Case Study: Managing Financial Resources in Health and Social Care

This report provides a comprehensive analysis of managing financial resources in the health and social care sector, focusing on Care-south Group as a case study. It discusses costing principles, data utilization for resource management, regulatory requirements, and fraud prevention measures. The report also examines different control systems like budgetary and cost control, along with various income sources such as local authorities, private self-public care, government grants, and donations. Key factors influencing resource availability, including price and cost considerations, are also analyzed to provide a holistic view of financial management within the organization.

Managing Financial
Resources in Health and
Social Care

INTRODUCTION
For this company, there available several resources which are highly essential as they are
factors which can affect financial resources. These are highly crucial for the process of functions
and other operations. All the activities which are being conducted within the business are directly
or indirectly related to the financial services. All the departments who conducts their certain
functions needs to get connected with the financial department who can in turn provide platform
of success for those operations (Abdulkareem and Oyeniran, 2011). There are number of
activities which takes place within health and social care. Managing financial resources is all
about formulating regular records, balance sheet, P&L account and many others. In this report,
company chosen for this report is Care-south Group, which is a care home team and works in
association with Alzheimer’s Society upon projects like Dementia Friendly communities project.
Also, it organises several functions for the awareness of Dementia. In this report, there are
various factors which will be discussed in this report like principles of costing and business
control system along with the data which is being utilised for managing resources. Besides this,
several regulatory which is being needed for managing financial resources given in this report.
There are number of actions which needs to be analysed in order to suspect the fraud which has
been described in this kind of report.
TASK 1
1.1 Costing
Costing can be stated as a concept in which cost ascertaining is being done.
Determination of various goods and services is being conducted by this kind of cost. There are
various types of cost like semi costing, fixed cost, variable cost and many others. Below
described are the main costing principles utilised:
 Stake holders engagement: These type of people have the potential of affecting the entire
process of the business along with its decision making process. This in turn can directly
influence the strategies which are being applied within the decision.
 Materiality: This can be stated as one of the essential concept of the accounting which is
highly related to importance of transaction, balance and errors which can be determined
within financial statements.
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 Consistency: In this kind of principal, there are some of the consistent approaches which
are being needed within company for implementation. The main duty of costing
approach is trying to have the consistency which should be maintained within company.
 Data accuracy: Data accuracy is being checked which is being utilised within the
company (Altenburg and Pegels, 2012). Quality of the data is being checked by the
costing approach which is being utilised for various kind of purposes and other motives.
 Transparency: This kind of approach is transparent in nature and it is highly need to
make it appropriate auditable.
Importance of Costing:
Help is being provided by this kind of approach for managing this cost so that
expectation level can be met of the production and profits. Number of sectors are present in the
company which sub-divides the role of the company. There are various kind of functions and
responsibilities. There is the equal contribution within the success and growth of the company.
Cost centre mainly includes accounting, auditing or this can be inventory.
1.2 Information for financial resources
There is the data which is being needed by the Care-south Group which is being gathered
for the performance within past performance level, shortage and funds availability. Data that is
needed for the process of operations and functions so that management of cash flow can be done
in smooth and error free manner along with managing data which is related to working capital
and budgeting.
There are various factors of which company must comprehend about such as consumable
items, equipment, costs, source of income, modifications in policy, competition and legislation.
Data needed is highly related to the hardships of crisis within the cash flow. Various other data
which is being needed by Care-south Group are financial resources such as regaining of the cost,
cash flow forecasting model along with the bad debts and other inventory for they working
capital management and others areas. Data should be there regarding the fee structure and its
inflow from the customers (Broadbent and Cullen, 2012). There is the charity amount which is
being accepted from the respective Govt. of the country. There are various sources from which
the fund is being collected and is maintained for regulating the shortage of cash.
Therefore, this kind of data which is being needed by an organisation for managing the
financial resources appropriately.
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1.3 Regulatory Requirement
Financial needs of different nature require to look out by the company regarding health and
social care sector. Hence, this can give effective and better guidelines for initiating the
management in financial resources. Main purpose of the company is to develop the system of
effective risk management for the purpose of managing credit activities in proper and effective
manner. By help of this, there should be no financial shortfalls as this have very less impact on
the activities of operations. All the terms and conditions which are being followed by the various
financial advisory groups that been situated in UK.
Resources for company must be available in appropriate manner so that they can utilise
them in effective manner. This will in turn help them to provide support to their expenses and
appropriate process which should be taken for verification of the documents which in turn
reflects the income and expenditure of company. It is highly needed by the company to work in
deeply manner on the elements of budgeting and capital norms. Through this company can
control the financial resources by which key aim can be attained and that too in allocated period
of time.
It is highly essential by the company to understand all the legal needs which are
associated with the business so that resources can be utilised in better and effective manner. This
will allow company to manage their financial resources in proper manner (Caouette And et.al.,
2011). For this, there are number of legislation which are being formulated by the respective
Govt. of country for monitoring and taking care of the environment and adopt various kind of
practices which are mainly helpful for them in long running of country and its development.
Internal Audit which is being done by CQC in health and social care sector and that too
in appropriate manner. Priority of this is to examine all kind of resources which are being highly
utilised in proper manner or not. In addition, there are number of policies which are being
formulated by the company and this should be followed by all kind of staff members so that
growth and success can be attained in better and effective manner.
1.4 Different systems
It needs to be ensured by the company that all the resources need to be allocated in proper
and effective manner and should provide contribution in attaining aims and objectives of the
company. But this mainly requires high level of focus on programs and other responsibility
centre. Below described are the systems which are being highly utilised by the company:
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 Budgetary control system: Priorities needs to by the company and thus have to manage
all the funds as per the needs and demands. This provide assistance in serving the quality
services for all the clients and users of the company and management of cash flow can be
done in proper manner.
 Cost control system: Utilisation of new and advanced technological factors by which
minimisation of cost can be done for acquiring the benefits of proper services provided to
the patients.
 Financial control system: It is highly essential to determine the areas which are being
needed for certain amount of fund for the business. Financial control system is being
done by the auditing of the Chartered Accountants. This is highly useful in managing the
flow of income in proper and effective manner.
 Internal audit and control system
 Information technology control system
 Enterprise resources system
 Business importance control system
Keeping in mind the end goal to handle the money related assets within organization to
embrace FMS and monetary engagement framework. The monetary framework is having sure
devices by which assets can be successfully designated and adequately utilized. FMS help firm
to track all consumptions of firm which are brought about by big business (Coombs, 2014). In
this different spending lines are followed, for example, utilities, pay rates, materials and different
things. Spending lines should be opportune recorded. It isn't fundamental that all consumptions
are record by help of sources of info yet it is connected with the cost of administrations that been
given by firm.
TASK 2
2.1 Income Source
Revenue is being generated for the Care-south Group is the individuals like customers
and corporate entities. Care-south Group has been encountering various kind of factors because
of the results of funding like contribution of taxation, social insurance, Govt. loan and many
others. Charity is the major source of generating the revenue. Below described are the reason for
the income of Care-South Group:
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 Local authorities and care primary trust: Approx. 70% of revenue is attained through
primary trust and local authorities. In recent time, funding which is being obtained from
the resources is not sufficient for covering the cost of patients.
 Private self-public care: In this factor, these type of firms does not usually opt out for
NHS system. These kinds of people usually have large amount of wealth and they
mainly opt out for the NHS home care scheme. These types of people mainly contribute
around 30% of the income to Care-South Group.
 Government grants: These grants are being provided by the company for certain
objectives. For example: There is a situation of the company for relocating the business
schedule due to the shortage of care home for aged people. These funding are not
utilised on the regular purpose (Den Heijer, 2011). These type of funding can be
utilised for investing into certain geographical areas for certain installation of factories.
 Donation: This can be stated as another source of income for the Care-south Group.
They are the individuals which mainly provide funding without giving any kind of
conditions. For example: grants which are irregular source of income.
 National authority: Support is being provided by the Central Govt. of the country for
arraigning the funds for projects on health and social care. It is the main duty of the
national authority to take care of the people who are in need and other factors which are
being related with the respective country for allotting them certain amount along with
the services which are being needed for providing high quality services.
2.2 Factors influencing resources
Below described are elements that directly influence the availabilities of various
resources:
 Price: Care-south group do have many kinds of competitors within the market. About
6500 agencies are present within the marketplace who are majorly dealing within the
home care services. Local authorities of the country are becoming more conscious about
cost as the funding is being reduced bye the respective Govt. of country. Thus, resources
are being utilised by the local authorities in better and effective manner. Prices are not
being increased by the company but it has impacted on the resources for sure.
 Cost: Care-South has been trying to obtain the best outcomes from the employees. About
60% of the cost is being made up from the staff. It is highly essential for the employees
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who should be able to handle the patients in better and effective manner (What is the cost
principle?., 2017). This will in turn enhance the productivity along with ratio of handling
the patients by per employee. There are certain activities which are highly based on the
costing can provide assistance to Care-South Group which mainly incur high level of
cost. There will be more financial resources of the cost of company is lower in nature.
 Profitability: Capital and debt ratios can be uplifted if the company has been earning
good amount of profit and this will draw the attention of investors in certain business
process (Epstein and Buhovac, 2014). In 2016, surplus margin from the operations has
came down as compared to the other year which is 505% to 4.5%. Through this, company
is unable to declare dividend which leads to major impact over the resource availability.
 Brand: If the company has the great brand image as they have been conducting the
business process for a long time then they can make contracts with local authorities for
the funding of care homes and nursing. By this, brand attribute of the company has been
able to acquire more number of resources from the banks and various kind of suppliers.
2.3 Budget Expenditure
There are various kind of budgets which are already present. Master budget can be stated
as one of the most effective budget as it involves all sort of revenue and consider the cost for
next year. All the data is being present regarding the functional budgets like sales, material
budget, direct labour, etc. Below described are the types of budgets:
 Sales budget: Care-south Group has been focusing on the competitive market where there
are many health and care homes are present. Business process is being operated by the
company within the geographical area within UK along with the patients which needs to
be saved from the other local authorities. In this kind of scenario, patient needs to be
secured before the other budgets which are being prepared. Prices are determined for
boosting number of customers.
 Direct labour budget: This is considered when customers are to be served by the
employees directly. It is highly needed to attain the hourly and daily rates for the
profession like doctors, physicians, supervisors, attendants and others. After that,
evaluation needs to be done by the company regarding the time which is being taken for
giving treatment to the customers and patients. By this, budget can be prepared regarding
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the direct labour. The cost of the labour is highly variable for a company (Farmer and et.
al, 2012). This can be modified as per the total activities and volume.
 Material cost: In this kind of costing, focus is laid on material such as catering cost,
medicine cost, laundry and other related items.
 Overhead cost: These are the costs that been not attained directly along with the services.
These includes elements like cost security, salaries to the manager and administrations.
 Project management: This can be stated of budget in which all kind of cost which is being
related with the project of the health care. This can be stated as advisable for utilising all
the resources along with the finance in proper manner without wasting nay time.
2.4 Decision of Expenditure
Below described are the measures that aids in taking decision with regards to expenses:
 Profitability analysis: This kind of analysis will help out in company to decide whether
they should for the certain expenditure or not. If revenue which is being generated more
then the cost then it can be stated as worth to make the expense as this in turn will bring
out the values in the form of profits (Johnson, 2014).
 Net present value: This can be stated as another method tactic which is being utilised by
the company. Through this, identification can be done that in how many years return on
investment can be done which is being attained by the company. This kind of model is
highly utilised especially while putting large investment which needs to be done within
company. In such method, lumpsum investment are done in the initial year and inflow of
money initiates from later year. On the basis of time value of money, calculation are
done to attained the present value of investment done.
 Payback: it is highly essential to forecast regarding the future activities and other
happening. This same happens with the cash inflow and outflow. Assumptions needs to
be made by the company regarding the future and income from the projects (Koropp,
and et. al., 2014). Payback can be stated as methodology in which identification is being
done by the company regarding the years in which they will able to cover up the starting
expenses.
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TASK 3
3.1 Financial Shortfalls
Payment needs to be done by the company to their suppliers and the current liabilities
happening in the near future. As compared to the previous years, ratio of Care-south group is
decreasing and thus in such cases they are getting hard time to pay for their liabilities. For this, it
is required to enhance the skills along with the working capital and thus for this described
strategy are being adopted:
 Discount: This type of company has around £80 million worth of the debtors. Discounts
can be offered by the company up-to 3% to the pay dues in early period. By this,
company can get money in shorter time span. This can be utilised in short period of
time.
 Bank overdrafts: When the company is running short in terms of funds then this kind of
approach can be used from the bank and other financial institutes. It can be used This
method can be utilised at the time of distress. When the company is taking the overdraft,
they need to pay high level of interest to the bank (Lusardi and Mitchell, 2014).
 Debenture stock and loans: Capital is being raised by the company and that is done with
the help of issuing the debentures. These debentures can be issued even for a long
period of time.
3.2 Suspect fraud
When there is any kind of fraud which is being suspected, in order to deal with this
response team is being made who tackle the matter. There are various kind of team who are
being majorly involved for suspecting the fraud like accountant, operations manager, senior
person of the human resource manager and investor for examining the frauds.
There are certain documents and evidence which are being needed by the person who is
responsible for examining the fraud. Along with this, personal details of the person who has
committed crime should also be submitted. Effective monitoring is being done by the company
regarding the fraud presentation control continuously and thus they mainly follow the data and
unusual relationship among the employees and numbers.
It is highly essential by the team to look after the legal provision of the law of
employment so that person can be suspended after the investigation by the team who is
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suspecting the fraud. In this company has to determine whether they can recover the staff
members (McKinney, 2015). After the staff member is being terminated and thus this give
various kind of reason to lawyer why termination is happening for the worker.
In order to prevent the happening up of fraud in future, company needs to submit the
fraud details for auditing committee. Alert is being given to this committee regarding the fraud
but along with that thy also take few more steps for securing these kind of situations.
3.3 Budget monitoring
Care-South is regulating the budget in regular period of time. Through this, it becomes
easy to determine the results for the expenditures and sales. Comparison should be done with the
standard ones of so that actual outcomes can be obtained. Determination can be done from the
deviation which needs to be studied and thus all the problems needs to be solved. After this,
report is being prepared by the financial department which is highly related to the budget which
needs to be mentioned along with the cause of deviations. As per meeting, it should be held
between the members.
Budget needs to be discussed within meeting and thus modifications needs to be done as
per the demands of the existing environmental changes. New budget is being formulated after the
conduction of deep research (Petty and et. al., 2015). It should be realistic, motivational.
According top the new budget, control should be done by scrutiny and regular comparison.
TASK 4
4.1 Information required
It is highly essential to collect the data by which they can take decisions for various
scenarios. This mainly involves below described issues:
 Origin of income.
 Cost and expenditure, Pricing , purchasing.
 Which offering system can be utilized by workers to offer items and administrations
 The reasonable framework should be picked
 What firm need to deliver and what sort of administrations firm need to give
 In what amount items ought to be deliver
 Which area need to choose
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 Take choice with respect to utilizing new or old methodologies (Swanson, Territo and
Taylor, 2016).
4.2 Analysing Relationship
This kind of amount which is generally paid by the customers in order to get the services
and that too at economical cost which mainly happens in the operations for earning the revenues.
There is high impact on the quality of the services which is being delivered to the clients. This
can be stated as the limit of delivering the services along with goods in order to have desired
results.
There are much more of the factors which mainly contribute within the quality of
services. Execution of the factors needs to be done for the money. Scare resources along with
cost and expenditure exists as method by which managing money can be come easier and thus
high quality products should be delivered (Purce, 2014).
Determination needs to be done by the national health performance committee regarding
the nine areas who states ways through which quality can be maintained. Those are proper,
effective, efficient, safe, responsive, capable, sustainable, continuous and accessible.
It is highly essential for the Care-south group for adopting the better pricing policies for
the company by which they can minimise the expenditure and cost. As they want to give the
quality services, it is highly essential to take care of them so that health care can be improved.
4.3 Financial considerations
Number of ways are present which financial consideration has the impact on users.
Below described are the factors:
Training needs to be provided for the staff for expending the money. Delivery given to end users
are being affected by the training. Better and effective training makes employees give high level
of performance along with high quality services and goods. If training is not effective, then vice
versa happens. Next consideration is on appropriate recruitment and selection. Good candidates
will be selected if there is strict process of recruitment (Smith, 2014).
Quality of service: If the amount available to the company is not enough, then they wont be able
to give the best outputs for transferring the quality. Hence, Care-South group has to regulate
proper amount of fund by which quality services will be provided.
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