1. Golway, Mary MSN, RN-BC

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My organization's fiscal year ended recently. Within a few weeks, I received an e-mail from my vice president congratulating me. My department's end of fiscal year report was attached to the e-mail, and she commented on the good job I did keeping expenses under control and sticking to the budget.


It was nice to receive the compliment, but rather than just taking a cursory glance at the report and enjoying the positive feedback, I decided to look at it more closely for accuracy. Since I look at my variance reports on a regular basis, I didn't expect any surprises, but I did discover a few things in the report that didn't make sense to me.


As a nursing professional development (NPD) leader, what would you have done? How often do you do a deep dive into your department's finances? Gone are the days when it was acceptable to prepare an annual budget and then do an occasional financial status check. In today's healthcare climate, nursing leaders must be proactive about change, and they must frequently review the financial status of their department-or their programs (Rosenthal & Stilgenbaur, 2015).


The American Organization of Nurse Executives core competencies for nurse executives and nurse managers each has a section related to financial acumen (American Organization of Nurse Executives, 2015). Still, many nurse leaders and NPD practitioners may feel ill-equipped to manage finances and budgets. When it comes to managing fiscal resources, here are some of the basic universal concepts that you should know as an NPD leader:


1. Identifying proper resources neededThe resource needs for NPD can be summed up simply as, "What resources do you need to get your job done?". Be sure to consider all of the potential resources when preparing a budget, whether it is for a department, a program, or a singular project. Resources can be grouped into three primary categories: environmental needs, equipment needs, and personnel needs. Environmental resource needs include physical space for offices and meeting rooms and the facilities cost for resources such as electricity, air conditioning, and heat. When considering equipment needs, things like mannequins, training supplies, and audiovisual equipment easily come to mind. Do not forget, however, about books, software, computer equipment, office needs, and other equipment. Personnel resources are often the largest cost to the education and training department. These include full-time, part-time, as-needed staff, and contracted personnel, such as program instructors and consultants. Additional considerations for personnel costs are fringe benefits in the form of leaves, taxes, Family and Medical Leave Act events, workmen's compensation insurance, medical and dental insurance, pension, and other benefits.


2. Understanding organizational culture and levels of authority* As an NPD practitioner and leader in your organization, you should know the answers to certain questions such as:* Is the budget process participatory, or is it done centrally by a body such as the finance department or executive team?* What is the procedure for budget setting and approval and for making subsequent changes?* Are there different levels of signatory authority (usually based on dollar amount) for purchases, invoices, and contracts? If so, what are they?* If decisions are made outside my department that may affect the operating expenses and resources of my department, how are they communicated?


3. Planning a budget and navigating the budget processAn organization's overall budget can be broken down into the following components: operating budget, capital budget, and contingency or emergency budget. Usually, the individual departments within an organization manage their own operating budget, which is a detailed projection of the department's expected income and costs (Strickler, 2012). Capital and contingency budgets are generally managed at the organization-wide level.There may be a defined time frame to formally prepare and submit the budget for the coming year, but in reality, as an NPD leader, you should always be evaluating needs and changes. As a leader, if you stay on top of your current finances and continually forecast future needs, budgeting for an upcoming cycle will be easier.When planning a budget and navigating the process, don't procrastinate and don't get caught off guard! Make sure you allow yourself enough time to be accurate and complete in the planning. Make sure you involve your team in the process and engage them to help you anticipate needs and changes.


4. Managing revenue and expensesNPD leaders work in a wide variety of settings. Some manage both revenue and expenses in their budgets. Examples of revenue sources include registration for programs, grants, sponsorships and exhibits, publications, and fees to award contact hours for continuing education. In evaluating finances, these leaders may be comparing costs to revenue.For many NPD leaders, their department(s) may be nonclinical and non-revenue generating. When managing fiscal resources in that environment, the leader will not be comparing costs to revenue. Rather, he or she will be managing actual expenses as compared to projected expenses. The goal is to keep the actual amounts close to the projected amounts and to explain any variances.


5. Return on investment of educational programsIn a recent gathering of healthcare chief financial officers, a key focus was on identifying return on investment (ROI) for internal programs, projects, and services (O'Brien, 2018). In most healthcare organizations, the NPD department generates little or no revenue. So how can we, as leaders, show our financial value, our ROI? Sometimes the ROI of professional development can be quantified in actual cost savings (reduced turnover, increased retention, improved patient outcomes). Other times, it can be quantified in actual revenue (value-based reimbursement, ability to open a new service, or build upon an existing service). And, at times, we can show our value in nonfinancial returns (increased staff satisfaction, achieving certain benchmarks, awards or recognition). ROI calculations not only help us demonstrate value but can also help in deciding when a program should be retired. Calculating ROI is time-consuming and can be daunting, but it is important. Enlist help from others such as your quality and finance departments as much as possible. The Association for Nursing Professional Development offers several tools on its website ( to help with calculating ROI.


6. Importance of collaboration and transparencyRosenthal and Stigenbauer (2015) stress the value of a collaborative relationship between financial and nursing leaders. They discuss the importance of nurse leaders being comfortable with the language of finance and the ability to translate their operations into words that make sense to the financial leaders.In addition, they stress that the understanding of each other's work environments should be mutual. Some of their suggestions to build collaboration and understanding are monthly meetings between nursing and finance leaders and joint rounding to allow the finance department members to observe firsthand the environment of nursing and patient care.



Preparing budgets and managing fiscal resources can be challenging and time consuming. But, like many other things, the more you do it, the easier it gets. The next edition of JNPD (March/April 2019) will mark the 35th anniversary of the Journal. As NPD practitioners, we have come a long way in the past 35 years. To stay relevant in today's healthcare climate and to lead change for the future, it is imperative that we become more proficient and reliable when it comes to the finance and business side of health care. The leadership column in the edition will honor our past, celebrate our present, and envision our future.




American Organization of Nurse Executives. (2015). AONE nurse leader competencies. Retrieved from[Context Link]


O'Brien J. (2018). 4 Observations from the 2018 healthleaders CFO exchange. Health Leaders Media. Retrieved from[Context Link]


Rosenthal N., Stilgenbauer D. (2015). Demystifying finance in perioperative nursing. OR Nurse, 9, 10-14. [Context Link]


Strickler J. (2012). Learning the language of finance. Nursing, 42(10), 45-48. [Context Link]