Managing Financial Resources in Health and Social Care (MFR)

This assignment explores the principles of costing and business control systems, identifies information needed to manage financial resources, and explains the regulatory requirements for managing financial resources in health and social care organizations. It also analyzes the diverse sources of income, factors influencing financial resource availability, and different types of budget expenditure in these organizations. The assignment further examines how financial shortfalls can be managed, actions to be taken in the event of suspected fraud, and evaluates systems for managing financial resources, decision-making processes, and budget monitoring arrangements. Finally, it analyzes the relationship between health and social care services delivered, costs, and expenditure, evaluates the impact of financial considerations on individuals using the services, and suggests ways to improve services through changes to financial systems and processes.

Managing Financial Resources in Health and Social Care (MFR)
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Table of Contents
Task 1...............................................................................................................................................3
1.1 Explain the principles of costing and business control systems..............................................3
1.2 Identify information needed to manage financial resources....................................................3
1.3 Explain the regulatory requirements for managing financial resources..................................4
Task 2...............................................................................................................................................5
2.1 Discuss the diverse sources of income that may be encountered in health and social care.......5
2.2 Analyze the factors that may influence the availability of financial resources in health and
social care organizations..................................................................................................................5
2.3 Review different types of budget expenditure in health and social care organisations.............6
Task 3...............................................................................................................................................7
3.1 Explain how financial shortfalls can be managed.....................................................................7
3.2 Explain the actions to be taken in the event of suspected fraud................................................7
Task 4...............................................................................................................................................8
Executive Summary.........................................................................................................................8
Introduction......................................................................................................................................8
1.4 Evaluate systems for managing financial resources in a health or care organization................8
2.4 Evaluate how decisions about expenditure are made within a health or social care
organization.....................................................................................................................................9
3.3 Evaluate budget monitoring arrangements in a health or social care organization...................9
4.1 Identify information required to make financial decisions relating to a health and social care
service............................................................................................................................................10
4.2 Analyse the relationship between a health and social care service delivered, costs and
expenditure....................................................................................................................................10
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4.3 Evaluate how financial considerations impact upon an individual using the health and social
care service....................................................................................................................................10
4.4 Suggest ways to improve the health and social care service through changes to financial
systems and processes....................................................................................................................11
Conclusion.....................................................................................................................................12
Reference list.................................................................................................................................13
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Task 1
1.1 Explain the principles of costing and business control systems
Costing and business control systems are one of the most important factors of a business. Cost is
the amount paid or sacrificed for purchasing or buying something (Drury, 2013). On the other
hand, business control systems are the systems, which help in protecting businesses from
careless, uninformed and careless decisions (Chang, 2016). The following are the principles of
costing and business control systems -
 Cost control - Cost control refers to the technique with which the costs of an organization
can be controlled. One of the basic principles of costing and business control systems is
cost control. The costs in a health and social care organization can be controlled with
different techniques such as variance analysis, standard costing, etc. Cost benefit analysis - The cost benefit analysis is another principle of costing and
business control systems, which quantifies costs as well as benefits of a specific decision
or project (Ferwerda, 2014). This principle helps in evaluating the benefits from the costs
spent in a business.
 Break even - The breakeven analysis is an analysis that helps in determining the point at
which the revenues of an organization are equal to its costs (Morgan et al., 2015). This is
another principle of costing and business control systems.
1.2 Identify information needed to manage financial resources
There are different types of information, which is needed in order to manage the financial
resources of an organization. The following are the information needed for managing financial
resources in a health and social care organization -
 Business costs - The business costs spent by an organization are important to be derived
for managing financial resources of an organization (Hair et al., 2015). For example, a
health and social care organization should be deriving information about all the cost it
spends for its people, financing, equipment, consumable items, buildings, administration,
etc. in order to manage its finances in a better way.
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 Income streams - The income streams of an organization should also be derived for
better management of financial resources (Sylvester, 2014). For example, a health and
social care organization can have different revenue streams such as revenue from its
patients, revenue from subletting space, etc. These streams should be realized and the
flow of revenue must be observed in order to ensure proper management of financial
resources.
 External influences and trends - The external influences and trends in the business
environment of an organization also affect upon the financial resources of the
organization. For example, a health and social care organization must be ensuring the
changes in the policies in the health care sector, the competitive factors in the external
environment and the legal requirements to be complied with in order to ensure effective
financial resource management.
1.3 Explain the regulatory requirements for managing financial resources
There are different types of regulatory requirements that an organization requires to comply with
in order to manage its financial resources. The following are the regulatory requirements for a
health and social care organization for managing financial resources -
 Monitor - This is a major regulatory requirement of a health and social care organization.
The monitor has the responsibility of regulating all the NHS-funded service providers
(England and Care Quality Commission, 2014). Audit - Audit is also an important regulatory requirement for managing financial
resources of an organization. The financial resources of a health and social care
organization can also be managed through audit.
 Health and Social Care Act 2012 - The Health and Social Care Act 2012 is an act of the
UK Government that states various kinds of regulatory requirements for a health and
social care organization, which is also essential for managing financial resources
(Legislation.gov.uk, 2018).
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Task 2
2.1 Discuss the diverse sources of income that may be encountered in health and social care
An organization can derive funds from various sources. The different sources of income, which
may be used in a health and social care organization, are as follows -
 Public sources - An organization can derive income from different public sources. For
example, issue of equity shares are the most effective source of raising funds from public.
Trade credit can also be used for acquiring funds. Private sources - The private sources of income such as retained profit, sale of assets, etc.
can also be used in a health and social care organization for generating income. Local sources - Income can also be generated in an organization from local funding
sources. For example, the local government of an area can provide funds for developing
the health and social care organizations in the area.
 National sources - The national funding sources and grants can also be used in a health
and social care organization as a source of income. For example, the funding streams of
the NHS are a national source of income for health and social care organizations
(England, 2016).
2.2 Analyze the factors that may influence the availability of financial resources in health
and social care organizations
In spite of the availability of different sources of funding for health and social care organizations,
there are different factors that might be influencing the availability of financial resources of the
organizations (Quadlin, 2017). A few factors are as follows -
 Government policies - The policies of the government in which a health and social care
organization operates directly affects the financial resource availability in the
organization. For example, any changes in the PCT-CCGs will be having a direct effect
on a health and social care organization in England (Folland et al., 2016).
 Geographical location - The financial resources of a health and social care organization
are also influenced with the geographical location in which the organization is located.
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This is because the geographical location is the reason for staff availability, kinds of
service users, fund availability, etc.
 Funding priorities - Funding priorities within the health and social care sector depends
on the healthcare systems prevailing in the country. For example, the funding priorities of
a health and social care organization in England depend on the framework of the
healthcare system of England.
2.3 Review different types of budget expenditure in health and social care organisations
A health and social care organization has different kinds of budget expenditures (Arabnejad and
Barbosa, 2014). A few budget expenditures of health and social care organizations are as follows
-  Cost centre - Cost centers, or the areas of operations for which a health and social care
organization spends money is a budgeted expenditure of health and social care
organizations. Project management - The different projects undertaken in a health and social care
organization is also a budgeted expenditure of health and social care organizations. Outsourcing contract - Outsourcing contracts in a health and social care organization,
such as contracts for availing services from third parties in order to provide services to
customers is another budgeted expenditure of a health and social care organization.
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Task 3
3.1 Explain how financial shortfalls can be managed.
Different types of financial shortfalls can arise in an organization (Chen, 2018). The financial
shortfalls in a health and social care organization can be managed in the following ways -
 Reserve funds - All health and social care organizations must be keeping reserve funds in
order to manage its financial shortfalls. Virement - Virement is another way in which budget heads can be moved without
affecting the target bottom line through which financial shortfalls can be reduced and
managed.
 Alternative external income sources - A health and social care organization can also take
the help of alternative external income sources such as equity funding in order to manage
the financial shortfalls of the organization.
3.2 Explain the actions to be taken in the event of suspected fraud
Fraud is any act, which is done willfully to gain undue advantage. It is a crime done intentionally
and results in having mens rea over the inclusion of it. Fraud can be identified with the risk in the
organization. Whenever any fraud is ascertained in the course of any proceedings then the
priority lies on controlling the fraud and measures are thereby undertaken to ensure that fraud
does not happen in the future. There is provision of penalty which on the default of the health
and social care organization. There may arise unevenness in the functioning of the organization
so it has to be curtailed. The agencies operating for the prevention of the crimes related to the
fraud are the governmental authorities enshrined with the task of curbing the wrongdoers in their
function as the fraudsters.
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Task 4
Executive Summary
The assignment provided the detailed scenario regarding the implementation of the measures that
are to be ascertained during the course of proceedings of the management. It provided the
detailed aspect as to the configuration of the policies that are being undertaken to check the
financial budget of the organization and the measures that are to be initiated in preventing the
errors prevailing the functioning of the management. The implementation of the policies
regarding the functioning of the organization would be helpful in the effective functioning of the
organization. Measures are to be undertaken to initiate the development in the field of effective
management of the organization. In this section, Care UK organization has been chosen.
The review of the organization has to the undertaken by the management to eliminate the lacuna
prevailing in the management. The management of the organization is to be specific regarding
the proper and the effective management of the organization and any deficiency is to be
configured at the earliest so as to help in the progressive development of the organization
simultaneously.
Introduction
Health care organization provides health care facilities to the people in need. It is providing of
medical solutions to the patients. The provision of the health care lies in providing treatment to
the people infected by any kind of diseases. In this assignment the financial resources of the
health care organization will be discussed which will provide the scenario as to the effective
management of the financial resources of the organization simultaneously. The efficiency in the
organization can be managed by transparency in the functioning of the organization. This section
focuses on the financial decision making of the organization concurrently.
1.4 Evaluate systems for managing financial resources in a health or care organization
Managing the financial resources of the organization is one of the prime aspects of the
organization (Bryson, 2018). A financial resource provides the details regarding the management
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of the finance aspects of the organization. It includes the preparation of the financial statement of
the organization along with the preparation of the profit and loss statement of the organization.
The account includes the cash statement along with the purchase and the sales statement along
with the details regarding the balance sheet of the organization. It would help in the
ascertainment of the revenue earned along with the expenses incurred during the accounting
year.
2.4 Evaluate how decisions about expenditure are made within a health or social care
organization
The decision-making in the organization is one of the vital aspects in ascertaining the future
prospects of the organization. The decision regarding the expenditure can be ascertained after the
configuration of the availability in the organization. The needs and the immediate demands of
the organization are to be estimated which helps in the determination as to the areas where the
expenses are to be executed. It includes executing the financial statements and deciding the
expenditure accordingly. It is one of the vital phases in the organization where the efficiency of
the management has to be at the peak in order (Theaker, 2017). There has to be useful audit of
the organizational financial statements which would ensure the deficiency and immediately.
3.3 Evaluate budget monitoring arrangements in a health or social care organization
Budget is one of the key elements of the organization. It includes the framework regarding the
income and the expense statement of the organization. The monitoring of the budget is the duty
of the management who is to ascertain the budget arrangements of the organization. The analysis
includes the past and the present analysis which is to determine the future prospects of the
organization. The detailed monitoring of the budget arrangement helps in the determination of
the expenses and the income stature of the organization. It acts as the review for the functioning
of the organization (Scott, 2015). A proper and effective budget monitoring can enhance the
effectiveness of the organization.
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4.1 Identify information required to make financial decisions relating to a health and social
care service
Decision making of the organization depends largely on the financial decision making of the
organization. The information required for the financial decision-making can be gathered from
the financial statements of the organization. The financial decision making of the organization
from the past records helps in the determination of the records for the future projection of the
budget. The vouchers of the financial statements along with the income statement help in getting
the information regarding the functioning of the organization. The present and the past records
are the defining statements as to the projection of the financial statements of the organization and
acts as the draft for the organization.
4.2 Analyze the relationship between a health and social care service delivered, costs and
expenditure
The determination of the cost and the expenses provides the details regarding the budgets of the
organization (Buick et al., 2015). The relationship of the costs and the expenditure is the
effective measure in the ascertainment of the annual report of the organization significantly. The
analysis of the organization can be ascertained by the projection of the reports of the
organization simultaneously. The income and the expenditure statement provide the detailed
scenario in the annual report of the organization. The statement of the organization regarding the
income and expenditure helps in chalking out the details regarding the future projects of the
organization simultaneously.
4.3 Evaluate how financial considerations impact upon an individual using the health and
social care service
The expenses of the organization with the installation of the machines add to the increase in the
service charges accordingly (Galar et al., 2017). The increase in the service charges does add to
the increase in the expenses incurred by the individual. The financial services of the organization
tend to increase abruptly. The enhancement in the services does affect the budget of the
individual simultaneously. Moreover, the increase in the price of the medicine does add to the
expense of the services simultaneously. The increase in the prices does yield revenue for the
organization but it does affect the financial budget of the organization significantly.
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4.4 Suggest ways to improve the health and social care service through changes to financial
systems and processes.
The budget scenario in the organization can be improved by the proper and effective audit of the
prices that are being charged by the individuals (Argyris, 2017). The curtailment in the prices of
the health and the social care service does lead to decrease in the prices of the products which
add to improve in the financial process of the organization simultaneously. There has to be the
inclusion of continuous review on the part of the management, which can decide the budget
management of the organization concurrently. The efficiency of the organization can be
enhanced by the inclusion of the measures that are being discussed there under (Petro, and
Gardiner, 2015).
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Conclusion
From the above discussion, it can be ascertained that the finance department plays an effective
role in the functioning of the organization. The detailed analysis of the budget helps in the
ascertainment of the proper and effective utilization of the budget of the organization. The
efficiency of the organization can be configured by the application of the audit management of
the organization. It helps in the determination of the policies that will be helpful in the future
projection of the financial statement. The analysis of the financial statement helps in the proper
and efficient execution of the budget management of the organization.
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