Managing Financial Resources in Health and Social Care

Managing financial resources
in health and Social Care

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Principles of costing and business control systems...............................................................1
1.2 Need of information to manage financial resources.............................................................2
1.3 Regulatory requirements for managing financial resources..................................................3
TASK 2............................................................................................................................................4
2.1 Source of income which is encountered in health or social care..........................................4
2.2 Factors which is influencing availability of financial resources in social care organization6
2.3 Different types of budget expenditure in health and care organization................................7
TASK 3............................................................................................................................................7
3.1 Covered in PPT.....................................................................................................................7
3.2 Covered in PPT.....................................................................................................................7
TASK 4............................................................................................................................................7
1.4 System for managing financial resources.............................................................................7
2.4 Decision about expenditure within health care organization................................................8
3.3 Budget monitoring arrangements in health care association.................................................8
4.1 Requirement of information while making financial decision..............................................9
4.2 Relationship between service delivered, costs and expenditure...........................................9
4.3 Impact of finance on individual using social care services.................................................10
4.4 Improvement in health or social care service through changes in financial systems or
process.......................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Capital act as a backbone for every organization either small or large because entire
business activities are fully depend upon funds which is invested by entrepreneur with the help
of various sources. However, it has been observed that health and social care organizations need
maximum funds due to their roles or responsibilities towards development of entire society
(Epstein and Buhovac, 2014). NHS is one of the famous enterprise which plays a major role in
providing best or suitable care services to overall society in order to minimize issues related with
well being of individuals. Therefore, assignment is going to classified into different sections for
highlighting the significance of finance management in health care organization and need of an
effective system in this association. Moreover, shows some relevant facts or figures related with
accounting department in order to understand the need of information system in an association.
Along with this, budget, principles of cost control, necessity of regulatory bodies, various kinds
of expenditure, origin of acquiring funds and several other elements of finance are further
outlining in this project. Lastly, assignment is also throwing lights on appropriate actions which
is taken by NHS in managing fraudulent activities that is occurring at workplace.
TASK 1
1.1 Principles of costing and business control systems
Cost is defined as the resources which has to be sacrificed or must be sacrificed to attain
any particular objective or it is the amount of resources used for something which is measured in
terms of money. Costing may be defined as the classifying, recording, allocation and
appropriation of expenses for the determination of costs of product or services. The important
costing principles which are used in health and social care sector are:
 Casualty: The process of costing and its output should be able to show the casualty and
their relationship between activities that took place. Casualty cost should be traced
through the system (Abdelhak, Grostick and Hanken, 2014).
 Costing process should be transparent: The costing process should be transparent to
facilitate proper analysis and validation.
 Costing process should be consistent: Costing process should be done on regular basis
to maintain the records to avoid any inconvenience.
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 High quality and accurate data base: The data base should be of high quality and
should be accurate enough which can reduce losses to some extent.
 Costing charge changes with the effect of abnormal costs: Abnormal costs include the
cost incurred at the time of fire, riot, theft or accident. If any Mis-happpening occur in the
premises of hospital, then the hospital will undergo extra charges to overcome that loss.
Abnormal cost greatly affects the financial management of the hospital.
Business control system help the organisation to protect their company from abnormal costs,
uninformed decisions or irrelevant behaviour. At the time of building a business, its important to
give the authority to others to ensure whether the tasks are completing on time or not. The
managers and leaders assign work to their employees and ensure that the tasks is completed on
time, whether the tasks are producing the desired output. Same is the case in hospital and social
sector, the supervisors assign the works and watch the progress of the work as well as of the
employees (Schaltegger and Wagner, 2017).
There are three type of control systems which can help in controlling the situation in a better
way:
 Visual control: It include dash boards, scorecards, checklists, budgets etc. These help in
ensuring whether the works are completing in a right way or not, if not then they raise the
flags to improve the tasks.
 Procedural control: These include two unrelated parties internally related involved in
the flow of money. It establishes a known pathway for securing a consistent result.
 Embedded controls: These include automated data backups, standardised contracts and
financial controls. These all works automatically to protect the business from making
poor decisions.
These were some of the systems which are used to maintain any business and prevent it form any
failures.
1.2 Need of information to manage financial resources
Financial resources are those which uses the money in the form of liquid securities, cash
and credit. It help the organization to make them financially strong and help them to establish
their business (Finkler and et. al., 2016). In health and social care sector, financial support is
must. Information of financial resources helps the organisation with the costs inflow and outflow
of the organisation, profit and losses and their financial reports. This help to make better cost
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