Managing Financial Resources in Health Care

This assignment provides a comprehensive report on managing financial resources and budgeting in health care industries. It discusses budget monitoring, gathering information related to decision-making, and suggests ways to improve the financial system in healthcare. The report also touches on sustainability-oriented innovation systems, corporate performance management, and making sustainability work.

Managing Financial Resources
in Health and Social Care

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Principles of costing and business control system................................................................1
1.2 Information needed to manage financial resources...............................................................1
1.3 Regulatory requirements for managing financial resources..................................................2
1.4 Measurement of system for managing financial resources in health or care organisation. . .2
2.1 Different sources of income that may be encountered in health and social care..................3
2.2 Factors which affect the availability of resources in health care organisation......................3
2.3 Review of various type of budget expenditure.....................................................................3
2.4 Evaluation of decision about expenditure made with in a health and social care sector......4
TASK 2............................................................................................................................................4
3.1 How financial shortfalls can be managed.............................................................................4
3.2 Action to be take for suspected fraud....................................................................................5
3.3 Budget monitoring arrangements in a health or social care organisation.............................5
4.1 Information required to make financial decision..................................................................5
4.2 Relationship between health and social care service delivered, cost and expenditure.........6
4.3 Impact of financial consideration upon an individual using the health and social care
service.........................................................................................................................................6
4.4 Ways to improve the health and social care service with the changes to financial system. .6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Cost accounting is one of the branch of managerial accounting. Cost accounting and
business control system in organisation explained in this report. Importance of financial
resources and what are the reforms and regularity followed in organisation defined in health and
social care sector (Swayne, Duncan and Ginter, 2012). System for managing financial resources
in health and social care organisation also described in organisational context. Availability of
financial resources and how they are allocated in organisation outlined subject to case scenario.
Importance of monitoring budget expenditure and what are the action taken in case of suspected
fraud also highlighted. Essential financial informations are defined in this context subject to
financial decisions.
TASK 1
1.1 Principles of costing and business control system
Cost analysis is one of the prime work of cost accountants in organisation. Cost
accounting system woks around four major principles such as cost remain always associated with
causes, abnormal costs are considered in costing, costs need to be changers when it incurred in
operations and management (Simonovic, 2012). There is one traditional principle followed in
every organisation that past costs are not considered in cost accounting for adjusting future cost.
Business control system is adapted by the organisations to make discipline in the actions
and ethical manner to determine the cost. This system provides a systematic structure to cost
accountants for detailed analysis. Business control system is the system made of various
management principles and concepts. It helps to organise and manage the departments and
divisions of organisation. It is a system helps to align the business resources such as financial,
human resources and tangible and intangible resources in disciplined manner.
1.2 Information needed to manage financial resources
Financial resources are the prime sources of an organisation to run operations and
activities. Informations related to financial resources are used as a tool to manage the plan of
allocations of financial resources (Shim, Barber and Serido, 2010). Financial resources helps to
mange all other subsidiary resources such as material, labour and inventories. Financial
institution, banks, comparative unions are the bodies which provide financial sources to the
organisation. Various type of financial informations are used to get financial help form financial
parties. It is important to ensure stakeholders and financial institution about the financial position
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of the organisation. Final reports, annual report, financial position statements, bank statements
are the main sources of information for financial institutions and banks. Requirement of financial
resources vary as per the operational activities and functions. Allocation of financial resources
not only the final work of accountants. Proper auditing and valuation check is also another
crustal task which is required to done by the accountants.
1.3 Regulatory requirements for managing financial resources
Silloth nursing and residential care home is an health care organisation works in the
United Kingdom. There was a charity made to the management committee. There is a trust deed
made between the 16 members of organisation. Charity's objectives are to keep fair and clear
records in terms of health care and social management. Charity Act 2011 covers the rules and
regulations related to consideration payment made to trust and health care homes. There is a
proper management required of informations and records related to charities (Rockey and
Collins, 2010). All the monetary and non monetary resources are recorded in particular format.
Apart form there relevant legislations also need to followed by the organisation. Such as
care quality commission regulations 2009, civil contingencies act 2004, freedom information act
2000 , code of practice act 1983 are the main legislations followed by the Silloth nursing and
residential care home. As per the deed there is a documented receipts to be given the person who
gave the charity.
1.4 Measurement of system for managing financial resources in health or care organisation
There are various tools and systems made to measure the financial resources in health
care organisation. GAAP (Generally Accounting Accepted principle), summarising the
information, utilisation of financial principles and accounting rules are the main part of this
system. This provides a effective system to operate and manage the financial resources in proper
manner.
A ethical system helps to maintain a systematic procedure to implement the policies and
standards in health and care organisation. Most of the health and care centres get the finance help
in the form of charity and donations (Wilhite, Sivakumar and Pulwarty, 2014). There is a system
made to record the receipts in registers, to keep the information confidential of persons and
parties. Statement of Income and expenditure account prepared for non profit and loss
organisations or charitable trust to keep the financial records of charities and donations. All the
receipts and cash payments are recorded on the name of subscription.
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2.1 Different sources of income that may be encountered in health and social care
Silloth nursing and residential care home operates its operations and functions with the
helps of charities and donations given by the government, business persons and persons.
Charitable trusts are the main sources of financial resources for the organisation as per the
financial report and statements as at 31 march 2008. government grants, subsides and funds are
the another sources of getting financial help (Renz, 2016). There are some essential sources
which remain undisclosed due to data privacy and protect act. Government's contribution
remains high to provide financial help to charitable trust and care homes.
Business organisations and large corporate group gives charity and donations to care
homes, non government organisation and health care societies. Emerging the living standards of
society and social welfare are the main objectives of charitable trusts and health care homes.
Business organisation and corporates get relief form the government in respect of tax payments
and deductions. Some of the funds are generated by public campaigns and events for public
welfare and social health care development purpose.
2.2 Factors which affect the availability of resources in health care organisation
Various affecting factors occurs challenges in generating financial resources. It is see that
there is a lack of awareness and education in society towards charity and donations (Allocation of
financial resources in health and social care, 2017). Lack of participation of potential volunteers
and representative bodies, lack of public interest are the major affecting factors which make
situations complex. Most of the charitable trust and communities can not be able to promote and
advertise the charity campaign and events due to lack of finance sources.
In developing and poor economic countries health and care centres suffer from the lack
of availability of financial resources (Altenburg and Pegels, 2012). Government is the only
participating bodies in developing countries and territories which provides financial helps to
health and social care industries. Destination and place also plays vital role in respect of
approachability of financial resources in health care organisation.
2.3 Review of various type of budget expenditure
Various kind of expenditure and budgets in health care sectors. Budgets and informations
provides informations related to sources and management. To determine the cost and financial
requirement for the upcoming events and operations budgets and expenditures statements are
prepared by the accountants. Budgets provides a forecasted image of future operation and
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management in health and social care industries. Various type of budgets are prepared such as
purchase and sales budget and cash budget to analyse the future requirement of resources.
Objectivity, planning and control are the main elements covered in budgeting process. There is
critical analysis and comparison made between the actual cost incurred during the year and
budgets prepared for the year.Sales budget is also considered as master budget which helps to
record the input sold and utilised for a particular time.
2.4 Evaluation of decision about expenditure made with in a health and social care sector
Decision making is one of the essential work in organisation. This is considered as
managerial work which contains high comprehensive skills, knowledge to the subject and
experts overview (Ameen, 2011). Decision making in health and social care sector depends upon
allocation of resources and arrangement of financial resources and other subsidiary resources.
Accountants and managers analyse the requirement of resources in respect of purchasing the
plans, property and assets. Projects and task are prepared after critical analyse of capital
expenditure and arrangement of resources.
This process needs vast knowledges subject to preparing strategies and plans for better
forecasting and analysis. There are some accounting and financial methods are used to analyse
the accountability and credibility of investment for upcoming years. Net present value method
and time value of project techniques are used to determine the cost and sustainability of project
in near future.
TASK 2
3.1 How financial shortfalls can be managed
There are some certain factors and elements remain responsible to financial shortfalls. In
Silloth Nursing and Residential Care Home financial shortfalls remain associated with the
financial problems and health care issues. Three main techniques such as virulent, monitoring the
inflow and cash flow, controlling and managing finance requirement are used to analyse the
finance requirement and controlling financial resources in effective manner. Bank credits and
pay back payment period is one of the financial shortfall managed by the accountants and
finance managers in health and social care sectors and organisation.
Delay in payments to suppliers lag the overall process of management and operation in
health care sector (Remund, 2010). Escalations and obligations also affect the free flow of
operations and become the part of financial shortfalls in health and social care sector.
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3.2 Action to be take for suspected fraud
Fraud is considered as unlawful and illegal act. There are various type of frauds and
suspected cases happen in health and social care organisations (Aras, Aybars and Kutlu, 2010).
Misrepresentation of information, wrongful discloser of accounting and financial policies,
unlawful consideration and payments and corruption are the type of suspected frauds. All these
actions are considered as illegal and the person found indulge with fraud and suspected activities
get charged.
There are chances of in Silloth Nursing and Residential Care home such as fraud of lack
of confidentially, appropriate use of financial and other non monetary resources, taking the
benefits of resources as personal use, mismanagement and lack of accounting system to record
receipts and payments. Risk assessment is a method used by the organisation to analyse the fraud
and suspicious act on time. Internal audit programs and quality checks are the methods used by
the organisation to control the suspicious activities.
3.3 Budget monitoring arrangements in a health or social care organisation
Forecasting and budget monitoring helps managers and accountants to maintain
discipline and ethical environment in health and social care industries. Cost control system is one
of the important factor used by the Silloth Nursing and Residential Care home. Improving the
living standards and awareness about the moral values are the main objectives of social care
organisations. Providing quality and best health care facilities and treatments to patients and
people are the prime objectives of health care industries. Objectives of both the entities remain
centralised around improving the structure of society and protection their rights.
Monitoring of budgetary expenditure in Silloth health and Residential Care Home would
help to reduce the extra cost and activities in organisation. Monitoring assessment helps to
determine the cost of project and task on time.
4.1 Information required to make financial decision
Performance record, annual achievement reports, investment and finance reports are the
essential sources which helps in financial decisions (Carballo-Penela and Doménech, 2010). This
helps to take important decision subject to analysing the financial requirement for further actions.
Balance sheet, income and expenditure reports, annual reports, managers reports and budgetary
reports are the main sources used as a information tools for financial decision. It is
understandable by the example that there is an extension plans to improve the size of caring
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home. To make the plan there are some certain information would be required as budget
information, details of location for establishing the entity, approachability of financial resources.
Manner of allocation of financial resources business and organisation. Finance manager and
accountants prepare the final report. Report contains summarised details of finance requirement
and sub resources to complete the task and projects.
4.2 Relationship between health and social care service delivered, cost and expenditure
There is an ethical and healthy partnership relations found between health and social care
services. Providing quality standards and moral standards subject to health issues and problems
are the main objectives of health care services (Epstein and Buhovac, 2014). Service uses and
staff members the main effecting parties affect the delivered services and cost benefits. It is
require to understand the dynamics of management and operation in health and social care
services for employees and staff members. Cost and charges depends upon the services provided
to the patients and customers. Cost structure in health and social care service sector varies as per
the services delivered by the organisation. There is proportionate ratio adopted by the managers
and accountants in respect of utilisation of financial resources. Resources can be utilised to
purchase the equipments, medicines, land and buildings etc.
4.3 Impact of financial consideration upon an individual using the health and social care service
Coordination is essential elements between the finance requirement, arrangement of
finance resources and allocation of finance resources. Proper monitoring and audit program is
organised by the health and social care mangers. Donations, subscriptions, governments grants
and subsidies are the main sources of income for health and social care sectors and charitable
trusts. Taking care of sources and services are the key functional areas in which accountants and
managers try to communicate.
Managers and accountants try to communicate the financial requirement with the
financial resources. It is required to track the actions whether the resources are used for the
proposed plans or not. They analyse the balance sheet and financial position statement to
determine the Financial cost of the project.
4.4 Ways to improve the health and social care service with the changes to financial system
There are various methods and techniques can be used to control and manage the flow of
financial resources with in the health and social care sector (Hay, 2010). As per the case
scenario, there is an annual report of Silloth Health and Residential Care Home given for the
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year ended 31 march 2008. providing training and development programs to employees and staff
members to improve the analytical skills of financial problems.
CONCLUSION
Allocation and utilisation of financial resources are in health and social care sectors
elaborated in this report. Costing principles and business control system is defines properly.
Need of financial resources to operate the functions and operation in health care industries
explained in this context. Different sources to generate the financial resources and factors which
affect the availability of resources also described in this context. Review of different type of
budgets and expenditure to control the use of financial resources. Legal actions subject to
suspected fraud defined in practical form. Budget monitoring and gathering the informations
related to decision making are discussed in this report. Suggestions and recommendations are
given to improve the financial system in health care industries.
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REFERENCES
Books and Journals:
Altenburg, T. and Pegels, A., 2012. Sustainability-oriented innovation systems–managing the
green transformation.Innovation and Development.2(1). pp.5-22.
Ameen, K., 2011. Changing scenario of librarianship in Pakistan: managing with the challenges
and opportunities.Library Management.32(3). pp.171-182.
Aras, G., Aybars, A. and Kutlu, O., 2010. Managing corporate performance: Investigating the
relationship between corporate social responsibility and financial performance in
emerging markets.International Journal of productivity and Performance
management.59(3). pp.229-254.
Carballo-Penela, A. and Doménech, J.L., 2010. Managing the carbon footprint of products: the
contribution of the method composed of financial statements (MC3).The International
Journal of Life Cycle Assessment.15(9). pp.962-969.
Epstein, M.J. and Buhovac, A.R., 2014.Making sustainability work: Best practices in managing
and measuring corporate social, environmental, and economic impacts. Berrett-Koehler
Publishers.
Hay, J., 2010. Too good to fail: Managing financial crisis through the moral economy of realty
TV.Journal of Communication Inquiry.34(4). pp.382-402.
Remund, D.L., 2010. Financial literacy explicated: The case for a clearer definition in an
increasingly complex economy.Journal of Consumer Affairs.44(2). pp.276-295.
Renz, D.O., 2016.The Jossey-Bass handbook of nonprofit leadership and management. John
Wiley & Sons.
Rockey, S.J. and Collins, F.S., 2010. Managing financial conflict of interest in biomedical
research.JAMA.303(23). pp.2400-2402.
Shim, S., Barber, B.L. and Serido, J., 2010. Financial socialization of first-year college students:
The roles of parents, work, and education.Journal of youth and adolescence.39(12).
pp.1457-1470.
Simonovic, S.P., 2012.Managing water resources: methods and tools for a systems approach.
Routledge.
Swayne, L.E., Duncan, W.J. and Ginter, P.M., 2012.Strategic management of health care
organizations. John Wiley & Sons.
Wilhite, D.A., Sivakumar, M.V. and Pulwarty, R., 2014. Managing drought risk in a changing
climate: The role of national drought policy. Weather and Climate Extremes.3. pp.4-13.
Online
Allocation of financial resources in health and social care, 2017. [Online]. Available
Through:<https://www.healthknowledge.org.uk/public-health-textbook/medical-
sociology-policy-economics/4d-health-economics/financial-resource-allocation>.
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