Which variances must the HIM director explain?

The HIM director must explain both the payroll and consulting services variances due to their significance in the budget and overall financial health of the health information management department. Variances represent the differences between the budgeted amounts and the actual expenditures; understanding these variances is crucial for effective financial management and strategic planning.

The payroll variance indicates how much the actual payroll expenses differ from the budgeted amount. It can point to various operational changes, such as workforce adjustments, increased overtime, or other staffing-related issues that need to be managed.

On the other hand, the consulting services variance highlights the discrepancies in expenses related to consulting services provided to the department. This could reflect unexpected needs for expert advice, overuse of consulting services, or changes in the scope of work that necessitate additional funding.

Since both variances provide insights into operational efficiency and financial allocation, the HIM director must analyze and explain these variances to determine their causes and implications, ultimately guiding future budgeting and resource management decisions. Addressing both aspects helps ensure accountability and aligns the department's spending with its strategic goals.