Analyzing Financial Resources in CareSouth Group: 2013-2014 Report

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MANAGING FINANCIAL RESOURCES IN HEALTH
AND SOCIAL CARE
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
Task 2...............................................................................................................................................7
Task 3.............................................................................................................................................10
Task 4.............................................................................................................................................14
Conclusion.....................................................................................................................................17
Reference List................................................................................................................................18
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Introduction
The efficiency of care home organisations is maintained through the appropriate management of
internal operations and budget planning. The management of resources within a health and social
care (H&SC) organisation is primary for the performance of the company in the competitive
market scenario.
The following study is focussed on the CareSouth Group that was established in 1991. The
organisation provides home care and residential facilities to the services users in South England.
The organisation functions as a non-profit care provider in the H&SC sector of England and is
authorised by the NHS to provide residential care to senile and dementia patients (Care South,
2019).
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Task 1
1.1 Explain the principles of costing and business control systems that may be adopted in
CareSouth Group care home
H&SC organisation that provides services to the population of England has to manage their
internal funds and financial activities in an effective manner that would promote the success of
the organisation in providing quality services to the consumers. CareSouth Group (CSG) care
home needs to maintain accurate records of the financial information within the operative
functions within the organisation through the utilisation of basic software that analyses and
monitors the expenditure of an organisation (Mason et al., 2015). Implementation of such
software within the operations of the company would ensure the cost control and cost centre
allows the CSG care home to perform better cost-benefit analysis.
Management of operational costs, income, profit and budget within the CSG care home would
allow the organisation to maintain their competitive tendering within the H&SC market segment
of the UK. Appropriate and efficient budget planning allows the company to perform better
forecasting regarding the availability of funds and financial resources that are outsourced from
external stakeholders (Ginter et al., 2018). Considering the organisation’s position within the
NHS as an efficient care-provider for dementia and aged patients, the application of effective
financial planning provides the organisation with effective costing systems. It is mandatory for
H&SC businesses such as CSG care home to apply efficient business control system in their
operations to facilitate their profitability and brand image as a non-profit H&SC organisation.
1.2 Identify the information needed to manage financial resource for CareSouth Group
care home in 2013/14 financial ending
The need for procuring necessary information in managing the financial aspect of a business
organisation is identified through the factors that help the management to generate efficient
budgets for the operation of the organisation. CSG care home needs to acquire accurate data
regarding the expenditure allocated for business costs. These attributes include staffs,
equipments, consumable items and other repair works or establishment of new institutions,
which are categorised as extension of buildings (Curtis and Burns, 2015). This information will
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allow CSG care home management to allocate financial resources for the successful operation of
the institution in the H&SC market segment.
Information regarding the administration of the care home allows the management to develop a
detailed idea about the distribution of expenditure and business costing that was acquired by the
CSG care home to function efficiently in the organisational background. As a non-profit
organisation, it is necessary for the company to keep track of the expenditure in the business
scenario. Managing information regarding the income streams of the organisation allows the
body to develop an effective notion of the purchasing abilities the company pertains in their
operations. It is obligatory for the organisation to pay heed to the policy changes within the
H&SC sector of the UK to develop better accountabilities among their stakeholders and fulfil
the audit requirements, as it would enhance the brand image of the organisation.
1.3 Explain the regulatory requirements need to be satisfied while managing financial
resources in CareSouth Group care home
The management of CSG care home needs to develop their managerial operations in accordance
to the regulatory framework that ensures the success of the organisation in providing better
facilities to the consumers in the H&SC sphere of the country. The CSG care home management
needs to develop their functional operations in accordance to the tenets of legislations and codes
of practice that exist in the H&SC sector for care homes and care providers. The employees
within the company have to perform their job roles in accordance with the “codes of practice” so
that the consumers receive quality services from the organisation.
The management has to adhere to the terms generated by the audit team in order to receive
financial aid from the external stakeholders and the benefactors. Proper allocation of funds and
policies regarding the providence of services need to be followed strictly in order to achieve
success in the operational sector of H&SC in the UK market segment (Charlesworth and
Johnson, 2018). The efficiency of the organisational operations is enhanced through the increase
in accountability in their operations. It is essential for the H&SC organisation to manage the
financial resources for improving the quality of services as well as developing appropriate brand
image in the market segment.
1.4 Evaluate the systems for managing financial resources in CareSouth Group care home
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Financial resources within the H&SC organisations are managed through various procedures.
These strategies enable the institutions to provide proper services to the consumers. These
systems of financial management encourage the employees of CSG care home to gain relevant
knowledge regarding the allocation of funds and distribution of expenditure in various
departments within the organisational framework (Nelson and Staggers, 2016). The advantages
of determining the various sources of income allows the management to develop knowledge
regarding the possible ways of earning larger amounts of funds that would help them to enhance
their operations. A major disadvantage that CSG care home management experiences in
identification of the income sources is that the non-profit organisation’s sources of income are
primarily from government or private fundraisers. It is necessary for the management of CSG
care home to develop an accurate idea regarding the administration of budget within the
departments of the institution (Humphries, 2015). This is beneficial for the management in
recognising activities that requires increased expenditure. By aligning their business operations
in accordance to the audit requirements, the organisation would gain the opportunity to develop
better financial planning.
The management of CSG care home is able to enhance their operations regarding the dementia
and senior patient care through development of appropriate accountabilities and cost centres
ensure the organisation is able to distribute their available funds in various activities within the
organisation and generate better results in managing their financial resources efficiently. These
systems ensure the operations within the care home possess necessary financial resources to
indulge in quality service providing activities.
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Task 2
2.1 Discuss the diverse sources of income available to CareSouth Group care home in the
financial year in 2013/14
Non-profit organisation operating in the H&SC sector of the country performs their business
operations in the market sector through the providence of care facilities to the consumers. CSG
care home gathers their funds and financial resources from various entities that encourage in the
development of services within the company. The organisation has a diverse source of income
through the availability of donations made by the NHS and private individuals and companies.
Public organisations such as NHS provides majority of the fund for the fulfilment of domiciliary
care services that remained the same in the FY 2013/14 as against FY 2012/13 (Care-
south.co.uk, 2019).
Additionally, voluntary sources include the Alzheimer’s society, which provides funding to
CareSouth Group. A national source such as the King’s Fund is also involved in offering funds
to CareSouth Group. In case of financial crisis, the charity makes essential contribution in
building the care home and delivering services for users (Humphries et al., 2016).
2.2 Analyse the factors that may influence the availability of financial resources in
CareSouth Group care home
In CareSouth Group, numerous factors might affect the accessibility of monetary resources and it
might include the objectives of the agency, partnership between agencies, funding priorities,
service type and private finance. For instance, the objectives of the given care home has been set
to make improvements in the lives of dementia patients and after considering the objectives,
national body such as the NHS can consider providing funding. Funding priorities of large non-
profit bodies depends upon the service delivery of care homes and it based on service quality,
NHS will prioritise the care homes (Goodman et al., 2016). In case, if the CareSouth Group
works in partnership with other agencies then by forming an inter-agency collaboration, it can
avail financial resources. In England, according to 2010-2015 government policy, it is the
obligation of the government to provide integrated care services by arranging funds for the care
settings. Moreover, based on service type, the resource availability varies because government
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tend to prioritise certain services. In CareSouth Group, services are designed mainly for the older
people and the government is focussed upon improving the lives of older population. Therefore,
service is a major factor influencing funding.
2.3 Review different types of budget expenditure in CareSouth Group care home.
In order to run an organisation, it is vital to understand the ways expenditure occurs. Budget
expenditures include cost centre, outsourcing contract and project management. The cost centre
plays an important role in tracking expenses within the organisation (Cannavacciuolo et al.,
2015). In CareSouth Group, the accounting department is an example of cost centre. The
department is responsible for managing budgets in smarter ways. In this manner, it also
contributes to the profits of the organisation. In case of project management, it is necessary to
develop a budget and it mainly incorporates the WBS along with the tasks. Budget expenditure
depends upon the consensus of the team members and the overall budget might increase based
on the elaboration of WBS tasks.
Outsourcing contracts within CareSouth Group can help in cutting down costs. Jobs such as
customer support services or preparation of annual reports can be outsourced in order to manage
budgets (Beaulieu et al., 2018). However, outsourcing can be disadvantageous as it leads to loss
of domestic jobs. However, it is done mainly because labour is available at a lower cost in case
of outsourcing. Nevertheless, overhead expenses involving technology and equipments can be
avoided. The leaders of CareSouth Group can further focus upon the core elements of the
organisation by managing expenditures.
2.4 Evaluate how decisions about expenditure could be made in CareSouth Group care
home. (You also need to do also comparison with respect to financial year 2012/13)
The organisation can focus upon analysing the environment before making major expenditure
related decisions. After analysing the 2012/2013 report, it has been observed that based on the
priorities of the organisation, decisions has been made. For instance, the care home provides
residential care to older people and therefore, the organisation should allocate more budgets for
the improvement of the residential homes. Domiciliary care is also provided by the organisation
and therefore, it has to bear additional costs to provide personal care services for the older people
who prefer to live independently.
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Financial risk is another deciding factor about expenditure. For example, the care home borrows
loans from the banks and at the end of the tenure; it is liable to repay the amount with interest
(Kelley et al., 2015). In case, it fails to do so, then it has to face credit risk. The managers within
the organisation should also make a cost-benefit analysis. In case, expenditure rates rise while
arranging care services in residential or domiciliary care, the company should focus upon cutting
down additional costs (Boardman et al., 2017). The organisation provides care services to
dementia patients and it can be a profitable venture because the vulnerable individuals require
support services and prefer to live independent lives and are willing to spend money for
receiving residential care.
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Task 3
3.1 Assuming there was financial shortfall in CareSouth Group care home; explain how
this situation could be managed?
In CareSouth Group, in case of any financial shortage, it can be recommended that the
organisation handle the situation by prioritising their objectives. Failure to repay the debt can
result into financial shortfall. Hence, it is also necessary to cut down the budget. Spending should
be done only upon meeting the immediate needs of the older people. The organisation can take
help from the reserve fund. It is a type of savings account that can be set aside by the
organisation in order to handle future financial crisis (Polak and Boughton, 2016). Naturally,
reserve funds can be regarded as a fall back option. Financial crisis usually appears in an
unexpected manner and here, reserve funds can be utilised by the organisation. Additionally, the
organisation should also have alternative means of income. For instance, the organisation can
take financial help from the Alzheimer’s society or any other care organisation after appealing
for help. It can act as a saviour. The urgent or medical needs of the residents can be met after
receiving support from these alternative sources (Bauld et al., 2018). The senior managers should
focus upon hiring only skilled and capable employees so that they can reduce the costs of
retaining incapable staffs.
3.2 Explain what action you would take if you suspect occurrence of financial fraud in your
organisation
In the care home, diverse types of financial frauds might occur due to cash flow shortages and
debts. In case of any suspected frauds, the situation can be tackled by carrying out weekly
assessments. It is the responsibility of the manager to implement revised control and prevent the
occurrences of financial frauds in the future (Brooks et al., 2017). The staffs must be trained so
that they will report immediately whenever they suspect it. Checking upon financial information
to test its reliability and validity should be one of the priorities of the managers. Further, budget
should be monitored strictly by understanding the cash flow statements outlined in the
spreadsheet. A network management system such as the NMS can be utilised to supervise
smaller components of a large network system.
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In case staffs of CareSouth Group are involved in creating financial crisis, then it should be the
manager’s duty to approach the identified individual directly. However, the manager should be
careful before accusing anyone based upon mere suspicion. The audit team should be involved
so that they can advice the manager after making thorough investigations. After arranging a team
meeting, it would be easier for the manager to identify and tackle issues related to possible
frauds.
3.3 Prepare a cash budget from the given data and explain how budget is monitored in
CareSouth Group care home?
(1) Prepare a schedule of expected cash collections for September
Particulars July (£) August (£)
September
(£)
Actual Sales for the organisation:
Cash Sales
£
6,500.00
£
5,250.00
£
7,400.00
Sales on Account
£
20,000.00
£
30,000.00
£
40,000.00
Amount of credit received for the month of July
£
4,000.00
Amount of credit received for the month of August
£
22,000.00
Amount of credit received for the month of
September
£
32,000.00
The expected cash collection for the month of
September
£
4,000.00
£
22,000.00
£
32,000.00
Table 1: Tabular representation of the collection of cash for the month of UK
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(Source: Created by the Learner)
Table 1, provides a detailed picture of the cash that will be collected from the market. It has been
observed that the total amount of money that will be collected is £ 32,000. In this part there is a
rule that needs to be considered is that 20% of the sales will be received in the same month and
the rest 80% will be received on the following month.
(2) Prepare a schedule of expected cash disbursements for merchandise inventory
purchases in September.
Particulars July (£) August (£) September (£)
Actual Sales for the organisation:
Cash Sales
£
6,500.00
£
5,250.00
£
7,400.00
Sales on Account
£
20,000.00
£
30,000.00
£
40,000.00
Credit Purchases done regarding inventories
£
16,000.00
£
25,000.00
Amount to be paid on the month of
September
£
3,200.00
£
21,000.00
Selling and administrative expenses
£
9,000.00
Cost of equipments
£
18,000.00
Cost of Utility
£
3,000.00
Total amount of disbursement £
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