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

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Finance

Msc. Health Service Management

Question
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
probable
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



Demographics

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

Systems




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

Systems
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
occur.

Investigating Variance
Adverse variances should be investigated.


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



Possible Interdependence of variance



Trends



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 &
resources

Alerting Internal Stakeholders


Summery of the problem & impact



Details on the problem



Impact of the problem



Proposed action



Suggestions



Consensus reached / Decision taken



Evaluation

Conclusion




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