Federal Nursing Home Administrator Practice Exam

What is the primary focus of a capital budget in a nursing home?

1. Operational costs

2. Maintenance expenses

3. Equipment and real estate

4. Staff salaries

The correct answer is: Equipment and real estate

The primary focus of a capital budget in a nursing home is on equipment and real estate. This type of budget is specifically designed to plan for long-term investments that enhance the nursing home’s infrastructure, such as purchasing new medical equipment, renovating existing facilities, and acquiring new property. These capital expenditures are crucial because they have a significant impact on the overall quality of care provided to residents, ensuring that the nursing home can meet regulatory requirements and maintain high standards of living for its residents. In contrast, operational costs, maintenance expenses, and staff salaries pertain to the day-to-day functioning of the facility. While these elements are important for the smooth operation of the nursing home, they do not fall under the capital budget, which is exclusively focused on investments that will yield benefits over a longer time horizon. Understanding the distinction between capital and operational budgets is essential for effective financial management within a nursing home.