Managing Financial Resources in Health and Social Care - Sample Assignment
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Added on 2021-04-21
Managing Financial Resources in Health and Social Care - Sample Assignment
Added on 2021-04-21
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RUNNING HEAD: Managing Financial Resources in Health and Social CareFINANCIAL RESOURCE MANAGEMENTCareTech PLC
Managing financial resources in health and social care 1ContentsIntroduction...........................................................................................................................................2Task 1....................................................................................................................................................21.1 Costing principles and business control systems.........................................................................21.2 Information need to manage financial resources..........................................................................41.3 Regulatory Requirements............................................................................................................51.4 System evaluation for managing resources in CareTech PLC.....................................................6Task 2....................................................................................................................................................62.1 Sources of Income.......................................................................................................................62.2 Factors that influence the availability of financial resources.......................................................72.3 Types of budget expenditures in CareTech PLC..........................................................................82.4 Evaluating the decisions made regarding expenditures................................................................9Task 3..................................................................................................................................................103.1 Managing the Financial Shortfall...............................................................................................103.2 Actions to be taken against the occurrence of financial fraud....................................................113.3 Evaluating budget monitoring arrangements.............................................................................12Task 4..................................................................................................................................................134.1 Information required for taking financial decisions...................................................................134.2 Relationship between care service provided and ‘cost and expenses’........................................144.3 Impact of financial consideration on a service user...................................................................154.4 Changes in the financial system to improve the care services of CareTech PLC.......................16Conclusion...........................................................................................................................................16References...........................................................................................................................................18
Managing financial resources in health and social care 2Introduction Care Tech Holdings PLC is a social care services provider operating in United Kingdom. Thecompany offers Adult Services which include Adult Learning Disabilities (ALD) and Mental Health (MH) segments. It also provide Child Services that consist of Young People Residential Services (YPR), Learning Services and Foster Care (FC). Care Tech offers support to those people who have mental issues and illness (Caretech-uk.com. 2018). This report contains a discussion based on financial aspects of the company. It explains the ways in which Care Tech manages its budgets and various sources of funds. Costing principles and business control system are also explained in the report. In the later part, various sources of generating revenue, ways to improve the services and other aspect of finance are also discussed. Task 11.1 Costing principles and business control systemsAccording to the National Health Services, the approved costing guidance provides a set of standards and principles that should be adopted by all the organizations operating in health sector, including Care Tech also (Improvement.nhs.uk. 2018). These are as follows:Consistency: There should be consistency in the method of costing employed by the organization. This will enable the management to calculate the correct cost of all the activities according to the expense incurred by the organization.Accuracy of data: This principle deals with the level of accuracy in the data entered inthe costing system. Thus, it is vital that the data input must be accurate to the costing process because inaccuracy will lead to the huge repercussions and the company may have to face big challenges in maintaining accurate costing system.
Managing financial resources in health and social care 3Involvement of shareholders: The people who invest their money in a company are known as the shareholders. In order to have an effective costing system, Care Tech should take inputs from its shareholders and apply them in procedure. Materiality: This principle states that the prime cost should be included while determining the overall cost of the organization. The process should follow the prime cost and expenditure of the firm. Transparency: The review of each and every element of costing utilized by the company, should be done in depth in order to establish transparency in the system. Business activities should be carried in such a manner that every element can be identified. Objectivity and Causality: The principle of causality implies that the organization must be aware about the concept of cause and effect. Objectivity deals with setting of the objectives by the company in order to achieve the same in an efficient manner (Assets.publishing.service.gov.uk. 2012).Apart from applying above principles, Care Tech should also install some business control system so to assure the smooth functioning of the entity. The following control system are recommended for Care Tech PLC: Personnel Control: Care Tech must employ an effective and efficient procedure for sourcing good staff, training and retirement. It should avoid high turnover of staff and for that the company must establish a control in the recruitment process and make a security check on personnel.Payroll Control: This take care of the system which involves payment of employees’ remuneration. It also controls the authority which is responsible for making such payments.
Managing financial resources in health and social care 4Framework of regulations: There should be a regulatory framework which helps in regulating and controlling the activities of the business, integrate them and establish a control within the organization. Forecasting: Care Tech must apply forecasting technique in its business in order to know about the future contingencies, future performance and cost expenditure. The data derived from making forecasts is highly beneficial for the company as it can helpin planning out the future strategies.1.2 Information need to manage financial resources Following information is required to maintain the financial resources: Management Accounting Cost and price related data: It is very much needed to ascertain the price per unit and to have an idea about the cost incurred on each unit of production. Budgets: preparation of budgets help in estimating the future cost and revenue of the operations. The data derived from them is used in evaluating the firm’s performance by comparing budgeted outcomes with the actual ones (Clowes and Scriven, 2015).Cost benefit and Variance analysis: cost benefit analysis helps in determining the benefits earned by the business over the cost incurred by it. Variance analysis measurethe performance of the different segments against the predetermined targets (Nas, 2016).Financial Accounting Income Statement: It contains the data related to the profit earned by the company during a fiscal year. CareTech’s Annual report of year 2017 shows that company had performed pretty well in 2017 as its revenue increase by 11.4% and dividend per share rises by 5.6% (Caretech-uk.com. 2017).
Managing financial resources in health and social care 5Balance sheet: It gives an overview of total assets and liabilities of the company including the value of shareholders’ equity. It shows the overall financial position of the company (Ittelson, 2009).Cash flow statement: It represents the inflow and outflow of the cash in a business. CareTech reported a cash inflow of £32.7 million from its operating activities in 2017 (Caretech-uk.com. 2017).These information thereby helps in taking important decisions regarding management of financial resources.1.3 Regulatory RequirementsCare Tech being working in a health sector, needs to comply with the provisions mentioned in the Health and Social Care Act 2012. These regulations help the company to perform its functions effectively and efficiently. The following requirements are:Accountability Code of PracticeConsumer protection Appropriate organization structure (Legislation.gov.uk. 2018).Following are the regulatory authorities who monitors the activities of health care industry: NHS Litigation AuthorityAudit CommissionFinancial reporting councilHMRCCare Quality Commission
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