Managing Finance in The Public Sector - Assignment
Added on 2019-12-28
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MANAGING FINANCE IN THE PUBLIC
SECTORAssignment byTABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 In chosen nation explanation of the public sector............................................................11.2 Organisations funding and operating system...................................................................31.3 Information which are required to reporting in public sector company...........................8TASK 2............................................................................................................................................92.1 Accountability of the firm with availability of financial information..............................92.2 Monitoring and controlling of financial resources in NHS organisation.......................112.3 Financial decision making process for NHS..................................................................12TASK 3..........................................................................................................................................143.1 Tender documentation and tender process for NHS organisation..................................143.2 Criteria and scoring system for evaluation of tenders....................................................16CONCLUSION..............................................................................................................................18REFERENCES..............................................................................................................................19
INTRODUCTIONFinance plays a significant role in each and every business, without financial resources anenterprise can not exist and survive in the market or industry. The main objective of managingfinance is to assure the best use of available funds. It further ensures optimum utilization offunds at least cost. Thereafter, managing finance assure constant and appropriate supply of fundsto the business. The present report is based on the national heath services PLC (NHS) companywhich is England based firm and operating in the healthcare sector. The company provides itsproducts and services across the world. The report describes informations which are needed forincrease the fund and require reporting to the authority body. Another part of the project showsresponsibility for financial informations and process for making financial decisions in the publicsector business. Apart from this last part of the report describes regarding to the tender and itsdocumentation as well as system of scoring for evaluating tenders.TASK 11.1 In chosen nation explanation of the public sectorThe public sector can be referred to as the state sector or the government sector, is aportion of the state that deals with the manufacturing, control, sale, precondition, transportationand allotment of goods and services by and for the government or its residents, whether national,regional or local/municipal (Flynn, 2012). It is the income generating division which rendersadministrative services to the public and community. The public sector differs from nation tonation where it may involve, health care, education, roadways, railways, postal services, militaryand police etc. In the public organisations there are all the control and monitoring is ingovernment's hand, it can be said that regulatory body of public company is government of thecountry. Here the national health services company which is operating in the England countrywhere it needs to follow all the rules and regulations framed by respective country. Ownership ofthe company is with government due to regulating the public organisations and all the policiesmust be followed by the NHS. The England is in Europe continent where a union is establishedby the countries for public sector and private sector companies as well. As per the Europeanunion the public sector company has not to do any discrimination between employees, customersand other stakeholders. Apart from this in the county the company can move or sell and buygoods and services without any taxes and tariffs. In the England there is policy for thegovernment companies is that free movement of its products and services. Apart from this the1
public sector business entities can freely provide its services across the world, in case of healthcare companies there are no restrictions as well as obstacles in order to provide its services in theworld (Graham, 2014). Furthermore, in the England country the public sector companies has freedom in order toestablish a new firm or expand existing business. There are all the rules, regulations and policiesas well procedures are better up to greater extent due to not facing any obstacles for establish andoperate in the country. As per the rules of England public sector companies are needs to followall the rules and regulation which are imposed by government for various functions such asfinancial, operation, accounting and auditing, human resources, recruitment and selection processetc. (NHS England. 2016). According to the present scenario government of the country iscontributing in the financial resources by which profitability ratios are high and businessperformance is also better in comparison to another segment.In the business entity such as National Health Services finance plays an important role inorder to provide various kinds of services related to health and medicines as well. Further, forproviding such kinds of services the company needs fund which is raises from various financingsources. The NHS collects fund or financial resources from mainly three aspects and avenueswhich are such as taxation, national insurance as well as charges which are taken from thepatients. Among these all the three criterias higher the contribution in terms of providing fund toNHS is of the national insurance as well as taxation. From the below mentioned graph it can beclearly visualised that approximate more than 98% fund id to be provided by the nationalinsurance and taxation amount. On the other hand side, contribution of charges given by patientsis only approximate 2% in the year 2014-15. It can be said that there is a huge portion of thenational insurance and taxation is with the NHS in terms of raising capital at the workplace.Further, very minor and negligible proportion is of the patients which is in terms of fees andcharges and helps to the NHS for business expansion. In the financial year 2014-15, the companysuch as NHS was received Grant-In-Aid funding which is worth of approximately£97.3 billionwhich is against to the amount worth of £93.4 billion in the year 2013-14.2
1.2 Organisations funding and operating systemEvery organisation whether it is public, private or non profit, all are needs finance orcapital in order to expand the business. For raise fund or capital in the firm there are differentsources available which provide financial services to the companies. National health servicesorganisation which is a public sector company also require finance for expand the services andproducts as well as increase consumers. The government of the country is main sources offinance for public sector enterprises and other several sources are also available. Another varioussources of finance are such as equity share, bank loan, venture capital, retained earnings,merchant banking, leasing etc. When the NHS raise fund through various sources then it has topay cost of this in terms of different kinds and there are some limitation as well (Wang, 2015).Drawbacks or limitations of the funding are enumerated below:Most of the business entities prefer equity financing in order to enhance financialresources in the company which helps to expand firm and product range as well. Very mainlimitation of this funding is that, the company have to pay dividend amount year by year to thestakeholders or investors. This factor impact to the financial performance of the firm adverselybecause dividend is given to stakeholders from net profit of the enterprise. Apart from thiswithout listing or registering in stock market of respective country NHS cannot raise fundthrough equity and unable to offer shares. As per the another funding option venture capital it3
imposes cost on company in terms of stake of the firm. When the entity raise fund from venturecapital then it needs to give stake and dividend amount as well from margin earned by it.Dividend is just like expense of the firm which lead to decrease level of profit by which financialperformance hampers in the industry (Shah, 2007). Hence, it can be said that funding is affects tothe firm in negative manner. Apart from this when NHS raise capital from bank loan then cost ofit is in terms of interest amount which is depended on the stock market. Interest amount is alsoleads to reduce benefits or profit of the firm and impact on profitability in negative manner.Drawback of bank loan is that when the firm is unable to pay loan amount then bank has powerto wound up whole business. Government funding is another main source for the company in order to raise finance. Inthe present case NHS raise fund from European regional development fund which a kind ofgovernment funding. In this limitation is that, if government found any problem in respectivebusiness then it can terminate contract and not provide fund. As per the sources all formalitiesrelated to documentation must be appropriate, without this firm cannot raise capital in thecompany (Starling, 2010). Hence, it can be analysed that with various advantages on other sidethere are several drawbacks of the funding.In the business various financial informations are available and analysed from differentfinancial statements like as Income statement, Balance sheet, Statement of cash flow, Statementof shareholder's equity and gains etc. These all the statements and financial informations arehelpful for the NHS in order to meet accountability requirements as well as goals and objectivesof it. Further, the NHS has various trusts among then NHS foundation trust is to be chosen atover here. The respective trust is a semi-autonomous unit of the NHS and take care departmentof health by providing adequate fund to it. With the help of financial information available inbalance sheet the company able to meet various accountability requirements of There are various kinds of accountability requirements are need to meet for the companysuch as National Health Services foundation trusts in terms of statutory which helps to it in thefuture in order to organise and raise fund. With the help of financial information available inbalance sheet the company able to meet various accountability requirements. Many kinds ofstatutory accountability requirements for the entity like as NHS foundations trust with help ofbalance sheet are stated as below:4
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