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CHFM Finance and Administration
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Terms in this set (59)
What does the acronym FTE stand for?
Full Time Equivalent
What are the number of hours that make up an FTE?
40 hours per week; 2080 hours per year
40 hours per week x 52 weeks = 2,080 hours
What are budgeted hours?
Budgeted hours are estimated hours that an employee works per pay period in a particular assignment restricted by the planned expenditure for a fiscal year.
How is overtime defined?
Overtime is defined as greater than 40 hours per week or greater than 2,080 hours per year.
Who is eligible for overtime under the Fair Labor Standards Act (FLSA)?
Non-exempt Employee
Exempt employee (salaried, not eligible for overtime) Non-exempt employee (eligible for overtime) eligibility, recordkeeping and child labor standards affecting full-time and part-time workers The Fair Labor Standards Act (FLSA) is a federal law which establishes minimum wage, overtime pay sector and in federal, state and local governments.
What is the definition of productive
Productive time includes actual hours worked. This includes training hours, overtime hours, meeting time, work order entry time, field service work, etc.
What is the definition of non-productive time?
Non-productive time includes vacation time or paid time off (PTO), sick time, holidays and leave of absence.
How many paid FTE's would be required for two eight hour shifts for seven days assuming 10% non-productive time?
3.08 FTE's
2 employees x 8 hours x 7 days=112 hours
112 hours x .10 non-productive hours = 11.2 hours
112 hours + 11.2 hours 123.2 hours
123.2 hours /40 hours per week= 3.08 FTEs
List what is included in capital costs.
Equipment cost
Renovation cost
New construction cost
Organizations set a capital threshold to determine between capital and operating expense. This threshold varies by institution
List what included in operating costs.
Salaries & benefits
Utilities cost
Supplies
Service contracts
Repairs & maintenance
What is the formula for Facility Condition Index (FCI) that is used to demonstrate the financial efficiency of a building repair or renovation?
FCI = Sum of Deficiencies or Necessary Repairs
Current Replacement Value ($)
How do you calculate Facility Condition Index (FCI) if your needed repairs are $4 million and the current replacement value is $20 million?
$4,000,000 in needed repairs = FCI .20 or 20%
$20,000,000 in current replacement value
FCI= Sum of Deficiencies or Necessary Repairs ($)
Current Replacement Value ($)
Identify all components of the following formula:
LCC = C+ M + E+R-S
LCC - Life-Cycle Cost
C- Capital cost
M - Sum of all yearly scheduled operation and maintenance costs
E- Energy cost
R- Sum of all repair and equipment replacement cost over the life of the system
S- Salvage or trade in value
THE LEGEND OF CAPTAIN COST
Captan Cost had a Mop and was full of Energy to Repair his boat but not much could be Salvaged after the last storm
Capital Cost + Maintenance + Energy Repair - Salvage = Life-Cycle Cost
What is the formula for simple payback period?
Simple
Payback = Investment Cost Period Periodic Cash Flow
(savings per year)
Simple payback period of time required to recoup the funds expended in the investment
What is the formula for simple Return on Investment (ROI)?
Savings - Initial Investment ROI = Initial Investment ROI is a simple ratio of the gain from an investment relative to its cost, usually expressed as a percentage
What is the ROI for a new energy saving program that is expected to cost $500,000 over the next five years and deliver $175,000 in energy savings per year?
$875,000 $500,000 =.75 or 75% ROI $500,000 Formula: Sum of Deficiencies or Necessary Repairs ROI = Current Replacement Value ($)
the square footage is 100,000? What is the utilities cost per square foot if utility costs are $500,000 and
$500,000 $5 per sq. ft. 100,000 sq. ft. Formula: Total Energy Cost ($) Utilties cost per sq. ft. = Square Footage
What are the consumption measurements for benchmarking electricity ?
Kilowatt Hours (kWh) Gross Square Footage (GSF)
What are the consumption measurements for benchmarking natural gas?
Therms Gross Square Footage (GSF)
What are the consumption measurements for benchmarking total energy?
BTU Gross Square Footage (GSF)
What is the conversion of kWh to BTUS?
1 kWh = 3,412 BTUS
Convert 1000 kWh to BTUS.
1,000 kWh X 3,412 BTUS = 3,412,000 BTUS
Convert 50 therms of natural gas to BTUS. (One natural gas therm = 100,000 BTUS)
50 therms x 100,000 BTUS = 5,000,000 BTUS
Identify the following component (LCC) from the formula below: LCC = C+M+E+R-S
LCC - Life-Cycle Cost
Identify the following component (C) from the formula below: LCC = C+M+E+R-S
C- Capital cost
Identify the following component (M) from the formula below: LCC C+M+E+R-S
M - Sum of the yearly scheduled operations and maintenance costs THE LEGEND OF CAPTAIN COST
Identify the following component (E) from the formula below: LCC = C+M+E+R-S
E - Energy cost THE LEGEND OF CAPTAIN COST
Identify the following component (R) from the formula below: LCC = C+M+E+R-S
R- Sum of all repair and equipment replacement costs over the life of the system tHE LEGND or CAPTAN COST
Identify the following component (S) from the formula below: LCC = C+M+E+R-S
S- Salvage or trade-in value of a system in the final year of the life- cycle period THE LEDEND or CAPTAN aY
A new BAS will save $25,000 in energy costs per year. If the system costs $100,000 to purchase and maintain, what is the simple payback?
$100,000 = 4 years $25,000 Simple Investment Cost Payback = Period Periodic Cash Flow (savings per year)
What is ROI?
Return on Investment
Simple ROI works well in which situations?
Simple ROI works best where both the gains and cost of an investment are easily known.
All things being equal, the investment with the higher ROI is the better investment. True or false?
True. The investment with the higher ROI is the better investment.
Does simple ROI address risk?
No. Simple ROI does NOT address risk.
Simple ROI is from an action divided by the cost of that action. True or false?
True. Simple ROI is from an action divided by the cost of that action. ROI is a simple ratio of the gain from an investment relative to its cost, usually expressed as a percentage.
How many BTU'S are there in one natural gas therm?
100,000 BTU'S therm= 100,000 BTU'S
What is the total energy, in BTU'S, of 50 therms of natural gas and 1,000 kWh of electricity?
5,000,000 BTU'S + 3,412,000 BTU'S = 8,412,000 BTU'S kWh 3,412,000 BTU'S
How many hours in a standard week will a .9 FTE work?
40 hours x .9 = 36 hours Productive Time + Non-Productive Time Paid FTE = 40
How many hours in a standard week will a 1.0 FTE work?
40 hours x .9 = 40 hours Productive Time + Non-Productive Time Paid FTE = 40
How many hours will a .6 FTE, .8 FTE and 1.0 FTE work in a standard week?
96 hours 40 hours x .6 = 24 hours 40 hours x .8 = 32 hours 40 hours x 1.0 = 40 hours 24 + 32 + 40 = 96 hours Productive Time + Non-Productive Time Paid FTE: %3D 40
A maintenance department of 20 employees will work how many hours in a two week period? Assume no holiday or PTO.
1,600 hours 40 hours x 20 = 800 hours (week 1) 40 hours x 20 800 hours (week 2) 800 hours 800 hours = 1,600 hours Productive Time - Non-Productive Time Paid FTE = 40
What is the annual lease cost for 3,000 sq. ft. at a cost of $20 per sq. ft.? The space contains 200 sq. ft. of mechanical space and 220 sq. ft. of waiting space.
3,000 sq. ft. x $20 = $60,000
A health care facility engineering department has an annual FTE budget of $1,400,000. What will next year's budget be if a 3% increase is granted?
Next year's budget will be $1,442,000 $1,400,000 x.03 $42,000 $1,400,000 + $42,000 $1,442,000
What criteria determines what will be included in a capital budget?
Cost and life expectancy
Your organization has a capital threshold of $5,000 per item. What is your capital budget for the items on the list? Item A - $10,000 Item B - $4,200 Item C - $5,200 Item D - $5,400 (2 items at $2,700 each)
Capital budget for the listed itoms is $15,200 Item A + Item C = $10,000 + $5,200 = $15,200 Copital threshold is the level at which the cost can no longer be exponsed (or over the throshold) Both A and C are over the throshold and moot the capital roquirements
If you lease an entire building, what do you use to calculate the lease cost?
GSF (Gross Square Feet)
How do you calculate a partial building lease?
To calculate a partial building lease, use square footage from the leased portion, then deduct common space shared with other tenants (mechanical space, public restrooms, lobbies, etc.)
What does the acronym CHFM stand for?
Certified Healthcare Facility Manager
What is a prime reason that facilities engage in energy management?
Cost savings
A maintenance department has a budget for 20 FTE'S. The total hours paid are listed below. How many FTE'S were paid in this two week pay period? 1,440 hours = Regular hours worked 200 hours = Overtime hours (paid at time and one-half) 140 hours = PTOlsick hours
23.5 FTE'S 1,440hrs + 200hrs x 1.5 + 140hrs = 1,880hrs 1,880 FTE = = 23.5 FTES 80 Productive Time + Non-Productive Time PAID FTE = 40 2 weeks 80 hours
Your maintenance department has to complete 160 hours of work in one week. How much overtime will you work if you have the following staff? Two engineers at .9 FTE each One engineer at .6 FTE One engineer at 1.0 FTE
24 hours of overtime 40 hours x 2 engineers x.9 = 72 hours 40 hours x 1 engineer x .6 = 24 hours 40 hours x 1 engineer x 1.0 = 40 hours 72 + 24 + 40 = 136 hours 160 - 136 = 24 hours of overtime
Which of the following items would NOT be included in your capital budget? MRI - $2,600,000 X-ray machine $700,000 Cryogens - $30,000 monthly Renovation to install new machines - $300,000 Service contract - $50,000 annually
Cryogens and service contract are NOT included in capital budget. A capital budget includes items that exceed the capital threshold that are not consumables or service contracts. Cryogens and service contracts would be considered operating expenses, not capital expenses.
Your capital budget is $24 million. What percent of the capital budget will be spent on the radiology equipment? MRI - $2,600,000 X-ray machine - $700,000 Cryogens - $30,000 monthly Renovation to install new machines $300,000 Service contract - $50,000 annually
15% of budget will be spent. $3,600,000 -=0,15 or 15% $24,000,000 Include: MRI, X-ray machine and renovation costs. Cryogens are not radiology oquipment Sorvice contract is not part of capital budget.
A health care facility engineering department has an annual FTE budget of $1.4 million. At the end of month six $850,000 has already been spent. How over budget will the department be given the current spend rate?
The department will be $300,000 over-budget. $850,000 x 2 = $1,700,000 (estimated $ spent for a full year) $1,700,000 - $1,400,000 $300,000
Which of the following are not included in productive time? Meeting time Work order entry time Training time Holiday time Vacation time
Non-productive time includes holiday time and vacation time.
When calculating indicates a acality greater need condition for index (FC, a higher repair or replacement. number True or False?
True. Higher FCI indicates greater need for repair or replacement.
How many paid FTE'S would be required for three eight-hour shifts for seven days assuming 15% non-productive time?
4.83 FTE'S (3x8 hours) x 7 days = 168 hours (productive hours) 168 hours x .15 non-productive hours = 25.2 hours 168 hours + 25.2 hours = 193.2 hours (total hours) 193.2 hours/40 hours per week = 4.83 FTE'S Productive Time Non-Productive Time PAID FTE = 40 2 weeks = 80 hours
A facility manager is evaluating life-cycle cost for major physical plant equipment. Which factors are to be considered in the life-cycle cost (LCC)?
Life-Cycle Costs (LCC) include: operating costs, life expectancy and purchase price. Capital cost (C) Sum of all yearly scheduled operation and maintenance costs (M) Energy Cost (E) Sum of all repair and equipment replacement cost over the life of the system (R) Salvage or trade-in value (S) LCC= C+M+E+R-S
What are these items commonly called in the budgeting? Electricity, steam chilled water, domestic water, service contracts and supplies.
Operating Expenses (non-personnel expense)
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