Care Tech Plc: Report on Managing Financial Resources (2024)

This report delves into the intricacies of financial resource management within Care Tech Plc, a provider of social care services. It begins by outlining the principles of costing and business control systems, emphasizing the importance of software, cost control, forecasting, and variance analysis. The report identifies crucial information needed for financial management, including income streams, administrative data, legal requirements, and competitive factors, while also highlighting the importance of non-monetary information. Regulatory requirements, such as accountability, codes of practice, and audits, are discussed, along with the roles of financial regulators like HMRC and Companies House. The report evaluates various systems for managing financial resources, including budgeting, auditing, accountabilities, and cost centers. It then explores diversified income sources available to Care Tech Plc and factors affecting financial resource availability, followed by an analysis of budget expenditures and potential financial shortfalls. The report also addresses actions to take when financial fraud is suspected and evaluates budget monitoring arrangements. Finally, it identifies information needed for financial decisions, analyzes the relationship between care services and costs, and suggests ways to improve services based on financial considerations. The report concludes by summarizing key findings and recommendations for effective financial management within Care Tech Plc.

MANAGING FINANCIAL
RESOURCES IN HEALTH
AND SOCIAL CARE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Principles of costing and business control systems adopted in Care Tech Plc................1
1.2 Identification of information that are needed to manage financial resources for Care Tech
Plc...........................................................................................................................................2
1.3 Regulatory Requirements that are needed to be satisfied while managing financial
resources.................................................................................................................................3
1.4 Evaluation of the systems for managing financial resources in Care Tech Holdings Plc 3
TASK 2............................................................................................................................................4
2.1 Discussion of the diversified sources of income available to Care Tech PLC.................4
2.2 Analysing factors that may influence the availability of financial resources in Care Tech
Plc .........................................................................................................................................5
2.3 Reviewing different types of budget expenditure in Care Tech Plc.................................6
2.4 Evaluation of decisions that could be made in Care Tech PLC about expenditure.........7
3.1 Managing financial short fall in Care Tech PLC..............................................................8
3.2 Actions after suspecting occurrence of financial fraud in organization...........................9
3.3 Evaluation of budget monitoring arrangements in Care Tech PLC...............................10
TASK 4..........................................................................................................................................11
4.1 Identification of information that is required to make financial decisions in Care Tech Plc
..............................................................................................................................................11
4.2 Analysing relationship between care services delivered and `costs and expenditure`...12
4.3 Evaluation of impacts of financial considerations upon a service user..........................12
4.4 Suggesting ways of improving the care services............................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Management of Finances have become challenge for the day. Each and every field
irrespective of its business model hires skilled experts and professionals for this task. Private as
well as Public Sector all has been quite strict in the efficient management of Finances. This
project report is prepared on the basis of Care Tech Plc. homes which deals in providing quality
social care services. This report will create understanding and will discuss various principles of
costing and business control systems with information which is required to manage financial
resources accompanied by regulatory requirements. Further, diverse income sources that are
available to Care Tech Plc. and factors that may influence the availability of financial resources
are stated briefly.
This project also puts light on financial short falls by taking its assumptions which is
accompanied by steps after suspecting financial fraudulent and evaluation has been done for
budget monitoring arrangements. In addition, emphasis is also given on identification of
information that is required to make financial decisions. Research will also be conducted to
analyse relationship between care service delivered and costs & expenditure accompanied by
financial considerations of Care Tech Plc.
TASK 1
1.1 Principles of costing and business control systems adopted in Care Tech Plc
Maintaining costing and business control systems is regarded as an internal part of the
entire process which is carried out by an organization. Incurred cost by an organization has its
direct impact upon output and earning of a business (Chen and et.al., 2017). Following are the
principles of cost and business control systems that are required to be implement by Care Tech
Plc.:
 Basic Software: As many organizations are undergoing certain changes in their
infrastructure and are taking their actions electronically. Hence, it would be
advantageous for an organization to take control over those actions and find any
errors that are happening.
 Cost Control: External and Internal process of auditing will assist a firm to
understand the foremost policies and to enable to take control over both the internal
and financial system and working of Care Tech Plc.
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 Forecasting: This technique is regarded as the most important for an organization as
it enables and assists firm in predicting any future contingencies. This information of
future performance, financial aspects and cost profits would be highly beneficial for
Care Tech Plc. to plan its future strategies and policies. Further, it will help in
forming better defence system.
 Variance and cost benefit analysis: This type of information assists in evaluation of
the performance of different characteristic of Care Tech Plc. By comparing pre-set
targets it also determines performance of project (Business Control Systems, 2018).
Cost benefit analysis assists in taking primary decisions which are related to the
management of financial resources of an organization, as it aims at analysing the
received benefits over cost incurred by Care Tech Plc.
Costing method used in Health and social care organizations:
In health and social care sector, costing is done by accumulating fixed cost and variable
cost together and by dividing it with number of patients. For example:
Fixed cost: 5000
Variable cost: 6000
No. of patients: 100
Cost= (Fixed+variable)/no. of patients
= 11000/100
= 110
Costing principles of the NHS:
 Data Accuracy: Increase in the accuracy of data improves confidence in the costs of
resulting patient level. As, data is generally organised into functional units so it is easy to
record data in accurate and timely manner.
 Stakeholders engagement: It is one of the most critical principle for productive use of
costing information. It can help in understanding the audience for costing data, to ensure
costing is more accurate, improves intelligence of business.
Business control systems:
 Budgetary control system: It is system of controlling costs which generally consists of
preparation of budgets, coordinating the departments and comparing actual performance
with the budgeted for future period.
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 Cost control system: It is a system of identifying and reducing expenses of business in
order to increase profits, and it starts with the budgeting process. It is an important factor
for maintaining and growing profitability. It also provides information for planning and
for determining the efficiency of activities after they are performed.
1.2 Identification of information that are needed to manage financial resources for Care Tech Plc
It is noticeable that health sector has undergone incredible developments in this industry
and projected a steady growth as well (Fortier and et.al., 2017). Following information’s are
needed by Care Tech Plc. for managing financial resources:
 Income Streams: This statement should be prepared by Care Tech Plc, in order to
assess financial performance during a particular time period. This statement also
provides decision makers with information related to profit and losses of the
organizations.
 Administration: This will help in determining its profitability as well as it will help
in tracking and managing its expenses properly. This type of information could easily
be generated by its various system including the costing system and financial
management system.
 Legal Requirements: These legal requirements are needed to be fulfilled in order to
manage financial resources. Company should move forward towards arrangements
for financial resources according the legal obligations which are imposed by
government.
 Competitive Factors: These factors are needed to be measured while managing
financial resources. Company should analyse these factors in order to determine
future need of such resources, so that financial resources could be managed
effectively and efficiently.
Information related to business environment and external influences are also required in
order to enable proper management of the financial resources, such as:
1. Trend Analysis.
2. Change of policies.
Hence, referring the above aspects it can be presented that along with the financial factors
there are some non-monetary information needed by Care Tech Plc for managing financial
resources. Thus, in the context of financial resource management, manager of Care Tech Plc
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needs to lay focus on evaluating trends, competitor’s policies as well as laws and legislation.
By taking into account all such factors concerned authority would become able to take
appropriate decisions.
Health and social care sector organizations needs information related to business
expenses which includes cost of sales, grocery, wages, bills, overtime, tax, interest on
loans/overdraft. On the other side information related to income is also required to know;
revenue, interest earned from investments, grants, funds, donations. This information is
required by health and social care organizations to prevent financial crisis and conduct free
cash flow to facilitate patients efficiently and effectively.
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Illustration 1: Financial figures of Care Tech Holdings Plc.

1.3 Regulatory Requirements that are needed to be satisfied while managing financial resources
This requirement of regulatory is regarded as one of the most important factors that help
business in growth and function in a hassle freeway. It has become mandatory for all managers
of Care Tech Plc. to follow all the provisions that are presented in Health Care Act 2012. Care
Tech is required to match to the following regulative requirements:
11 Accountability: It means a situation in which an individual or department is responsible
for the performance of a specific function.11 Code of practice: In this guidance is provided relating to Northern Ireland Legislation
which is likely to have an important effect on businesses of health care and social
economy sector.11 Audit: It could be defined as an official examination of a company's accounts, typically
through an independent body.11 Policies: It is a course or a rule of action which is implemented or proposed by an
organization or individual.
Financial Regulators in Care Tech:
 HMRC: It stands for "Her Majesty's Revenue and Customs" which is a non-ministerial
department of the UK government responsible for the collection taxes. In Care tech tax is
paid in the form of tariff, VAT and duties, inter state and intellectual property.
 Companies House: It is the UK's registrar of companies and is an executive agency and
trading fund of Her Majesty's Government. Care Tech is also registered under it in order
to file annual financial statements.
 IFRS: It is type of universal business language which is followed by the companies while
reporting financial statements. Care Tech make use of these accounting standards to
prepare and present financial statement i.e. income statement, balance sheet, cash flow
statement, etc.
 GAAP: These are a set of accounting guidelines and procedures which are to be followed
by companies while preparing their financial statements. These guides Care Tech for
recording and reporting financial data with the help of standard ways and rules.
1.4 Evaluation of the systems for managing financial resources in Care Tech Holdings Plc
It is important for Care Tech Plc. to manage its financial resources. Following are some
systems which are stated as helpful in management of the financial resources:
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 Budgeting: This practice of budgeting helps firm in setting financial targets. Budgets
helps in forecasting future financial performance of Care Tech Plc. As it sets the
future targets and helps in managing financial resources of the organization, also aids
in optimum utilisation of financial resources (Hansson, Höög and Nyström, 2016). If
budgeting is done wrong, then the whole production process and planning can go
wrong and could result in failure.
 Audit Requirements: Auditing assists organization with a check related to the
financial resource's management. To present proper internal and external auditing
system it is essentially required within the organization of Care Tech Plc. If any
company fails to do the same, then it becomes harder to manage financial resources.
 Accountabilities: This system is a type of beneficial system which assists an
organization in the proper management of the fiscal resources of Care Tech Plc. It
also helps in collection and recording of financial information of the organization
which is in turn used to prepare financial statements (Managing Financial Resources
in Health and Social Care, 2018). It is important to implement this system because
without it company won't be able to know financial position of their organization.
 Cost Centres: This system is helpful in controlling cost and manage financial
resources present within organization as it assists in keeping record of the company.
If there happens some mistake in recording financial transactions or costs, company
can suffer great losses and can lead to mismanagement of financial resources.
It is also suggested to Care Tech to avail utilisation of IT infrastructure in order to
manage its financial resources.
TASK 2
2.1 Discussion of the diversified sources of income available to Care Tech PLC.
Income is termed as an internal inbuilt part of every business which is been set up as a
profit making entity. In simple words, it is defined as the revenue earned by an organization
during a specific time period. There are of various kinds through which income is generated for
an organization. Income helps an organization to grow, so it should be taken care off.
Public
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 Government grants: Government takes many initiatives to assist health and social care
sector in earning. It can provide Care Tech Plc. with extra amount of subsidies in taxes
and help organization in maintaining income.
 Health Campaign: Health campaign are organised by government in order to help needy
and poor people by assisting them with medical ailments which in turn results in good
source of income for businesses in health and social care like Care Tech Plc.
 External sources: These sources could be classified further into two categories like; long
term and short term (Hoque, 2017). Some long term sources are; Mortgage, venture
capital, retained earnings, debentures, ordinary shares, investments from third party, etc.
On the other hand, some short term sources are overdraft loans, hire purchase, debt
factoring, stock control, etc.
 Voluntary: These are special types of sources of income which includes charity,
donations, etc. Many people donate high amount of money for wellness of people in
health and social care institutes or businesses which helps firm in maintaining income
generation. In this there are two types; local and national.
1. Local are those sources from which income is generated from local people and people
from that locality.
2. National includes donations and charity amount from people of different locality and
areas.
Private
 Sponsorship: These type of income sources is generally found in big companies and
businesses from where sponsors can get benefit out of their investments. Many big
companies and people sponsor health and social care in order to improve their brand
image with such institution which is working for people. As Care Tech Plc. itself is a
big company or business in this sector of health and social care, many diversified and
well established businesses would like to help them in their business operations in
turn generating income for company.
 Other Sources: These are those type of sources which are generally not considered
as the main source of generating income for the organization. Such as income from
renting, revaluation of assets, interest received from deposits, etc.
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2.2 Analysing factors that may influence the availability of financial resources in Care Tech Plc
Availability of financial resources completely depends upon certain factors and it
is very much helpful in making an organization function properly. There are several factors
which in turn influences the aspects of resource availability within Care Tech Plc such as:
 Government policies: Government is the regulative body of any nation and its main aim
is to frame modifications and changes in the policies framed by it. Change in governance
regulatory policies may be a reason for modification in availableness of financial
resources.
 Policies of the organization: Different policies are framed by organization according to
the needs to follow them. Income of an organization completely depends upon the
policies framed by it.
 Geographical location: Geographical locations plays a vital role in determining
availability of financial resources as diverse locations have different features. The users
of such services like; funding opportunities, nature of service provided, etc. are set by
nature.
 Legal form: Entity form will decide what all financial resources would be received by
entity (Martin, 2016). Legal documentary formalities also affect financial availability of
resources. For ex., in a case company form of organization can raise huge funds through
the issue of shares but a proprietorship undertaking business cannot do so.
 Private Finance: Credit risk of the company endangers the equivalents cash of the
company in order to make it possible for a company to root funds from financial
institutions. There are chances of reducing prospective customer from getting credit if
credit risk is unmonitored. Due to fear of unclear recovery procedures credit risk will
impose endorsement on investors and capitalist to recover their capital back.
2.3 Reviewing different types of budget expenditure in Care Tech Plc
Budgets are the provinces that assist an organization in forecasting future performance of
a business relating to expenditure and revenue. There are some budgeted expenses also like
ambulance, salaries of personnel, rent material, etc. It would help Care Tech Plc. to pre-set its
fiscal targets to expenditure and income for a particular time period. Following are different
types of budgets:
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 Sales Budget: This type of budget helps in pre-setting its sales execution. For a
particular period, marked up sales of a company are set and are compared with the
actual sales made by the organization after that time period thereby helping the Care
Tech Plc. to take initiatives in order to increase its sales.
 Capital budgets: These budgets assists in taking essential decisions in making
investments in primary projects. To evaluate the investments made by a company
towards primary assets it helps organization in projecting the financial property of
different proposals.
 Master Budget: It includes number of budgets which are formed in a business such
as sales budget, cash flow, capital budgets, etc. Business performance is projected as
a whole.
 Cash Flow Budget: Cash flow is increased due to cash flow budget and controls the
cash flow of a business. It helps in forecasting future cash outflows and inflows.
 Comprehensive budgeting: It is utilised when there is elimination on spending.
Income proceeds of Care Tech Plc. has been reduced because of acquisition, thus this
form of budgeting is used to reduce unnecessary spending.
 Problem solving budgeting: This type of budgeting is more elaborated than
comprehensive budgeting which has a more generic view (Agarwal and Randhawa,
2015). Utilization of this budgeting is done when an organization has faced some
difficulties in controlling their capital in some sections of the company.
 Cost Centre: It is termed as a process of forcing a cost centre manager to consider
financial effect of a particular type of operational objectives. This type of budgets are
estimation of cost centre's cash receipts and expenses for a budget period. Each
company is unique in terms of its financial and operational goals and its cost centre
budgets.
 Project Management: Managers are facing large numbers of problems in projects
that could be traced directly to the use of inadequate budgeting and administration
techniques. Budgeting is the key to effective project management. It can also be said
that, this is a method to manage improvement projects for international humanitarian
assistance and relief organizations like Care Tech Plc. By implementing this type of
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budgets project costs could be controlled within the authorised budget and deliver the
anticipated project goals.
2.4 Evaluation of decisions that could be made in Care Tech PLC about expenditure
 Maximising Value: In this concept every individual or organization desires to
maximise the profits and minimize the costs and is the most basic concept of decision
making as well. The cost could only be minimised by the process of choosing the best
brand of the product, or finding the lowest cost suppliers that meet the company's
quality standards. If this is not implemented properly, company might be facing some
difficulties in earning huge profits.
 Rational Thinking: In this concept focus is given on the decision maker in an
organization, the one who takes decisions by using emotions and experiences. Such
decisions may help in avoiding uncertainties. Ignoring this concept may result in
uncertainties for which company is not ready.
 Cost benefit analysis: This concept takes assumption that every decision taken by
any individual or the organisation involves some gain and loss. So the main aim of
this concept is to make expenses which in turn gives huge benefits.
 Environmental Analysis: BY conducting environmental analysis company can make
use of the best available science and other relevant information in making decision.
Company can make decisions to increase the diversity, resilience, health and
productivity of company. The main aim of environmental analysis and decision
making is to reduce time and cost of project analysis.
 Accountabilities: Accountability within decision making means ensuring that all
those who contributed to the decision and all those who are affected by it understand
what decision was made as well as how it was made.
 Priorities: This concept of decision making could be explained form below
illustrated decision making priority matrix.
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