In Your Capacity as a Financial Controller You Are Requested to Explain What Mechanisms Would You Adopt to: (a) Ensure Regular Monitoring of the Business (B) Alert Respective Internal Stakeholders Particularly When an

Topics: Allocation, Cost, Strategic misrepresentation Pages: 8 (616 words) Published: January 2, 2013

Msc. Health Service Management

You are the financial Controller responsible for
the compilation and monitoring of Allied
Services Budget which budget encapsulates the
Occupational Therapy, Physiotherapy & Speech
therapy services with in an NHS region. The
region covers a General Acute hospital, Rehab
hospital as well as an Elderly hospital

In your capacity as a Financial Controller you are
requested to explain what mechanisms would
you adopt to:
(a) Ensure regular monitoring of the business
(b) alert respective internal stakeholders
particularly when an adverse variance seems
Articulate also which information would you
make use of to achieve (A) and (b) above and
what reporting structures would you deem
appropriate to achieve your objectives.

Allocating Budgets
The budget allocated depends on:

The time period
What one aims to achieve in line with the over
all strategy of the business

Targets to be reached

Past Years budget

Future projections

Allocating Budgets
Budgets based on the cost of:

Number of therapy sessions

Length of therapy sessions

Type of therapy session

Size of Region


Regular Monitoring of The Budget
To effectively monitor the budget allocated, each
hospital should produce data for each allied
service per cost center and where possible
down to patient level for each allied service for
each hospital within the region.
Such data should be ideally be produced monthly

Regular Monitoring of The Budget
Such data should include:

Past Reports

The actual budget for that period

Actual expenditure to date

Future expenditure commitment

Actual balance remaining for the period

Forecast Outturn

Forcast Outturn Variance

The importance of Regular Monitoring

The need to optimally use public resources as
pressures on the public sector budget increase.
There is a risk that value for money is not
achieved if effective monitoring & forecasting is
not present
This could lead to situations where: Funding
may not be fully utilized, areas of greatest need
do not get the budget required and there is
unrealistic overall assessment of spending


Integrated MIS covering each service for each
hospital, so that adequate monitoring can be
Monthly management information returns to
head office.

A common and consistent system which
optimises effort and provides accurate
forecasting and monitoring information.
Reviewing monthly management information
systems would also provide an opportunity to
inform the design of the forecasting and
monitoring functionality.

Alerting internal Stakeholders

Budgets are reviewed through monitoring
rounds which take place every 3 months.

Assessment of current and future expenditure
plans according to up to date information
Management of the respective hospitals are
alerted during these rounds when variances

Investigating Variance
Adverse variances should be investigated.

The Size of the Variance may give an indication
of the problem

Possible Interdependence of variance


Costs & Benefits of correction

Investigating Variance
Possible Interdependence of Variance & Trends

Increase in one hospital vs. decrease in another

Bed Blocking

Inappropriate referrals

The possibility of Re-allocation of funds &

Alerting Internal Stakeholders

Summery of the problem & impact

Details on the problem

Impact of the problem

Proposed action


Consensus reached / Decision taken



Variance may be due to external factors, in
which case further analysis on cost-cutting
measures within the hospital may need to be
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