Budgeting Basics and Beyond

24.15. Budgeting Aspects for Specific Nonprofits

Voluntary Hospitals

Voluntary hospitals report:

• Patient service revenue—revenue that is directly related to patient care

• Other operating revenue—revenue that is indirectly related to providing patient services, such as tuition from educational programs, cafeteria revenue, parking fees, gift shop revenues, and research grants

• Nonoperating gains and losses—transactions that are incidental to operation from events beyond management's control; examples include general contributions, income from investments, rents, unrestricted income from endowment funds

Revenue is subdivided as to public support and revenue.

• Public support is the conveyance of property without consideration. Examples are contributions, gifts, grants, and bequests.

• Revenue is the conveyance of property for a specific consideration such as membership dues and interest income.

The fund groups for voluntary hospitals are:

• General (unrestricted) funds, which comprise:

  • Operating funds—resources for routine hospital activities, including plant assets and related long-term debt

  • Board-designated funds—resources set aside for specific use

• Restricted funds, which comprise:

  • Specific purpose—resources restricted for specific operating purposes

  • Endowment—principal remains intact; earnings may or may not be available subject to donor restrictions

  • Plant replacement and expansion—resources restricted for plant and equipment acquisition

Hospital budgets must respond to the expected level of ...