Report: Managing Financial Resources at Silloth Nursing and Care Home

This report provides a comprehensive analysis of managing financial resources within the context of health and social care, specifically focusing on Silloth Nursing and Residential Care Home. It delves into the principles of costing and business control systems, emphasizing the importance of data accuracy, transparency, and stakeholder engagement. The report explores various sources of income, factors influencing financial resource availability, and different types of budget expenditures, including a sample budget. It further examines decision-making processes related to expenditure, management of financial shortfalls, and actions to be taken in cases of suspected fraud. The evaluation of budget monitoring arrangements is also covered. The report concludes with a discussion on essential information for financial decision-making, the relationship between healthcare service costs and expenditure, the impact of financial considerations on individuals using care services, and suggestions for improving health and social care services through changes to financial systems and processes. The report highlights the significance of regulatory compliance, systematic financial management, and proactive measures to ensure the effective and efficient utilization of financial resources within the healthcare setting.

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...............................................................1
1.2 Information required to manage financial resources.............................................................1
1.3 Regulatory needs to manage financial resources..................................................................2
1.4 Systems to manage financial resources.................................................................................2
TASK 2 ...........................................................................................................................................3
2.1 Different sources of income..................................................................................................3
2.2 Factors influencing availability of financial resources.........................................................3
2.3 Different kinds of budget expenditures.................................................................................4
2.4 Decision making for expenditure..........................................................................................4
TASK 3 ...........................................................................................................................................5
3.1 Management of financial shortfalls.......................................................................................5
3.2 Action taking in the event of suspected fraud.......................................................................5
3.3 Evaluation of budget monitoring arrangements....................................................................6
TASK 4............................................................................................................................................6
4.1 Information essential to take financial decision....................................................................6
4.2 Relation between healthcare services costs and expenditure................................................7
4.3 Impact of financial considerations upon an individual while using care services................7
4.4 Suggest ways to improve the health and social care service through changes to financial
systems and processes.................................................................................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Managing financial resources refers to conduct various relevant activities such as sources
of funds, expenditure, cash flow, costing, accountability, auditing, budgetary control, variance
analysis, capital, investment decisions and many more (Aveyard, 2014). It is necessary to utilise
overall financial sources in correct manner to conduct operations in order to fulfil desired goals
of the organisation. The present report is based on Silloth Nursing and Residential Care Home
which provide care to people like Palliative care, Respite care and Convalescent care. This
assignment will focus on principles of costing and financial resources management along with
factors influencing the same. It will also discuss about budget monitoring and relation between
cost & expenditure with health care.
TASK 1
1.1 Principles of costing and business control systems
The principles of costing and business control systems which are utilised by organisations
to manage overall cost of production while conducting operational activities or procedures. It
involves the criteria of carrying out effective actions to control business systems in terms of
avoiding threats and facilitate optimum utilisation of financial resources to gain maximum.
However, the costing have several principles which should be followed by Silloth Nursing and
Residential Care Home while conduct the same in proper manner. It involves the principles of
costing such as including all costs, high quality data, transparent processes, relationship between
activities & resources, materiality, consistent across services and engage clinical & non- clinical
stakeholders (Glasby and Dickinson, 2014).
At the other hand, there are various certain business control systems which are required
adopt by Silloth Nursing and Residential Care Home to prevent abuse, errors, frauds and
mismanagement of funds. It involves effective systems such as Budget & budgetary control,
internal & external audit, bank & cash control, expenditure & purchasing control, software & IT
infrastructure, regulatory framework, forecasting and monitoring.
1.2 Information required to manage financial resources
The information is very important for managing financial resources including data about
sources of funds from where desired capital can be collected for conducting operations in proper
manner. It is necessary to gain correct information about these sources so that required amount of
1

funds can be collected as per requirement of business operations in respect of conducting better
outcomes appropriately. However, it includes actual information of income of Silloth Nursing
and Residential Care Home are legacies, fund raising, residential fee, investment income
donations etc. Moreover, it is necessary to gather needed amount of money in health care sector
in respect of conducting medical operational activities for treating diseases to make people
healthy (Kelly, 2015). At the other hand, given organisation can be used by management to
prepare costing, budget, variance analysis and cash flow forecast which provide support to make
correct decisions.
1.3 Regulatory needs to manage financial resources
There are various kinds of rules and regulations are made by regulatory bodies in order to
make sure about proper management of financial resources by considering several factors.
However, it involves fairness, accountability and truthfulness of financial data of an organisation
presented in annual account of the same. In addition to this, Silloth Nursing and Residential Care
Home should follow overall of these regulatory principles and take of care of relevant factors
while managing financial resources appropriately.
At the other hand, the given healthcare organisation is required to pay taxes in correct
manner according to the legal regulations made by authorised agencies. It provide support to
manage financial sources by completing relevant activities truthfully which is beneficial for
business appropriately.
1.4 Systems to manage financial resources
There are various kinds of systems which are utilised by different healthcare
organisations which are suitable for their business in order to manage financial resources in
correct way. It is important to conduct management of funds because it is considered as key
factor for initiating business and run it successfully (Rakodi, 2014). Moreover, it includes
effective system including set of methods, procedures, routine which is organised to conduct
regular activities of operations to generate desired outcomes. In context of Silloth Nursing and
Residential Care Home, they are required to adopt effective system to prepare proper annual
financial statement.
At the other hand, specific system is helpful to conduct management in systematic
manner which have less chances of generating issues and facilitate proper management of
2

financial resources. Moreover, they should systematically manage financial resources in respect
of increasing income, forecast the future, enable to make budget and analyse variance.
TASK 2
2.1 Different sources of income
There are different types of sources of income which can be utilised by health care
organisations in order collect required amount of funds for completing operational need of
business and generate desired profits (Erdley, Anklam and Reardon, 2014). It involves several
financial sources such as income from payment, donation, loans, overdraft, credit, savings, fund
raising events, insurance, equity and stocks. However, it is also essential to utilise correct sources
of income for gathering desired amount of funds which facilitate to conduct medical activities in
perfect manner in order to render effective care services. In addition to this, it is mandatory to
apply appropriate sources of collecting funds which provide support to reduce overall cost of
production along with increasing profit margin.
According to the case study of Silloth Nursing and Residential Care Home, they can
utilise certain sources of funds such as use donations, investment, fund raising activities, annual
subscriptions, legacies, gift fees and interest. It is helpful to avoid bank loans and external
sources so that rate of interest will be deducted from overall cost of manufacturing and gain
better profitability.
2.2 Factors influencing availability of financial resources
The financial resources resources get influenced by several factors such as political,
economic, social, technological, environmental and legal (Bulmer, 2015). However, these factors
may differ in different situations and geographical areas which are required to be thoroughly
analyse because it will results into increase or decrease in overall production cost. Moreover,
cost of manufacturing will provide support to improve profitability which facilitate to achieve
growth of the business successfully. Firstly, political factor includes government rules and
economic stability of particular country plays an important role on expenses of business which
may increase overall cost of manufacturing along with reducing profit margin. Secondly, social
values and technology trends are responsible for increasing cost of operations and these are
required to be followed for retaining effectiveness of healthcare organisations. Thirdly,
3

environmental policies and legal regulations are also necessary to evaluate their suitability
towards business while managing financial resources,
In context of Silloth Nursing and Residential Care Home, they should proper;y analyse
impacts of external factors and make strategies to reduce their negative impacts and put efforts to
grab positive effects respectively.
2.3 Different kinds of budget expenditures
The budget can be described as an estimated cost, revenue and resources over a specified
period of time which reflects reading of future financial situations as well as objectives (Hunter,
2016). It is all about blueprint of funds for achieving desired goals of business. However, it is
analysed that there several types of budget such as Master- budget, Capital- budget, Production-
budget and so on which are utilised in organisation. In case of Silloth Nursing and Residential
Care Home, they are required to prepare such budgets for completing a particular target of
business through generating better outcomes on regular basis.
Budget –
Particulars Amount
Investments 50000
Expenditures:
Permanent staff salaries 10000
Wages to other staff 5800
Equipments 9800
Rent 20000
Maintenance 3600
Total expenses 49200
Net profit 800
2.4 Decision making for expenditure
The decision making is very essential part because every operational activity has its own
role which is very important to maintain effectiveness of generated medical facilities (Nica,
2015). However, it is necessary to make appropriate decision in respect of spending correct
4

amount of funds for generating products or services to reduce health problems of patients which
are very sensitive cases and required perfection. In context of Silloth Nursing and Residential
Care Home, they are required to make appropriate decisions to manage financial resources which
helps to boost up efficiency of medical facilities to gain better results for patients. In addition to
this, they are required to utilise several effective as well as efficient management decision tools
such as variance analysis, cost benefit control, costing and forecasting (cash flow). Moreover, it
also includes net present value (NPV), Internal rate of return (IRR), Average rate of return
(ARR) and many more.
TASK 3
3.1 Management of financial shortfalls
Financial shortfalls mainly considered as the amount by which a financial liability or
obligation exceeds the amount of money or cash available (Torchia, Calabrò and Morner, 2015).
Shortfalls can be for temporary time period, arising out of any unique set of circumstances or it
may be persistent in order to indicate poor management practices. It generally occurs due to
delay in income which includes government funding, fee payment by patient or client and failed
comprises. In order to manage the financial shortfalls, management of Silloth Nursing and
Residential care home should be proactive and be aware to take some measures in places like
credit facilities that mainly involves with the overdraft, credit cards, fund reserves. In order to
manage financial shortfalls, Silloth Nursing and Residential care home should plan and prepare a
realisable budget by obtaining and gathering information from various cost centres along with
the proper consideration of inflation and changes that happens during the contingency planning.
3.2 Action taking in the event of suspected fraud
In law, fraud is referred as an intentional or wilful act of fraudulence by an any individual
or group of person with wrong intention of gaining personal benefits and the victims suffers from
huge losses. Fraud can be both for financial or for informational aspects. Fraud can be suspected
when false promises are made, changes in the behaviour pattern of human is observed or when
an individual has large personal debts or financial losses, regular errors or irregularities in
information and transactions taking place at odd time or with irregularities. If any fraud is
suspected in the Silloth Nursing and Residential care home, as manager should first analysis the
whole scenario of fraudulence and then note appropriate details in context to fraud and then
5

report the respond to staff concern to take future action to overcome fraudulence. An external
auditor is called in order to investigate the whole fraudulence scenario. In order to deal the fraud
cases top management authorises and superiors should be involved in order to solve the whole
scenario of fraudulence in the working environment of Silloth Nursing and Residential care
home or any other health and social care organisation.
3.3 Evaluation of budget monitoring arrangements
Budget is a concrete precise overall picture of the total operational activities of any health
and social care in monetary terms. Budgeting monitoring is very crucial in order to enhance
fiscal planning and decision making along with clearly recognise all the controllable and
uncontrollable cost areas. In context to Silloth Nursing and Residential care home, in evaluating
budget monitoring arrangements they should focus and emphasis on the controls puts in
appropriate place by the top management in order to monitor budget performance, variation,
efficiency along with effectiveness. This controls mainly involves with the budget monitoring,
variance analysis that is through proper cash flow statement, risk assessment on investments with
the proper use of NPV and ARR methods, spread sheet analysis and appropriate training for
managers. Budget monitoring is very essential part for both non-profit organisation as well as
profitable organisation as it allows to evaluate actual facts against budgeting serving as guide
corrective methods and also helps in future decision making. If Silloth Nursing and Residential
care home fails to monitor its budget, this will lead to affect future fiscal planning and decision
making.
TASK 4
4.1 Information essential to take financial decision
There are various authenticate information that plays very essential role in taking
financial future decision. Information required in order to make financial decision in health and
social care services includes pricing, quality of services, costing information, cash flows
statement. All this depends upon the level of the person taking the decision due to strategic
decision making is made at the top of the organisation that includes management level while
tactical and operational decisions that are made at other levels. In context with the strategic
decision making it mainly involves with the investment decisions along with the future growth
6

and tactical decisions. In order to make relevant investment and take future decision it is
important to use specific tools which involves NPV, ARR, IRR and profitability ratio.
4.2 Relation between healthcare services costs and expenditure
The main relationship between health care expenditure and health care costs is concern
about the interest to policies making in the light of steady increase in health care spending. In
order to provide proper health care for patient well -being many high government authorises,
agency are raising funds which generally includes all the healthcare expenditure and cost that is
spend on overall healthcare industry. Many cost benefit studies of healthcare were developed in
order to evaluate the economic gain that is somewhere related to expenditure for specific
treatment along with healthcare methods.
4.3 Impact of financial considerations upon an individual while using care services
The financial considerations impacts on an individual while getting medical services for
solving health care problems to remain healthy. It is observed and analysed that various kinds of
treatments and medications are expensive which are not affordable by patients so that it effects
their treatment procedure which is not much effective. However, cost of medications may define
the effectiveness of them in terms of making people disease free in limited period of time. In
context of Silloth Nursing and Residential care home, they should provide better medical or
clinical services at reasonable cost so that common people of country can take effective
treatment for severe disease.
4.4 Suggest ways to improve the health and social care service through changes to financial
systems and processes
From the above assignment, it is analysed that proper management of resources provide
support to boost up effectiveness of health care services. It has been suggested to given
organisation that they should mange financial resources in such a manner so that people will not
remain untreated due to increased cost of treatments for critical health problems. Moreover, they
are required to provide appropriate concession to poor citizens by appealing government
authorities to save their lives from severe disease.
CONCLUSION
From the above report, it is conclude that Managing financial resources can be described
as to conduct different related activities including sources of funds, expenditure, cash flow,
7

costing and so on. It involves several principles of costing including all costs, high quality data,
transparent processes, relationship between activities & resources, materiality, consistent across
services and engage clinical & non- clinical stakeholders. However, several regulations made by
regulatory bodies should be followed by given company are regular fairness, accountability and
truthfulness of financial data of an organisation. Moreover, relation between expense and
healthcare services refers to increasing effectiveness of the same which is important to provide
curation from disease properly.
8

REFERENCES
Books and journals
Aveyard, H., 2014. Doing a literature review in health and social care: A practical guide.
McGraw-Hill Education (UK).
Glasby, J. and Dickinson, H., 2014. Partnership working in health and social care: what is
integrated care and how can we deliver it?. Policy Press.
Kelly, A., 2015. The enterprise culture and the welfare state: restructuring the management of the
health and personal social services. In Deciphering the Enterprise Culture (Routledge
Revivals) (pp. 146-171). Routledge.
Rakodi, C., 2014. A livelihoods approach–conceptual issues and definitions. In Urban
Livelihoods (pp. 26-45). Routledge.
Erdley, S. D., Anklam, D. D. and Reardon, C. C., 2014. Breaking barriers and building bridges:
Understanding the pervasive needs of older LGBT adults and the value of social work in
health care. Journal of Gerontological Social Work. 57(2-4). pp.362-385.
Bulmer, M., 2015. The social basis of community care (routledge revivals). Routledge.
Hunter, D. J., 2016. Desperately seeking solutions: rationing Health Care. Routledge.
Nica, E., 2015. Moral leadership in health care organizations. American Journal of Medical
Research. 2(2). p.118.
Torchia, M., Calabrò, A. and Morner, M., 2015. Public–private partnerships in the health care
sector: A systematic review of the literature. Public Management Review. 17(2). pp.236-
261.
9