/12/96 OPD receipts
80 -106
P
4,300
13
188
4,488
15/12/96 OPD receipts
107-131
P
4,300
12
200
4,500
001
004
Totals
Balance
carried
forward
10
Financial Management: Establish a Budget
Participant Guide
CASH AND BANK BOOK (Forecast Budgeting)
Oko
Month:
Description Budget
(transaction) Category
Bank
Name of responsible person:.
Ref
no.
Date
Yaneul
Name of Health Unit:.
URD
Name of District:
Debit
(out)
December
Year:.
1996
Cash
Balance
Credit
(in)
11/12/96 Balance
brought
_______ forward
Debit
(out)
Credit
(in)
Balance
Total
Balance
650
50
700
001 12/12/96 Payment of
drugs
____ chq 0009
D
400
250
50
300
002 13/12/96 Purchase of
O
25
225
50
275
office
____ supplies
003 13/12/96 OPD receipts
80 - 106
P
225
13
63
288
004 15/12/96 OPD receipts
107-131
P
225
12
75
300
Totals
Balance
carried
forward
11
Financial Management: Establish a Budget
Participant Guide
B. Determine Expected Revenue
Participant Notes
• There are two ways to estimate how much revenue
your health unit might collect during the upcoming
budgeting period:
1. Use information about average attendance and
user fees to calculate expected revenue.
2. Use information about total revenue collected in
the past.
• Use the first method because it shows which services
are generating the most revenue. It also helps you
identify where improvements may be needed.
• Use the second method if you are unable to obtain
accurate information about patients attendance
because:
Patient registers are not available.
Health workers do not differentiate between new
cases and reattendances.
Health workers do not record which patients are
exempt from paying for services.
• Add to the expected revenue any type of
development funds (e.g., donations from
organizations) expected during the budgeting period.
Method 1 - Calculate Expected Revenue Using
Information About Average Attendance and
User Fees
• Use a Total Expected Revenue Calculation Sheet
to estimate expected revenue. (See sample on page
14.)
12
Financial Management: Establish a Budget
Participant Guide
• You can attach the worksheet to your budget to
justify the estimated expected revenue.
1. For each health unit service that generates revenue:
a. Determine the average expected attendance on
a daily or weekly or monthly basis.
Refer to patient registers (e.g., from OPD
ward, maternity ward, inpatient ward,
laboratory) over a period of time to get
information about attendance.
For example, to obtain information about the
average monthly number of deliveries, look
at the patient register for the maternity ward
over a 12-month period. Total up the number
of deliveries and then divide the result by 12.
b. Determine the user fees for that service.
c. Determine the number of working days (or weeks
or months) in the new budgeting period.
d. Use the following calculation to determine the
expected revenue for that particular service.
average daily (or weekly or monthly) attendance
X user fees for that service X number of working
days (or weeks or months) in the new budgeting
period
2. Add the expected revenues for all individual services
to obtain the total expected revenue for the health
unit.
13
Participant Notes
Financial Management: Establish a Budget
Participant Guide
Total Expected Revenue Calculation Sheet
Health Unit
Service
OPD
Deliveries
Average Daily
Attendance
User Fee
Number of
Working Days
in Budgeting
Period
Expected
Revenue
(A)
(B)
(C)
(A) x (B) x (C)
30 new cases/
working day
$1/ consultation
154 working
days
$4,620
5/month
$10/delivery
6 months
$300
Total expected revenue
14
$4,920
Financial Management: Establish a Budget
Participant Guide
Example: A health unit that is budgeting for a six-month
period:
la.
The health unit receives on average:
- 25 new cases per working day for OPD
5 deliveries per month
- 30 mothers for prenatal visits per week
- 50 children per week for immunizations
lb.
User fees for OPD is $1 per consultation.
Deh very fees are $10.
Prenatal visits and immunizations are free.
1c.
154 working days (or 6 months) in the budgeting
period.
Id.
Expected revenue for OPD = 30 cases/day x $1
= $30/day.
$30/day x 154 working days of budgeting period
= $4,620.
Expected revenue for deliveries
deliveries/month x $10 = $50/month.
5
$50/month x 6 months = $300.
2.
Total expected revenue = $4,920 ($4,620 +
$300).
Method 2 - Calculate Expected Revenue Using
Information About Total Revenue Collected in
the Past
1. Determine average daily revenue:
a. Determine the total revenue collected during the
preceding budgeting period. Refer to the cash
and bank book for this information.
b. Divide the total revenue by the total number of
working days in the previous budgeting period.
(continued)
15
Participant Notes
Financial Management: Establish a Budget
Participant Guide
Step 4 - Determine Amount to Budget for
High Priority Costs
• Determine the amount to budget for the high priority
costs which are absolutely necessary for the health
unit to function properly and for each high priority
workplan activity.
• Follow these steps whenever you are determining the
amount to budget for high priority costs:
1. Determine how much of the item is needed
during the budgeting period.
2. Determine the unit cost of the item.
3. Multiply the quantity needed by the unit cost
to calculate the total cost
• You may use worksheets to help calculate the amount
to budget.
Refer to the sample calculation sheets that follow the
workplan.
• After you complete the worksheets, record the total
cost for each high priority cost in section 3 of the
budget.
18
Participant Notes \3|
WORKPLAN ACTIVITIES
PLANNING PERIOD: 01 January 97 - 30 June 97
By which date
should it be
completed?
Who should be
the person
responsible?
'Total Cost
What needs
to be done
With what
resources?
1. Repair
storage room
= $50
Clean out
storage room.
cleaning supplies
- available
] February 1997
Malcom Unanyo
Paint storage
room.
2 cans of white paint
$4
2 brushes
$2
15 March 1997
John Mashuka
Buy and install
shelves for
drugs.
2 shelving units
$10
box of 50 nails
- available
2 hammers
- available
15 April 1997
John Mashuka
Buy and install
lighting fixture.
1 light fixture and
bulbs
$10
30 April 1997
Malcom Unanyo
Install lock on
storage room
door.
1 lock with two sets
of keys
$4
15 May 1997
John Mashuka
1 June 1997
Malcom Unanyo
6 January 1997
Anna Maltubo
Store drugs in
new stock room
according to
expiration
dates.
2. Outreach =
$88 ($40 is for
fuel)
3. Repair a
ward = $45
Prepare
materials and
supplies for
prenatal care
for outreach.
materials/drugs/
supplies
Nurse begins
outreach once
a week
Travel allowances
for 24 weeks
$2/week = $48
Fuel cost
$40
13 January 1997
Jacob Kneyo
Paint ward.
10 cans of white
paint
$20
2 brushes
- available
15 March 1997
Sebo Emoli
Purchase 2
beds.
Beds
$12.50/bed = $25
15 April 1997
Sebo Emoli
- available
Financial Management: Establish a Budget
Participant Guide
Resupply of Essential Drugs and Supplies Calculation Sheet
Consumption/
Budgeting
Period
Unit Cost
Total Cost
Chloroquine
30 tins
$5.00
$150
Bandages
100 boxes
$0.50
$50
Folic acid tablets, 5 mg
25 tins
$4.00
$100
Acetyl salicylic acid tablets,
300 mg
20 tins
$2.50
$50
Item
Total Cost of All Essential Drugs and Supplies
♦Total Cost = Consumption/budgeting period x recent unit cost
20
$350
Financial Management: Establish a Budget
Participant Guide
Resupply of Information Tools Calculation Sheet
Consumption/
Budgeting
Period
Unit Cost
Total Cost
Prenatal cards
250 cards
$0.10
$25
Under-five cards
200 boxes
$0.10
$20
Stock inventory cards
200 cards
$0.05
$10
Receipt books
10 books
$0.50
$5
Item
Total Cost of All Information Tools
21
$60
Financial Management: Establish a Budget
Participant Guide
Total Cost of Fuel for Cold-Chain, Sterilization, and Outreach Activities
Calculation Sheet
1) Cold-chain and Sterilization:
Number of
Liters
Consumed
During Previous
Budget Period
(a)
Price Per Liter
of Fuel
Total Cost
(b)
(a) x (b)
Cold-Chain
150 liters
$0.50
$75
Sterilization
50 liters
$0.50
$25
Fuel
Total Cost of Fuel for Cold-Chain
and Sterilization
$100
2) Outreach activities:
Number of
Kilometer to be
Covered During
Budgeting
Period
Number of
Kilometers
Vehicle Can
Travel for Every
1 Liter of Fuel
Price Per Liter
of Fuel
Total Cost
(a)
(b)
(c)
((a) -e- (b)) x (c)
2,000 kilometers immunization
motorbike can
travel 25
kilometers for ever
y 1 liter offuel
$0.50
$40
$40
2,000 kilometers prenatal care
Total Cost of
Fuel for
Outreach
Activities
22
$80
Financial Management: Establish a Budget
Participant Guide
Total Cost of Salaries for Health Unit Calculation Sheet
Name
John Makaji (security guard)
Monthly
Salary
Number of
Months in
Budgeting
Period
Total
Salary
$20
6
$120
Total Cost of Salaries
23
$120
Financial Management: Establish a Budget
Participant Guide
Step 6 - Check the Budget
Participant Notes
• Calculate the total costs by adding the total high
priority costs and the total low priority costs.
• Write the total cost on the 5) Total high plus low
priority costs line of the budget form.
• Make sure that the total costs do not exceed the
total amount to be budgeted less the reserve funds
Total high plus low priority costs <. Total
amount to be budgeted - reserve funds
• If your total costs are more than the total amount to be
budgeted less reserve funds:
1. Check your calculations.
2. Reduce the amount budgeted for some high and
low priority costs.
Identify alternative sources where you can
purchase budgeted items at lower unit costs.
3. Make sure you have looked at all possible sources
of income/revenue.
4. Investigate possibilities of raising funds.
Step 7 - Determine Whether Money
Remains After Budgeting (Provisional Budgeting
Only)
• To determine whether money remains after budgeting,
make the following calculation:
Total amount to be budgeted - Reserve funds Total high plus low priority costs = remaining
money
28
Financial Management: Establish a Budget
Participant Guide
• If there is a large amount of money remaining, you
may want to deposit it in a savings account at the
bank during the budgeting period. This is more
beneficial than having the money remain in the health
unit’s checking account.
Step 8 - Make Sure the Budget is
Approved and Signed
• The health committee members should decide who
will approve and sign the budget.
• The budget may be reviewed and signed by the
District Medical Officer.
• The budget should be approved during the first month
of the budgeting period.
Step 9 - Display and Present the Budget to
the Community
• After the budget is approved, display it in a visible
area so the community can view it.
• Present the budget to the community during
participatory planning meetings.
Step 10 - Monitor the Budget
• When you implement the budget, use the budget
item expenditure forms to approve expenses and to
make sure that the expenses do not exceed the
amount budgeted.
• If you are doing forecast budgeting, you will use
budget item revenue forms to regularly monitor
revenue collected during the period.
Refer to the sample Budget Item Expenditure Form
and Budget Item Revenue Form on the following
page.
29
Participant Notes \|||
Financial Management: Establish a Budget
Participant Guide
Sample:
Budget Item Expenditure Form
Amount Budgeted: S30
Category:. Vehicle Maintenance
Date
Descripti
on
Amount
Spent
Total Amount
Spent to Date
Balance
2 February
97
oil change
$10
$10
$20
10 March 97
spark plugs
$3
$13
$17
Budget Item Revenue Form
Category:.
Deliveries
Expected Revenue for: 1 Jan - 30 June 97 is
Date
Description
Amount
Collected
Total
Amount
Collected
to Date
Expected
Revenue Total Amount
Collected to
Date
2 Feb 97
1 delivery
$10
$10
$290
19 Feb 97
1 delivery
$10
$20
$280
03 Mar 97
1 delivery
$10
$30
$270
30
Financial Management: Establish a Budget
Participant Guide
• You will create a budget item revenue form for
each health unit service that will generate money.
Participant Notes
• You will create new forms for each new budgeting
period.
• Use the budget item revenue forms after you
establish your budget.
• The Category column corresponds to the type of
revenue/user charges for each health unit service
(e.g., fees for OPD consultation, fees for
deliveries, drug sales).
• The Expected Revenue for line conesponds to
the budgeting period and the amount of revenue
expected for the service.
• Use this form to determine whether the amount
of revenue is progressing as expected.
• You can consider how health unit services are
being implemented and identify problems with
the services if revenue is not progressing as
expected.
• After you establish the budget, use these forms to
check your past estimates of expected revenue.
Adjust the expected revenue for the upcoming
budget, if necessary.
• For example, if you estimated that the health unit
expects $600 in consultation fees for a budgeting
period, and they only collected $200, identify the
possible reasons for the discrepancy.
• Determine whether you have made a calculation
error when estimating the expected revenue.
• Or, there may have been other reasons for the
discrepancy, for example, a decrease in the
number of expected patients. This usually
happens during planting season when people have
less income.
TH
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Financial Managemeni: Establish a Budget
Participant Guide
PERFORMANCE CHECK
Do not begin the Performance Check until the facilitator has given you the instructions!
You will work in small groups to complete the Performance Check.
la. Read the following case scenario.
Case Scenario
You are developing a budget for the Buyinga health unit for the period 1 July 1997 to 31
December 1997. The health unit will stay open 154 days during the budgeting period.
For forecast budgeting only:
In patient registers, you have identified that Buyinga receives on average 40 new cases per
working day for OPD, 8 deliveries per month, 40 mothers for prenatal visits per month, and
80 children per week for immunizations.
User charges for OPD is $.50 per consultation (flat fee per visit). Delivery fees are $10.
Immunizations and prenatal visits are free.
The health unit receives one kit of drugs and vaccines from the Essential Drug Programme, but
they need to buy extra drugs and supplies each month for the approximative amount of $60 per
month.
You review the health unit’s stock of information tools, and determine that they will need 100
prenatal cards ($0.10/card) and 200 stock inventory cards ($0.05/card) during a 6 month period.
Buyinga has 6 full-time health workers on staff. Their salaries are provided by the government.
The cash and bank book indicates that each health worker receives monthly incentive payments
of $10.
While reviewing the cash and bank book, you also notice that each month, 20 liters of fuel is
used for the cold-chain and 10 liters of fuel is used for sterilization. The cost for 1 liter of fuel
is $.30. You also notice in the cash and bank book that each month, about $5 is spent on
electricity and about $4 is spent on water.
(continued on following page)
32
Financial Management: Establish a Budget
Participant Guide
Case Scenario (continued)
During the last 6 months, the health unit spent on: office supplies ($30), cleaning supplies
($18), vehicle maintenance ($18), building maintenance ($24), as indicated in the cash and
bank book.
During the last 6 months, 1,000 kilometers was covered during current outreach activities
for immunization using a motorbike. No additional outreach activities are planned for the
upcoming budgeting period. Vehicle log books show that the motorbike travels 25
kilometers for every 1 liter of fuel. The cost of 1 liter of fuel is $.50.
During recent participatory planning meetings, it was decided to restore die OPD waiting
area of the health unit by the end of April (cost = $50) and to build a latrine for the health
unit by the end of May (cost = $30).___________________________________________
lb.
Use the case scenario informadon, sample budget form, cash and bank book, and calculation
sheets on the following pages to develop a budget for Buyinga health unit. To help you
develop a budget, complete the following steps.
Step 1 - Determine the total amount to be budgeted:
Cash and bank book
Expected revenue (forecast budgeting only - use Total Expected Revenue Calculation
Sheet
Total___________
Step 2 - Determine reserve funds:
Total amount budgeted
x 5% =
Step 3 - Identify high and low priority costs:
Low Priority Costs
High Priority Costs
(continued)
33
Financial ManagemerU: Establish a Budget
Participant Guide
Step 4 - Determine amount to budget for high priority costs:
Use the calculation sheets on the pages following the Total Expected Revenue Calculation
Sheet and complete the table below:
Amount to Budget
High Priority Costs
Total high priority costs
Step 5 - Determine amount to budget for low priority costs:
Use the Calculation Sheet for Low Priority Costs.
Step 6 - Check the budget:
Total high priority costs
plus low priority costs
+ Total low priority costs.
= Total high
<. (Total amount to be budgeted
Total high plus low priority costs
reserve funds
)
Now, complete the budget form on the following page.
34
BUDGET FORM
District:
Health Unit:.
Budget for the Period:
To:
/
/
I
/
1) Total Amount to be Budgeted
Date
Cash and Bank Book
Expected Revenue
Total
2) Reserve funds
3) High priority costs
3.1
3.2
3.3
3.4
3.5
Workplan activities
3.5.1
3.5.2
3.5.3
3.6
3.7
3.8
Total high priority costs
4) Low priority costs
4.1
Workplan activities
4.1.1
4.1.2
4.2
---------
4.3
---------
4.4
------------------
4.5
---------
4.6
--------
4.7
4.8
Total low priority costs
-----------------------------------
5) Total high plus low priority costs
Signature
Health Unit Head
Date Budget Approved:
Signature
Committee Chairperson
I
/
Signature
Committee Treasurer
Signature
District Medical Officer
CASH AND BANK BOOK
Name of District:
Name of responsible person:.
Ref
no.
Date
Description
(transaction)
Buyinga
Name of Health Unit:.
Kinwa
Month:
Dubola
Budget
Category
June
Debit
(out)
Credit
(in)
Balance
Debit
(out)
Credit
(in)
1,470
65
1,465
65
1,440
30
95
1,470
1,375
10
105
1,480
1,375
20
125
1,500
001
17/6/97
Payment for
fuel for cold
chain
F
002
17/6/97
Purchase of
office supplies
O
003
17/6/97
Delivery
receipts
90-92
DL
1,375
004
18/6/97
OPD receipts
117- 136
OP
005
20/6/97
OPD receipts
137 - 176
OP
1,400
25
Balance
Total
Balance
70
1,400
Balance
brought
forward
Balance
carried
forward
1997
Cash
Bank
15/6/97
Totals
Year:.
$5
1,375
Total Expected Revenue Calculation Sheet
Health Unit
Service
Average
Daily/Weekly/
Monthly Attendance
User
Fee
Number of
Working
Days/Weeks/Months
in Budgeting Period
Total expected revenue
Expected
Revenue
Resupply of Essential Drugs and Supplies Calculation Sheet
Item
Consumption/
Budgeting Period
Unit Cost
Total Cost of All Essential Drugs and Supplies
•Total Cost = Consumption/budgeting period x recent unit cost
*Total Cost
Resupply of Information Tools Calculation Sheet
Item
Consumption/
Budgeting Period
Unit Cost
Total Cost of All Information Tools
•Total Cost = Consumption/budgeting period x recent unit cost
•Total Cost
Total Cost of Fuel for Cold-Chain, Sterilization, and Outreach
Activities Calculation Sheet
1) Cold-chain and Sterilization:
Fuel
Number of Liters
Consumed During
Previous Budget
Period
Price Per Liter of
Fuel
Total Cost
(a)
(b)
(a) x (b)
Cold-Chain
Sterilization
Total Cost of Fuel for Cold-Chain
and Sterilization
2) Outreach Activities:
Number of
Kilometer to be
Covered During
Budgeting Period
Number of
Kilometers Vehicle
Can Travel for Every
1 Liter of Fuel
Price Per
Liter of Fuel
Total Cost
(a)
(b)
(c)
((a) + (b)) x (c)
Total Cost of
Fuel for
Outreach
Activities
Total Cost of Incentive Payments for Health Unit
Name
Monthly
Incentive
Number of
Months in
Budgeting
Period
*Total
Incentive
Total Cost of Incentives
*Total Incentive Payments = Monthly incentive payment x number of months in budgeting
period
Calculation Sheet for Low Priority Costs
Item
Consumption/
Budgeting Period
Unit Cost
Total low priority costs
Total Cost
Financial Management: Establish a Budget
Participant Guide
2. Answer the following questions about the completed budget:
a. Does money remain after budgeting? If so, what should Buyinga do with the money?
(Only answer if doing provisional budgeting.)
b. How should Buyinga monitor the budget after it is established?
3. Ask a facilitator to review and approve your budget.
43
Financial Management: Establish a Budget
Participant Guide
PLENARY DISCUSSION
While you are waiting for the plenary discussion, think about the
following questions:
Which sections of the budget form were the most difficult to
complete?
What can help you identifying high and low priority costs?
Why is it important to include reserve funds in the budget?
How will you monitor your health unit’s budget?
44
I
»
Health Systems Development Unit
UNICEF House
3 United Nations Plaza
New York, NY 10017 - USA
Fax: 212-824-6462
Community
participation
Monitoring and
service delivery
Management of
staff and
equipment
Drug/supply
management
Financial
management
1. Apply basic
communicahon skills
2. Conduct community
diagnosis
3. Organize and
suppon health
committee
4. Establish
relationships with
community leaders,
local organizations, and
authorities
5. Conduct
participatory planning
1. Monitor and
evaluate at the health
unit level
2. Monitor and
evaluate at the
community level
3.Organize delivery of
services
1. Hire and manage
support staff
2. Ensure training of
health unit personnel
3. Maintain equipment
and health unit facility
1. Store supply and
establish inventory
procedures
2. Order and procure
3. Receive and inspect
4. Monitor daily and
monthly inventory
1. Establish prices and
exemptions systems
2. Manage revenue and
expenditures
3. Establish a budget
4. Audit health unit financial
records
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