Airedale NHS Financial Resource Management: Detailed Report

This report provides a detailed analysis of financial resource management within the healthcare sector, using Airedale NHS as a case study. It begins by exploring the principles of costing and business control systems, including costs, income, expenditure, and cost-benefit analysis. The report then examines the information needed to effectively manage financial resources, such as employee data, financial requirements, external factors, and equipment needs. Regulatory requirements impacting financial management, including legislation, codes of practice, accountability, and auditing, are also discussed. The report further analyzes diverse income sources in health and social care, including public, private, and voluntary funding, along with factors influencing the availability of financial resources. Different types of budget expenditures are identified. The report analyzes systems for managing financial resources, decisions regarding healthcare expenditure, budget monitoring arrangements, and the information needed for effective financial decision-making. It also explores the relationship between healthcare service delivery, costs, and expenditures, and the impact of financial considerations on service users, concluding with ways to improve health and social care services through changes in financial systems.

Managing Financial
Resources

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Principles of costing and business control systems...............................................................3
1.2 Information needed to manage financial resources...............................................................4
1.3 Regulatory requirements which helps in management of financial resources......................5
TASK 2............................................................................................................................................6
2.1 Diverse sources of income encountered in health and social care........................................6
2.2 Factors which impacts the availability of financial resources in health and social care.......6
2.3 Different types of budget expenditure in health and social care organisations.....................7
TASK 3............................................................................................................................................8
Covered in PPT...........................................................................................................................8
TASK 4............................................................................................................................................8
1.4 Analysis of the systems which helps in managing financial resources.................................8
2.4 Analysis about the decisions which are taken in health-care organisation regarding
expenditure..................................................................................................................................9
3.3 Budget monitoring arrangements in health and social care organisation.............................9
4.1 Identification of the information which helps to make financial decisions........................10
4.2 Relationship between a health and social care service delivered, costs and expenditures..11
4.3 Impact of financial considerations upon individual using health and social care..............11
4.4 Ways to improve health and social care service through change in financial systems.......12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Finance is an important component which helps in effective performance of different
functions of organisation working in any sector. It is the duty of the manager to understand about
the principles and techniques of accounting which helps in effective management of financial
resources. Financial resources means the money which is available to them in form of cash and
liquid securities which help in performance of day to day operations. Securing such resources
helps in effective and efficient operations to attain success. Management of financial resources
also hold an important position in health care sector. In this regard, manager of organisation
needs to monitor different budgets and documents like profit and loss account, balance sheet, etc.
Airedale Airedale NHS provides clinical services in the UK (Ahnquist, Wamala and Lindstrom,
2012).
In the present report, principles of costing and business control systems as well as
information which helps in management of financial resources, regulatory requirements,
different kind of sources of income and factors which have influence upon availability of
financial resources and different types of budget expenditures will be discussed. Also,
management of financial shortfalls, budget monitoring arrangements and information which
helps to make effective decision-making, impact of financial considerations upon individual
using health and care services and ways to improve health and social care service will be studied
here.
TASK 1
1.1 Principles of costing and business control systems
Costs: It is the value of money which is paid for acquiring something new which helps in
effective performance of operations. Different items which are needed to consider includes
efforts, risk associated, time consumed and material required as well as different resources. Cost
which is related to prior period is not considered. For example: Airedale Airedale NHSacquires
equipment then cost includes production and delivering charges of such equipment.
Income: It is considered as the money received by Airedale Airedale NHSin respect of
services which are provided to their patients. It is further used to operate day to day activities
effectively.

Cost benefit analysis: It helps in evaluation of the decisions taken by management. The
benefits which are received from business activities are added and all costs which are incurred in
this regard are subtracted.
Expenditure: In context of Airedale NHS, expenditure means money spent on acquiring
medical equipment. Money is spent in the form of cash or cash equivalents. It can be of two
types i.e. revenue and capital expenditure. Revenue expenditure is incurred by care home
regarding operations of day to day functions. On the other hand, capital expenditure is incurred
on purchase of fixed assets and machineries.
Cost centre: It is considered as a business control system. It is a separate department in
Airedale Airedale NHS which is responsible for the costs incurred. They do not take care about
the activities regarding generation of profit through use of their assets. It helps to control costs
below the budget and contributes indirectly to improve their profits.
Break-even: This analysis helps to determine the activities which are needed to perform
well to attain their break-even point. It is the point where cited care home reaches to the situation
of no profit and loss. So, it plays an effective control regarding controlling of different costs like
fixed and variable (Almalki, FitzGerald and Clark, 2011).
1.2 Information needed to manage financial resources
Management of financial resources is important for Airedale NHSto attain success in
their business operations. In this regard, large number of various information are required
regarding different aspects. It helps the manager of Airedale NHSto draw important conclusion
and improve their decision making. Different business information needed are mentioned as
below:
 Employees: The workforce which is working in Airedale NHShas main aim is to
effectively provide their medical services in UK. Determination of number of employees
helps in effective disbursement of amount of salaries.
 Finance: It includes determination of the amount of funds which is required for the
performance of their diversified services regarding basic medical facilities, optical care,
etc. It provides an opportunity to raise funds as per the requirements.
 External factors: There are many factors which affect the financial resources. Such
factors include change in policies, competitive factors and legal requirements. Non
fulfilment of legal requirements affect the government support towards NHS. So, it is

duty of manager to follow all legal requirements which help in raising the funds from
their different investors and governmental authorities.
 Equipment: In health-care industry, there are frequent changes that happen in medical
equipment which makes the services better. It brings an obligation upon the management
to adopt such technologies to improve their performance. It requires effective
management of funds as per the requirements.
1.3 Regulatory requirements which helps in management of financial resources
There are many rules and regulations are provided by the government of UK regarding
health acre facilities which is need to implement by Airedale NHS while providing their
functions. It provides the opportunity regarding effective management of their functions as per
such requirements. It also contributes in managing financial resources. Such different regulatory
requirements are mentioned below:
 Legislations and code of practice: There are many legislations which are followed by
NHS. One of the important legislation is Health and safety work Act 174. As per this act,
management of Airedale NHShas the obligation is to take adequate measures which
provides the safety of medical representatives and patients. It helps in their prevention
from unnecessary penalties impose by government. On other hand, application of the
code of conduct provides the direction to workers which improves their performance and
effective use of funds (Boulware And et. al., 2016).
 Accountability: It is the broad concept which includes the provision of management and
costing accounting. It helps the management of Airedale NHS is to prepare different kind
of reports like job costing, performance, inventory management etc. which is used by the
internal parties to take effective decisions. It helps in management of their funds as per
the information attained regarding operations of different departments in NHS. It
provides the opportunity regarding preparation of budgets which directs the employees to
meet such standards.
 Audit: It is considered as the process of examination by independent professional about
all the activities which are happened in NHS. It helps in identification of the issues which
are irrelevant. So, it provides the opportunity regarding improvement of their existing
medical services and saving of costs through removal of unnecessary functions. They

directs regarding effective disbursement of funds in different departments as per their
needs.
TASK 2
2.1 Diverse sources of income encountered in health and social care
Airedale NHS is public organisation which provides free medical facilities in UK. The
main aim of organisation is to provide basic medical facilities to all the individuals of society. To
provides their functions on effective basis requires sufficient amount of funds. There are many
sources from which management of Airedale NHS raise their funds are mentioned below:
 Public: It is the biggest source from where the large number of funds are coming to
support the activities of NHS. Under this option, funds are come in the nature of grants
from governmental authorities. Such sources of funds are called public. Such grants are
free from interest or carry less interest rates. It is difficult to raise funds from public
sources as management is need to fulfil different governmental requirements in this
regard (Cascio, 2018).
 Private: One of the easy available source of funds in front of the management of NHS.
This includes the private organisations, banks and investors. Such funds are come in the
nature of loan. One of the important source under this is bank loans which is easily
available to NHS. It carries the high rate of interest which is need to by the management
within stipulated period of time.
 Voluntary: It is the one of the source from where funds are coming from the outsiders on
voluntary basis. It can be come from two paths like local and national. The amount which
is come from local entities are called as subscriptions which is used by the management
of Airedale NHS to improve their particular services for which such funds are provided to
them. On other hand, donations are come from national entities with the aim of
developing the facilities which are provided to society. In this regard, not need to provide
any returns.
2.2 Factors which impacts the availability of financial resources in health and social care
There are many sources from where funds are easily available to provides their business
functions. It is the capability of the management is to effectively identifies the factors which

impacts their capacity to gather funds from different resources. There are many factors like
funding priorities, agency objectives and policies, private finance, government policies,
geography, type of service etc. which impacts the availability of financial resources.
Consideration of all these factors helps in providing better medical facilities to individuals of
society. Such different factors are mentioned below:
 Funding priorities: One of the factor which reduces the amount of resources from where
Airedale NHS is able to raise their funds. This includes about need of funds for different
objectives like basic needs, healthy communities, vibrant democracies, purchase of
medical equipments etc. So, as per different needs sources of funds are reduced in
number. It means priorities has negative impact upon the availability of funds (Chartier,
2014).
 Government policies: There are many regulations which are provided by government
about effective regulation of financial system. This will restricts them not to provide the
funds to any organisation or institution without fulfilment basic requirements. Also,
provide policies which applies on health and social care homes regarding raising of
funds. This will also has adverse impact upon availability of financial resources.
 Geography: This factor also has large impact upon the availability of resources from
where the funds are available to operate their business functions. If geographical area is
not developed then less amount of sources like banks, financial institutions are available.
But in present case, UK is developed nation where are large number of banks and
Financial institutions are present to provide funds to Airedale NHS(Singer and et. al.,
2011).
2.3 Different types of budget expenditure in health and social care organisations
The main aim of preparing different kind of budgets is to set the standards which directs
the workers and medical representatives of Airedale NHS in providence of their effective
functions. Through such budgets actual performance of workers is determined and compare with
such standards for identification of the deviations. It provides the opportunity to the manager of
Airedale NHS is to develop their skills and accomplish their targets. The different kind of
budgets are mentioned below:
 Cost centre: It is different area in Airedale NHS which helps in controlling costs. This
department is responsible for costs which are incurred in organisation. They does not

focus on earning of the profits and making of investment related decisions. It also known
as expense centre where all cost which are incurred by Airedale NHS while providing
their business activities are pooled at one place. They have the main aim is to make
different budgets and control costs for keeping them under such limits. It provides the
opportunity to the management of Airedale NHS is to effectively utilise their different
resources in smarter ways (Shanks, 2016).
 Project management: Such team of Airedale NHS provides the functions regarding
management of particular projects and complete them within stipulated period of time. It
includes the application of skills, knowledge, tools and techniques which provides the
opportunity regarding fulfilment of the different requirements of project. The different
steps which helps in directing and controlling the project is mentioned below:
- Project conception and initiation: Determination and examination of the idea about
identification of the benefits received by Airedale NHS(Chartier, 2014).
- Project definition and planning: Planning about the overall activities and designing of
framework regarding preparation of budget.
- Project execution: Tasks are distributed among the different teams and disbursement of
responsibilities.
- Project performance and control: Comparison of actual performance with budgeted to
control their work.
- Project close: It is the last stage where all activities are completed and project is accomplished.
TASK 3
Covered in PPT
TASK 4
1.4 Analysis of the systems which helps in managing financial resources
There are many systems which provides the opportunity to the manager of Airedale NHS
is to mange their financial resources effectively. Through implementation of such systems large
number of benefits are gathered by Airedale NHS like satisfaction of patients, build good image,
development of their existing facilities etc. Such different systems are defined below:

 Sources of income: There are many sources of income which can be used by Airedale
NHS in future to raise finance. Such sources are categorised as public, private, voluntary.
Public source of finance includes the grants provided by government, private sources
includes about bank loans, funds from financial institutions etc. and voluntary funds
comes from local and national mediums. Such amounts are considered as charity and
donations (Hunter, 2016).
 Accountabilities: It includes the application of accounting principles and provisions
which helps to determine the information about departments working in NHS. Different
kind of reports helps in management of different areas which in turns improves overall
performance. It improves the decision making of internal parties regarding effective
management of funds.
 Formulation of budgets: Preparation of financial budgets helps in effective allocation of
funds to different departments. It directs them to optimally utilise their funds to attain
maximum returns.
2.4 Analysis about the decisions which are taken in health-care organisation regarding
expenditure
Airedale NHS provides their activities with the aim that nobody deprives from basic
medical facilities. They want to help the society for improving their living standard. To provide
their functions effectively, management of Airedale NHS is need to take various decisions
regarding different aspects like expenditures, current facilities, view of patients etc. One of the
major factor which helps in managing funds in Airedale NHS is controlling of expenditures. So,
the decisions which are taken by management in the regards of expenditure is defined below:
 Financial risk: Identification of risk helps in preparation of contingency provisions
which provides opportunity regarding reduction of their future expenditures through
removal of uncertainties (Kakuma and et. al., 2011).
3.3 Budget monitoring arrangements in health and social care organisation
To control their expenditures need to monitor them continuously. In this regard,
management of Airedale NHS need to adopt different tools and techniques which provides the
opportunity regarding effectively monitor their expenditures on regular basis. Such different
techniques are mentioned below:

 Cash-flows: It is the statement which contains the information regarding the amount of
cash which comes in and and goes out from care home. It helps in determination of the
available amount of cash at the end of the time period. It provides the information
regarding all operational, financial and investment activities. It provides the opportunity
regarding effective management of cash and expenditures (Kirch, Henderson and Dill,
2012).
 Training needs: Lack of training among the workers results in the increase in number of
expenditure through large number of mistakes. In health-care sector, there is nor scope of
mistakes because it effects the life of patients. Identification of training needs and
designing of effective training programmes helps in development of their skills and
knowledges. This will reduces the amount of reductions and staff turnover.
 Implementation of cost control system: It is the system which helps in early
identification of the business expenses to improves their profitability. It helps to oversee
that their actual expenses and more than standard an need to adopt effective policies
which helps in future to reduces their expenditures.
4.1 Identification of the information which helps to make financial decisions
To make effective decisions need to gather important information regarding different
aspects which helps to make better financial decisions. In this regard, need to consider annual
report which include financial statements and balance sheets, provides the information regarding
their incomes, expenses, liabilities and assets. It is observed that there are large number of
difficulties are faced by the management for achievement of their cost reduction targets.
Different aspects which helps to take financial decisions are mentioned below:
 Available information: The information which is available to make better financial
decisions is that issues are arising in staffing related costs. It helps making of effective
policies which makes the whole process of staffing more effective. It is observed that
around £3.1 million is invested to improve their building and equipments. These
information is gathered from financial statements, balance-sheet etc.
 Priorities: Priorities also affects the financial decision making of management. Their
main motive is to provide better services. In this regard. Around £3.1 million is invest in
renovation of the building and implementation of new equipments which helps to provide
better services to patients (Kringos Adn et.al., 2013).

 Sources of income: Determination of current available sources provides the opportunity
to make effective financial decisions. Management of Airedale NHS knew that they have
opportunity to raise funds from government. So, it has direct impact upon their decisions
regarding improvement of existing services.
Statement of net expenditure for the period ended 31 March 2016
4.2 Relationship between a health and social care service delivered, costs and expenditures
The level of service would provided by taking vital information from NHS, while making
their cost expenditure will gather various aspects by which they can take consideration in
examine effectiveness of an organisation.
 Cost-benefit: It is utmost responsible of managers to check and regulation over all
expenses that are being delivery by NHS. This can be done by using proper evaluation as
important tools so that cost and benefits in association can easily be manage. It also
regulate financial feasibility of an organisation over presence of resource of the company.
 Pricing policies: According to the mentioned Airedale NHS pricing policies that are
carefully decided to look their purposes for the betterment of an organisation be
evaluating major factors. They are delivery certain concession to old age people in
treatment or medicine. As they are working as non-profit organisation they would
increase cost of services as their sole motive and they take small portion as profit margin
(Kringos, Boerma, van der Zee and Groenewegen, 2013).

 Purchasing arrangements: This would create maximum responsibilities of managers
those are held responsible for maintaining superior service and quality in more adequate
cost. This would assist and motivate patient to by taking proper accountable for every
issues that make comfortable. Henceforth, care service in health and social safety would
not be attained without evaluating costs or expenses those are associated in various
activities (Luo and et. al., 2012).
4.3 Impact of financial considerations upon individual using health and social care
The financial considerations which are taken by the management of Airedale NHS has
huge impact upon the individual which uses their services are mentioned below:
 Quality of service: It is observed that £3.1 million is invested on buildings and
equipments which helps in improving their existing services. It helps to satisfy the
different requirements of patients and ensures their maximum health.
 Access to service: New medical vans are operated which helps to provide the service
which are not not able to come care homes. It helps to provide services as per their needs
(Naledi, Barron and Schneider, 2011).
4.4 Ways to improve health and social care service through change in financial systems
various type of financial problems occurs with in health and social care sector. For better
operation and utilisation of financial resources it is required to analyse the requirement of
financial resources at initial level. It is considered that there effective analysis of financial
requirement helps to reduce the idleness and misuse of financial resources. There are four major
ways are defined subject to improve health and social care services through financial system:
Investing in innovations
this is one of the essential aspect which helps to utilise the resources in optimum manner.
An organisation can use the financial resources in innovative ideas and plans such as adopting
new technology, investing in technical tools, equipments etc.
Utilisation of finance within leadership programs
Utilisation of finance in leadership programs also one of the common way adopted by
organisation. By providing proper knowledge and skills subject to managing and administration
of health and social care sector.
Planing and structure of finance plan

Pre planing and forecasting of financial resources is also one of the key aspect which
helps to reduce the burden of financial management. More over the task requirements remain
associated with finance plans and management (Richard and Shea, 2011).
CONCLUSION
It has been concluded from the above report that Airedale NHS needs to use effective
principles of accounting which help in preparation of important reports for making effective
internal decisions. Management needs to implement different regulatory aspects like code of
practices, audit, accountability, etc. which help in managing financial resources. There are many
sources of finance like public, private, voluntary, local and national used by care home to
properly conduct their operations in an effective and efficient manner. Through this, large
number of benefits are gathered by care home like better services to patients, building a good
image, higher profitability, etc.

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Online
Financial Management Resources. 2017. [Online]. Available through:
<http://www.minnesotanonprofits.org/nonprofit-resources/financial-management/financial-
managment-resources-overview>.