A Report on Financial Resource Management in Health and Social Care

This report provides an in-depth analysis of financial resource management within the health and social care sector, specifically focusing on Silloth Nursing and Residential Care Home. It begins by exploring the principles of costing and business control systems, emphasizing the importance of accurat...Read More

Managing Financial Resources in
Health and Social Care

Table of Contents
INTRODUCTION.....................................................................................................................................3
TASK 1....................................................................................................................................................3
1.1 The Principle of Costing and Business Control System:..............................................................3
1.2 Information needed to manage financial resources:..................................................................4
1.3Regulatory requirements for managing financial resources:.......................................................4
1.4 System for managing financial resources in a health care organisation:....................................5
Task 2.....................................................................................................................................................5
2.1 Diverse sources of income in health and social care:.................................................................5
2.2 Factors that may influence the availability of financial resources.............................................5
2.3 different types of budget expenditure........................................................................................6
2.4 Decisions about expenditure are made within a health or social care.......................................6
Task 3.....................................................................................................................................................7
3.1 Financial shortfalls can be managed ..........................................................................................7
3.2 The actions to be taken in the event of suspected fraud............................................................7
3.3 The actions to be taken in the event of suspected fraud............................................................7
TASK 4....................................................................................................................................................8
4.1 Information required to make financial decisions.....................................................................8
4.2 Relationship between health and social care service delivered and cost and expenditure........8
4.3 Financial considerations impact upon an individual using the health and social care service .. .8
4.4 Ways to improve the health and social care service through changes to financial systems and
processes..........................................................................................................................................8
CONCLUSION ......................................................................................................................................8

INTRODUCTION
The management of financial resources is very important for any sector or industry.
The financial performance of a company displays its productivity and profitability level. In
health and social care it is very important that the financial resources are used in a very
precise manner (Aras, Aybars, and Kutlu, 2010). This sector has to manage these factors
which have direct or indirect impact on cost and expenditure as well as income of the health
and social care organisations. In this report the author has evaluated the current systems
which are responsible with managing the financial resources in Silloth Nursing and
Residential Care Home(health and social care sector). It is very important as reduction and
proper management of financial resources will enable the organisation in developing itself.
This will provide a core understanding of different systems available for the medical
companies.
TASK 1
1.1 The Principle of Costing and Business Control System:
Costing refers to the technique and procedure by which the cost of a product or
services are ascertained by the company. Cost is that amount which is paid for the a order of
product and service (Broadbent, and Cullen, 2012). Costing includes many valuation systems
which helps in determining the value of goods and services.
There are six principles of costing:
 Materiality: It states about the significance of transaction, balance and errors.
 Stakeholder engagement: Involving the parties for implementing decisions.
 Consistency: It states about same monetary plans for whole organisation
 Data accuracy: Accuracy in data evaluation for better control.
 Transparency: It should exist in auditing and monitoring
 Cost efficiency: To develop better control system.
Business control systems are those which established to ensure proper control and
monitoring of the business and its activities. These system helps the auditor in auditing the
organisation performance. There are certain principles which are followed before establishing
the business control systems.
 Prevention Control: It is used as to reduce the chances of bad situations.

 Security: A safe environment has to be provided to staff
 Defective Control: Determining the inaccuracies.
 Managing Control issues:: The compliance issues has to be managed.
1.2 Information needed to manage financial resources:
The financial information is required as to ensure development of fiscal resources in
the health and social care organisation. The data is collected from the past performance
reports which are taken as a basis for future planning and development. These reports are also
evaluated as to check where the shortcoming existed. This enables the managers in availing
the information which states about the issues, problems and crisis that took place in past.
A proper information management will help the organisation in creating a better,
transparent, accurate accounting information, short term and long term forecast, auditing
reports, etc. it also helps in establishing a strong risk management system in place (Conway,
2013). The information used for managing financial resources will state about people,
equipment, building, consumable item, administration, trends, external influencing factors,
costs, legal requirements. This information will make the organisation more effective and
efficient as the evaluation and m,monitoring of the system will be much easier.
1.3Regulatory requirements for managing financial resources:
There are many organisations which are serving in the health and social care sector.
Their main aim is to ensure a better health care environment for the society. But to make sure
that the companies provide standardised services to the people, the United Kingdom
government has formed few legislation and laws. These rules and regulations provide a
platform to the organisation serving in the health and social care sector to make their services
as per the defined laws (Coombs, 2014). These laws also ensures a proactive role of
government in the sector which is necessary as to avoid any market shocks and shortcoming
in the system to hamper the medical services.
The National Health Services(NHS) and the United Kingdom government has
formulated few laws such as anti discriminatory laws and equality laws which states that all
the patients has to be treated without any discrimination. Also the organisations have to get a
licence before serving in the sector.
1.4 System for managing financial resources in a health care organisation:
It is very important for the Silloth Nursing and residential care home to manage the
financial resources in the organisation. The financial management system(FMS) is made as to

ensure a proper fiscal and monetary management of resources. The system is made up of
various tools and process which enables the managers to do effective control and allocate the
resources to different activities (Epstein, and Buhovac, 2014). The main aim of financial
management system is to reduce the wastage and improve efficiency of every input made in
monetary terms.
The process of financial system is complex but it is very important, it tracks various
activities such as, salary, utilities, material purchasing, people, selling, income, etc. these are
also called as budge line items. These activities have to be recorded in a proper time frame.
This will ensure financial stability in the organisation system. Also it will enable efficient and
effective use of resources for development of services.
Task 2
2.1 Diverse sources of income in health and social care:
The income of Silloth Nursing and residential care home income usually comes from
the patients and the corporate entities. There is a funding mechanism which has been
developed by the corporates in order to provide funding for the health and social care
organisations. This mechanism have certain taxation, social insurance, grants, loans benefits.
There are funds which are donated by the charitable trust and welfare programs. The people
who have interest in improving the services of organisation also provide funds from their end.
The organisation also creates a fund by pooling different income sources and revenue
collection. This helps in reducing the financial risk which exist in a single function.
Government of United Kingdom also have certain medical funds which provide different
benefits to the organisation in health and social care and its staff (Lusardi, 2011). The whole
medical sector in UK get supported by the society and government which enables it to deliver
much better services to the people and society.
2.2 Factors that may influence the availability of financial resources
It is essential for a business organization is to analyses and evaluate various resources of
financial availability within the business organization. For a health care company this is more
critical because there are various factors which can influenced the availability of finance
which are given below:

Capital infusion: This is one of the most important factor in a business organization where
financial institutions are required profitability forecasting which so that they can ensure that
the loan amount will be recovered.
Lack of credible financial statement: This is another factors which is related with various
financial statement such as income statement, trading and profit and loss account, balance
sheet. This is responsibility of cited business health care organization is to make these
statement realistic and reliable (Lusardi, 2011). Banks and financial institutions can be
providing capital on the basis of these statement.
2.3 different types of budget expenditure
Budget is a financial statement which is related with the estimated cost and expenditure for a
given period of time. These budget basically based on yearly basis. This is one of the most
usable tool for controlling cost and expenditure in an effective manner. the main aim budget
is to minimise cost and try to make surplus which is the common goals for each and every
business unit. This is one of the most appropriate tool which can help to control their
resources, reduces waste and increase profitability. These can be classified in to following
category in the social and health care:
Master budget: This is one of the aggregate budget of the cited business company which is
designed to provide complete picture of its financial health and its effectiveness. There are
various elements such as sales, operating expense, assets and income of the firm.
Operating budget: It is related with the operating activities of the health and social care
organization. It can help to develop the actual position which can involves sales, services,
labour cost, material cost like medicine and equipment’s.
2.4 Decisions about expenditure are made within a health or social care
The major aim for any business is to earn profit and attain good return for their investment. It
is the responsibility of the manager of cite business organization is to used various tools and
techniques so that they can attain their targets in an effective manner. these tools can be cost
benefit analyses, environmental analyses and other tools.
Cost benefit analyses: This is one of the most appropriate tool which is related with the
evaluate different cost and return in order to select a project. There are various factors in such
project such as rate of return, payback period etc (Remund, 2010). The main objectives of
such methods to analyses and estimate the potential risk before investing in the project in

social and health care. With the help of this method the manager of the cited business
organization is to make appropriate decision so that they can attain their long term goals and
objectives.
Task 3
3.1 Financial shortfalls can be managed
It is essential for a business organization is to make financial discipline within their business
and operations. If a company cannot use these resources in an effective manner it can leads to
increase financial shortfalls which is not good for their business. therefore, this is the
responsibility of manager in health and social care unit is to use various approaches so that
they can manage their capital in an appropriate manner. these tools can be:
Credit facility management: This is one of the most competitive task where the manager of
the company is to analyses various credit facilities such as loan, term loan, letter of credit,
bills etc.
The another way to managed such shortfalls they can evaluate all projects which are going to
take place or start in the near future (Swayne, Duncan, and Ginter, 2012). With the help of
profitability and risk analyses tools they can select the best project which can leads to
minimise financial risk in the near future.
3.2 The actions to be taken in the event of suspected fraud
Fraud management is one of the most critical and complex task which is too significant for
each and every business unit. For a company it is always fear to fraud by an individual within
the business. There are various approaches which can be used by the company so that they
can control and prevent such activities within the business organisation. This methods can be:
Internal Audit: This is one of the approach where a company can conduct audit within firm
for a period of time (Stevens, 2010). For internal audit they can also call various experts and
specialist who can detect such fraud in an effective manner.
3.3 The actions to be taken in the event of suspected fraud
Budget monitoring is one of the critical element of the budget control process. The main aim
of budget monitoring is to control estimated cost so that they can increase their profit and
revenue which is the common goal for each and every firm. They can analyses financial
statements and identify various issues and irregularities in these statements. With the help of
these statements they can check all inventories, stock of medicines and equipment’s. With the

help of budget monitoring tool they can control cost of social and health care and also
reducing waste. For this they can use waste management tool in an appropriate manner so
that they can increase their revenue and profits and implement all estimated cost.
TASK 4
4.1 Information required to make financial decisions.
Top management is mainly responsible for making financial decisions in an
organisation. Their are various data like required to make an effective decision like financial
statements, cash flow statements, inventory, budget etc. The most important thing that is to be
considered at the time of making this decision is goal of company (Altenburg and Pegels,
2012.). Optimum utilisation of available resources is core of every financial decision.
Information regarding long-investment and future growth is significant because they provide
direction to the whole organisation and decides their future.
4.2 Relationship between health and social care service delivered and cost and expenditure.
Every service has a cost and expenditure whether it is social service or any other. But
at time of providing social service safe environment is necessary because if it is not provided
than all the financial resources and other efforts will go in vain. Investing in equipment is
necessary with consistent supervision and monitoring of services. Development of staff and
their training plays an important role in in providing quality service but it will also cost some
money.
4.3 Financial considerations impact upon an individual using the health and social care
service .
All services are related to finance as non of them is free so an individual whose has
money will adopt quality service instead of any social service. Those with sound financial
situation will prefer quality instead of any other thing (Ahlstrom,Chen and Yeh, 2010).
Better service is provided by someone who provide training to staff and invest of their
development which can only be done by using financial resources.
4.4 Ways to improve the health and social care service through changes to financial systems
and processes.
A system should be developed to every class and community can afford these services
specially those who need these social services desperately. In this process they should focus
on providing service to more people and also invest money in improving the quality of
service. A system should be maintained so problems relating to social service can be solved
at the point of their generation. More focus should focus on optimum utilisation of available
resources so wastage of sources can be minimised.

CONCLUSION
From above report it can be concluded that health care and social care are integral part
of society. Finance resources are necessary to manage to them. It is an essential thing for
managing all the activities in a proper manner. For any operations finance is consider as the
life line for all the whole organisation. It is helpful in managing all the task in an appropriate
manner. If a management will lead to failed in do so then it affect a firm completely. In this
concern managers can utilise different number of techniques which are helpful in making and
increasing the chances of success more and more. For providing all the services it is
mandatory to them to arrange some funds and thus it leads to incur some number of cost and
expenditure.

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Online
Financial Management. 2016. [Online]. Available Through:
<https://www.nibusinessinfo.co.uk/financetips>. [Accesses On 4 May 2017].
Managing Financial Resources. 2016. [Online]. Available Through:
<https://www.nao.org.uk/report/managing-financial-resources-to-deliver-better-
public-services/>. [Accesses On 4 May 2017].