Financial Management Strategies in Health and Social Care: A Report

This report delves into the intricacies of financial management within the health and social care sector. It begins by outlining the fundamental principles of costing and business control systems, emphasizing the importance of information in managing financial resources and adhering to regulatory requirements. The report then explores diverse income sources, factors influencing finance availability, and the review of project budgets, including the Going it Alone project. It assesses decisions on expenditure, addresses budget shortfalls, and outlines actions to be taken in cases of suspected fraud. Furthermore, the report examines budget monitoring arrangements and the information required for financial decision-making, considering the impact of financial considerations on individuals and suggesting ways to improve health and social care services. The report also analyzes the Bridge Project, a Youthscape initiative, to illustrate practical applications of financial management strategies, including cost center analysis and project management techniques.

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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..........................................................2
1.3 Regulatory requirement for managing financial resources..............................................3
1.4 Evaluation for managing financial resources in HSC......................................................4
TASK 2............................................................................................................................................4
2.1 Diverse Sources of Income...............................................................................................4
2.2 Factors influencing the availability of finance.................................................................5
2.3 Review of the project budgets..........................................................................................5
2.4 Evaluation of decisions on expenditure on project...........................................................6
TASK 3............................................................................................................................................6
AC 3.1 managing the budget shortfalls..................................................................................6
AC 3.2 Actions to be taken in the event of suspected fraud...................................................7
AC 3.3 budget monitoring arrangements...............................................................................7
TASK 4............................................................................................................................................8
AC 4.1 information required to make financial decision.......................................................8
AC 4.2 Health and social care service delivered, cost and expenditures...............................8
AC 4.3 Impact of financial consideration upon an individual................................................9
AC 4.4 Suggest ways to improve the social and health care services....................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
In the present scenario, finance is the essential aspect that helps the different business
entities to grow and develop in a systematic manner with the proper management of finance. In
order to be strong while carrying out the operations the business entity needs to have ample
amount of finance. Finance refers the funds that are obtained to carry out the different functions.
After the funds are obtained it is necessary to manage it in order to acquire the resources that are
essential for development. This report discuss about managing the finance in order to handle the
different issues that are faced in Health and social care.
TASK 1
1.1 Principles of costing and business control system
As the major issue that is faced by the Bridge Project is the mental health problem related
of the young people. It needed to be analyzed in a proper manner to effective manage the
resources in order to deal with it in an appropriate manner. The employees need to effectively
train to handle the mental problem.
Cost centre: There is different kind of cost centres that contributes cost to the company.
They are responsible for managing their cost not the revenues. It includes marketing department,
human resource department, customer service department and research and development
department. Research and development cost centre at health and social care comply the research
about the customer diseases that are increasing at higher the rates. It helps to diagnose their
health problems through providing required services. It also may yield innovations to the
company. Further, marketing department includes marketing their products and services in order
to provide information to customers and aware them (Shi and Singh, 2014). However, human
resource department at HSC manage their employees and make policies for their personnel so as
to improve their performance. Further, customer service department invest in public service so as
to increase the number of customer. This in turn, helps to increase customer loyalty in a great
manner.
Cost control through Budget: Budget is an effective tool for managing the overall cost
to the company. It is because all the responsible cost centres are responsible for cutting their
expenditures and generate unexpected revenues in order to increase the business performance.
The budget is prepared here through all the estimated cash inflows and cash outflows.
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According to the presented cash budget sales department will be responsible to achieve
sales target. However, human resource department has to maintain the staff salaries at budgeted
figures. Research and development department maintain their expenses up to 10000. Further,
marketing overhead of the business should not be more than 8000. Thus, it is clear than it helps
to establish an effective cost control mechanism. Further, in case of deviations between budgeted
and actual values firm can take corrective actions so as to eliminate it.
1.2 Information needed to manage financial resources
While preparing the budget plan the company is considering various factors which
directly affect the cost to the project and the efficient use of financial resources. The project is
based on estimated costs and financial resources used for the estimation, which is listed below.
Types of Cost Financial Resources
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Direct cost: The cost that will directly affect
the project. For example labour salary, staff
and employee salary, petrol exp. For
ambulance, medicine expenditure, staff
training expenditure etc.
The budget is based on the resources of finance
like ratio analysis, fund flow and cash flow,
Profit and loss account, balance sheet, income
statement etc.
Indirect Cost: This will affect indirectly to the
project like CFO remuneration, overtime
payment, apparatus buying charges, beds
charges etc.
The above financial resources help in decision
making about the project and the profits which
will be made out of it (Hofmarcher and
Quentin, 2012). Private finance, outsourcing,
inter agency partnerships are also the sources
of finance.
Other costs like joint costs, purchase costs,
avoidable costs etc. also affect the budget
prepared.
The voluntary income which is earned by the
youth is also to be accounted for. And the
income from statutory sources is also
measured.
The team leader will analyse the above financial resources and costs to manage them
effectively so that control could be established in the budget prepared by the CFO.
1.3 Regulatory requirement for managing financial resources
The financial resources are required to be managed for better public services. Since this
project is made for the youngsters and it is a social cause therefore financial resources are most
important for providing livelihood of disable people and providing them self funded supported
livelihood. Thus, financial resource management is relevant to every aspect of this project from
the smallest transaction to the largest one. The decisions taken for financial resources are
required to be managed in the manner provided by the department for health care so that proper
decision making can be done (Swayne, Duncan and Ginter, 2012). The budget is prepared as per
the regulatory requirements with the help of these financial resources. The given budget reflects
the sources of income, the costs to be incurred, and expenditures already incurred on the project.
The planning for this project is long term by considering the cost benefit analysis. The team
leader is not supposed to ignore the financial risk attached with the financial resources. The
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training program is all about to make the team members understand their work profile in relation
to the budget prepared for the organization.
1.4 Evaluation for managing financial resources in HSC
The Input and output budgets are need to be analysed for the evaluation of financial
resources in health and social care. This Bridge project is working on the issue of social care for
youth scape and for this step is also taken by the youth. The output budget will help in analyse
what type of financial resources are to be managed for the cause and input budget will elaborate
the technique of what actions to be taken for managing the financial resources. The good
financial resource management will lead the project to success whereas the poor financial
management will lead the project to failure. The financial resources obtained by public funds
such as public appropriations, contracts with other agencies, loans, gifts. Income from sales and
user fees can be managed with the help of government also (Managing financial resources to
deliver public services, 2008). Whereas private funds like endowment income, private
investment are utilised in such way that the balance between the cost and the finances is
maintained. Cost and benefit analysis is also used by the company for analysing the cost to the
project and its benefits as well. Some activities which are out of the work area of the team can be
outsourced from other agencies so that proper utilisation of financial resources can be made and
budgeted ratios can be achieved effectively.
TASK 2
2.1 Diverse Sources of Income
Since the funding for the seven houses for the project known as Going it Alone, is given
by Youthscape itself with money came from various sources like public, private, voluntary,
local, national, renting of property, government grants received, donations received, fund raising
drives like schools, associations, by selling products, by organizing events, by organizing the
weekend activities, providing volunteers, rendering services, technical skills, training, by getting
adopted, by publishing newsletters, website advertisement etc. The managers of different houses
can collect the funds from conducting any of the above mentioned activity. The income earned
should be from any of the above activity and not by an illegal activity like smuggling,
speculation etc. The cause of this project is to provide residence to those who are in need which
is a gentle step towards humanity so the income should be earned from valid sources which are
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not prohibited by the government. The examples of these sources of income are donations can be
obtained from corporate, foreign funding agencies, charitable trusts, individuals etc. Fund raising
drives whether by their own or with channel partners like schools and ladies club. Selling
products made by the organization and the teams or by others whether old or new goods. Events
like dramas or weekend activities for families by the managers of this house. For the funding of
this project they can render services like making clothes for a shop, keeping the area clean,
tending a garden and distributing flyers etc.
2.2 Factors influencing the availability of finance
The sources of income which are discussed previously are influenced by factors like
funding priorities, agency objectives and policies, private finance terms and conditions,
outsourcing of resources, inter agency partnerships, government policies, geography and types of
services. This project is viable from financial view point if the costs and budgets are managed,
the financial planning is proper, reserve funds are built up, performance of the organisation and
the grants received from the government is managed (Enthoven, 2014). The sources of income
which are earned by the Young scape group, working for a good cause, are influenced by the
realistic budgets and plans, cash flow forecasts, other incoming payments, and by building up the
cash reserves.
These factors can be integrated together and a balance can be maintained. For example
suppose a company Xyz Ltd. Is working for old age homes and it provides free shelter to people
who are in need of them, for which it requires 1500 million pounds, the said company has sold
some products and rendered services to raise funds for financing the project, it raised about 500
million pounds from the sale and services, the remaining 1000 million pounds will be funded by
using the government grants. The cost to this funding is the terms and conditions attached to
grants and the cost of material, labour and overheads which will be incurred by the managers for
producing goods and then selling them. It is difficult for these managers to make the funds
available in the situation of houses stayed open.
2.3 Review of the project budgets
The meeting is conducted to give knowledge about the sources of funding the housing
projects and the factors which affects the finance, to the managers of these seven houses for the
project of going it alone. The review on the cost center involved in the Bridge project, the project
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management techniques that can be used for the Going it Alone project and the outsourcing
contracts adopted by the Youth Scape are presented here:1. Cost Centers for Bridge project: Since the bridge project is made by Youth Scape for
young people with mental health problems and run by the young people itself so to fund
these projects cost can be incurred in various departments of the organization like
purchase department will provide the purchase cost for this project, sales department will
generate cash inflows from the goods and services sold (Gulliford and Morgan, 2013).
Marketing department will promote the cause for which the project has been started.2. Project Management: The Going it Alone project is based on the concept of building
seven houses scattered in different areas in London. The project is to be managed in
terms of sources of funds to be invested, cost to be incurred, time within which such
project is to be completed, financial resources to be used and budget analysis of all the
factors given above.
3. Outsourcing Contracts: Youth scape is running with the objective of social benefits only
and not for profit maximization. The division which is to be outsourced is developed and
adopted by the organization with the analysis of costs and benefits attached to it.
2.4 Evaluation of decisions on expenditure on project
The organization while planning the projects as mentioned above will estimate a budget
for the expenditure to be incurred on the projects. The expenses are both external and internal
which influences the funding from various sources. The expenditure should not be more than the
income which will be earned by the organization; otherwise it will lead the managers to start
more sales of products to increase the earnings (Munn-Giddings and Winter, 2013). The
managers should seek the opinions of other cost centers and departments before spending money
on the project. Internal factors like the budget of the project, past profits etc to be considered and
external factors like different sources of funds to be kept in mind.
TASK 3
AC 3.1 Managing the budget shortfalls
Budget is a statement of estimated future business revenues and expenditures for an
accounting period. It helps to know the cash balance at the end of the period. The cash balance
includes both deficit and surplus. Deficit balance indicates that business expenditures are higher
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than total revenues. It is very necessary for the health and care companies to maintain their
budget so as to reduce shortfalls. There are different ways available to the organization for that
purpose. The most common ways are cutting the expenditures and increasing the business
revenues. Health and social care organization can avail better services to the patients for curing
the diseases in order to get increased revenue (Paulden and Claxton, 2012). Further, sales target
can be decided to meet its in original term. However, through curtailment of unnecessary
business expenditures and remove the unusable or disposable equipment from the operation it
can decrease its total expenses. The organizations have to make strategic and effective policies
for this purpose. Further, through using the business assets efficiently and allocating the
available resources effectively it can improve the total revenues. In addition to it, the available
cash balance of previous period can also be invested to get additional return that helps to get
surplus availability of cash.
AC 3.2 Actions to be taken in the event of suspected fraud
Organization is required to take necessary actions for detecting the fraud in case of any
suspension. The best way of this is to establish effective internal control in the organization. It is
concerned with accounting and auditing process that provides reliable financial reporting. It is a
broad process that comply all the legal requirements, regulations and the business policies in an
effective manner. In this system, the available resources are measured by the organization and
then allocate in best manner (Claxton and et. al., 2011). It helps to control business risk through
preventing frauds. Further, external audit also plays an major role for preventing fraud. Under
this system, services of professional auditors can be taken for verification of financial statements.
Therefore all the members will feel fear to do any fraud.
AC 3.3 Budget monitoring arrangements
It is important for all the health and social care organizations to monitor the budget
information on a regular basis. Better care is the principal and most important objective of all the
health and social care organizations. But deciding only the business goals in not important
organization has to implement it in realistic terms. They have to prepare the budgets through
estimating the expenditures and incomes on a regular basis. Further, they have to assess the
actual incomes and expenditures with the budgeted figures so as to determine deviations
(Maclean and et. al., 2014). In case of higher the expenditures and lower the revenues business
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has to take corrective actions to mitigate it. By doing this, the companies can achieve their
business targets in a best manner.
TASK 4
AC 4.1 information required to make financial decision
Distinct type of information is required for taking financial decisions in health and social
care organizations. It can be collected from the financial statements of the company. For
instance, company’s revenues and expenditures can be identified through the income statements.
It helps to control the business cost through reducing the unnecessary expenditures. Further,
Health and social care organizations can take decisions so as to increase the business revenue in
term of sales. Company can make policies and provide better and qualified customer services for
that purpose. This in turn, the business operational performance can be improved. Moreover, the
balance sheet also provides useful information about the liquidity, solvency, liabilities and the
assets (Glasby, 2012). It helps to determine the financial status of the company. The business can
take financial decisions through assessing their financial performance. The company can increase
the ability so as to enhance its solvency and liquidity position. This in Turn Company can
maintain their financial risk and having adequate availability of working capital to run the
business operations. Further, it helps to increase the efficiency of using the business assets.
Therefore the company can strengthen its position in the market.
AC 4.2 Health and social care service delivered, cost and expenditures
Cost: Health and social care organization cost includes value of resources that are used
for production purpose. There are different types of cost arise such as fixed cost and variable
cost. Fixed cost involves building rent, purchase of equipment, administrative salaries and
training provided to a health professional (Kehusmaa and et. al., 2012). However, variable cost is
volatile in nature. For instance, drugs, consumables, medicines, vaccinations, services provided
and cost for treating a patient.
Expenditures: Health and social care expenditure involves staff salaries, social care
expenditures, short term and long term support expenditures. It includes business service
strategy, expenditures on adult learning disabilities, mental health needs and physical disabilities.
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Further, the companies also provides adult grants hence, includes in total expenditures. On
contrary, expenditure also arises for acquiring the resources and making operational payments.
Services delivered: Health and social care organizations provide distinct kind of services
to the patients. It includes services at residential, home care services, nursing care services and
community care service expenditures so as to prohibiting the diseases (Ridde and Morestin,
2011).
AC 4.3 Impact of financial consideration upon an individual
Financial consideration affects the individuals using health and social care services to a
great extent. The health and care organizations use an effective service delivery mode in order to
treat their diseases. Patients who suffer from different chronic and panic conditions influenced
through the service delivery mode. For instance, services provided at residential will highly
satisfy the customer needs. Another, health insurance is also provided to the customers.
Moreover, medicare program is also oriented for providing medicare benefits (Cameron and et.
al., 2012). But the problem with the insurance is that it does not cover all the sufferings. Further,
most of the people said that it is very difficult to getting adequate health insurance coverage. In
addition to it, implementation of service standards in the organization functioning level also
gains significance that affects the individuals. On contrary, the staffing levels and the respective
changes and available consumables also impact it (Bradley and et. al., 2011). Increase the
consumable availability impacts the individual in a positive direction. However, in case of
withdrawal or reduction in services provided will decrease the number of customers.
AC 4.4 Suggest ways to improve the social and health care services
All the health and social care organization should provide qualified customer services at
reasonable charges helps to increase the customer loyalty. Moreover, through changing the
financial system and process they can increase their performances. The organizations have to
assess their expenditures and cost so as to reduce it. This in turn, the organization can improve its
revenue results in improved business performance. They should estimate per head cost through
determining cost for all the cost centers. They should maintain proper balance between the
expenditures and generated level of incomes. They should match their available resources to
fulfill the social needs. In addition to it, the management consultants also can take effective
managerial decisions (Green and Thorogood, 2013). It helps to moving forward the business in
right direction through increasing the customer satisfaction level. On contrary, performance
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models can also be implemented to measure the business performance and improve it. Further,
they should determine their priority areas. Therefore it become clear that through reducing the
organization cost and expenditures and treat the patient diseases effectively it can improve the
operational results. This in turn, organization can make development for the future period.
CONCLUSION
On the basis of above report it can be concluded that health and social care organization
can improve the business growth through providing better customer services. Further, the report
described that budgeting decisions helps the business to control its expenditures and generate
target revenues. In addition to it, the internal control system should be established so as to
prevent any frauds. This in turn, helps to ensure long term business sustainability.
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REFERENCES
Books and Journals
Bradley, E.H. and et. al., 2011. Health and social services expenditures: associations with health
outcomes. BMJ quality & safety, pp.bmjqs-2010.
Cameron, A. and et. al., 2012. Factors that promote and hinder joint and integrated working
between health and social care services. Research Briefing. 41.
Claxton, K. and et. al., 2011. Discounting and decision making in the economic evaluation of
health‐care technologies. Health economics, 20(1). pp. 2-15.
Enthoven, A.C., 2014. Theory and practice of managed competition in health care finance.
Elsevier.
Glasby, J., 2012. Understanding health and social care. Policy Press.
Green, J. and Thorogood, N., 2013. Qualitative methods for health research. Sage.
Gulliford, M. and Morgan, M. eds., 2013. Access to health care. Routledge.
Hofmarcher, M.M. and Quentin, W., 2012. Austria: health system review. Health systems in
transition. 15(7). pp. 1-292.
Kehusmaa, S. and et. al., 2012. Factors associated with the utilization and costs of health and
social services in frail elderly patients. BMC health services research. 12(1). p.204.
Maclean, J.C. and et. al., 2014. Mental Health and High‐Cost Health Care Utilization: New
Evidence from Axis II Disorders. Health services research. 49(2). pp. 683-704.
Munn-Giddings, C. and Winter, R., 2013. A handbook for action research in health and social
care. Routledge.
Paulden, M. and Claxton, K., 2012. Budget allocation and the revealed social rate of time
preference for health. Health economics. 21(5). pp. 612-618.
Ridde, V. and Morestin, F., 2011. A scoping review of the literature on the abolition of user fees
in health care services in Africa. Health policy and planning, 26(1). pp. 1-11.
Shi, L. and Singh, D.A., 2014. Delivering health care in America. Jones & Bartlett Learning.
Swayne, L.E., Duncan, W.J. and Ginter, P.M., 2012. Strategic management of health care
organizations. John Wiley & Sons.
Online
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Managing financial resources to deliver public services, 2008. [Pdf]. Available through:
<http://www.publications.parliament.uk/pa/cm200708/cmselect/cmpubacc/519/519.pdf>.
[Accessed on 22nd December, 2015].
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