Financial Control and Budgeting

Financial Control and
Budgeting

Table of Contents
INTRODUCTION ..........................................................................................................................3
Question 1 .......................................................................................................................................3
A Legal, financial and regulatory environment of health and social care ..................................3
B Use of funding options ............................................................................................................4
C Agency theory .........................................................................................................................5
Question 2........................................................................................................................................6
A Impact of financial constraints, cost and budget of health and social care services ..............6
B challenges of budgeting in public sector organisations............................................................7
C Advantages and disadvantage of incremental and Zero based budgeting ...............................9
Question 3......................................................................................................................................11
Break even point and margin of safety......................................................................................11
Assumptions for break even point.............................................................................................12
Conclusion ....................................................................................................................................13
REFERENC...................................................................................................................................14

INTRODUCTION
Budget is the financial plan which is being prepared by any organisation to know future
expenses and by making proper budget organisation may attain the pre- determined goal and
financial control is the procedure of making budget for a specified time duration and the
organisation can compare the actual performance with the standard performance (Drahos, 2017).
This report is based on National health services which is located in UK and It is publicly funded
health care. This report states about the legal, financial environment of the health and social
care. Also it speaks about the various funding options such as private finance initiatives, agency
partnership, competitive tendering. Agency theory is also mentioned in this report. Impact of
cash budgeting is elaborated in this report. Break even point is also mentioned in this report.
Question 1
A Legal, financial and regulatory environment of health and social care
The legal regulatory for health and social care is that they have to protect people at work
and also organisation have to be take care about work activities done by the employees. Legal
rules and regulatory involves the protection of health and safety of the people who are working
in the organisation (Stephan and et.al, 2018). The financial regulatory of health and social care
is concern with making proper plan and policies of the organisation so that they may purchase
the necessary tools and equipments. Health and social care uses heath financing so that they can
give better treatment to the patients by using technology. Apart from this, if the organisation
has properly maintain its machinery and equipments so that the employees also do not get harm
by using such machinery and equipments and also they may offer best services to the patients.
Health financing is useful for the protection of health of workers as per the lows and regulations,
organisation provides proper training and development to the employees so that they know how
to use tools and equipments properly. To manage the finance in heath and social care they need
fund from various sources of funds, through collecting funds from the government and also
from various different schemes and directly payment out of the pocket from the patients.

Another thing which is being used by the health care is that they collect fund from high net worth
individual and those people who are from lower middle income group. This can be the direct
income of the organisation which they get from such patients in the form of fees and charges
which they charge from their patients by giving them proper health care services. But the funds
and finance of the organisation depends on the country as well if the organisation is situated at
the developed country it may easy for them to gather funds from various sources and on the flip
side if the organisation is located in such country which is financially weak it may become
difficult for the organisation to collect fund thus they provide poor services to the patients as they
do not have money to buy machinery and necessary tools.
B Use of funding options
Private Finance Initiative
Private finance initiative as the name suggest, it is one of the way to finance public
sector organisation and projects through private sector (Kuluski and et.al, 2017). It is one of the
important and controversial method of collecting fund from the public in the form of tax so it is
an unnecessary burden on the general pubic. Because the PFI alleviate on the government and
public, to gain the fund, this public sector projects gather money from only those people who are
the regular payer of tax. In this method, any private company handles the cost instead of
government and private companies manage all the collected fund in the appropriate manner.
Agency partnership
Agency partnership is one of the most dynamic and effective way of collecting and
gathering the fund so that the government can allocate funds to the government so that they may
provide better services to the customer and patient (Regenstein and et.al, 2018). As the name
suggest, in the agency partnership, this government projects do partnership with big name and
famed agencies who collect the fund on the behalf of the government and manages the entire
business and aft6er collecting the fund these agencies distributes the funds in different
departments of the organisation. But the agency have to make sure that they do not distribute the
funds in a wrong manner so that no body can misuse such funds.
Competitive tendering
This is one of the popular method of collecting fund for the government project and
organisation. It is known to be the bidding system in which the investor and big organisation
bid for the higher they will purchase the government debt (Huggett, , 2020.). It is similar to the