Explain the process for creating an operating budget and its importance. Explain how revenues and expenses are grouped for planning and control in the financial statements.

UMGC Operating Budget
Imagine you are a clinical manager of UMGC Health Care primary care services and in charge of developing a projected annual operating budget.
Your budgetary figures are as follows:
For fiscal year 2017 and 2018, your clinic received $3 million from the government as fee-for-services reimbursements, as well as $1.1 million from private payers. The clinic has an annual fund-raiser that historically brings in $180,000 and a grants department that brings in $1.2 million annually.
Your chief financial officer (CFO) has provided you with the following annual expenses:
UMGC Health Care Annual Expenses:
Annual salaries – $1.5 million
Annual benefits – $ 240,000
Annual rent – $ 960,000
Annual insurance – $ 45,000
Annual depreciation – $ 780,000
Annual overhead – $ 180,000
Annual supplies – $60,000
Using the UMGC Health Care Operating Budget template, complete a 12-month operating budget in which you include the net profit (loss).
Write a 350- to 700-word executive summary that explains to the board of directors how you developed the budget and its importance.
Include the following in your summary:
Explain the process for creating an operating budget and its importance.
Explain how revenues and expenses are grouped for planning and control in the financial statements.
Explain the differences between cash and accrual financial systems.
PLEASE INCLUDE REFERNCES

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