Controlling and budgeting function in Health service.pptx

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1. Controlling function in health service administration Gita karki Roll no:- 03 6 th semester KHSC

2. OUTLINE Concept of controlling Principle Process of control Financial controlling Human resources and activities controlling Friday, June 17, 2016 2

3. CONTROLLING Controlling is a procedure of ensuring that satisfactory progress has been made in accordance with the plans and noting down the experiences benefited for achieving forth coming goal. According to Robbins and DeCenzo ”Control is the process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviation.” Friday, June 17, 2016 3

4. PRINCIPLE Principle of efficiency of control: Efficiency of control depends on identifying approaches and techniques and also highlighting the causes of possible or real deviations from plans by minimizing the costs or other unwanted consequences. Principle of affirmation of the objective: Identifying potential or deviations from plans must be controlled earlier by allowing remedial actions in order to achieve the objectives. Principle of control responsibility: The manager who is given the charge of completing the plans is mainly responsible for exercising control. Friday, June 17, 2016 4

5. 4)Principle of direct control: There is no need for indirect controls if the managers and their subordinates are excellent in quality. 5)Principle of standards: Efficient control needs accuracy, purpose and aptness. 6)Principle of critical-point control: Effective control needs attending crucial issues in reviewing performance against an individual plan. Friday, June 17, 2016 5

6. 7)The exception Principle: To achieve efficiency in the results of control, it is important for a manager to focus his control on exceptions. 8)Principle of flexible controls: Flexibility in designing controls is important for them to succeed in spite of failures or unexpected changes in plans. 9)Principle of Action: Proper planning, organizing, staffing and direction is required for justifying control in case there is any deviations from plans. Friday, June 17, 2016 6

7. 10)Principle of reflection of plans: Designing more controls will effectively serve the welfare of the enterprises and its managers and also reflect the structure and nature of plans. 11)Principle of organizational aptness: Designing more controls will assist in correcting the deviation of events from plans and also reflect its place in the organization which is accountable for action. 12)Principle of individuality of controls: It is important for individuals to understand the control measures and exercise it in order to be consistent with the position, operational tasks, skill and needs. Friday, June 17, 2016 7

8. Importance 1. Adjustment of operation 2. Policy verification 3. Managerial Responsibility 4. Psychological pressure 5. Coordination in action 6. Organizational effectiveness and efficiency Friday, June 17, 2016 8

9. Process of control Friday, June 17, 2016 9 Setting standards Measuring performance Finding & analyzing deviations Corrective actions control

10. Financial Control Financial control are accounting based. There are 4 types of financial control, i.e.; 1.Financial statements 2.Ratio analysis 3.Break-Even analysis 4.Auditing Friday, June 17, 2016 10

11. 1.Financial statement They provide a profile of financial circumstances. They track monetary value of transactions. They monitor; liquidity, profitability and leverage. Balance sheet, Income statement and Cash flow statement are the 3 types of financial statement. Balance sheet is a summary statement of assets, liabilities and net worth at a given point in time Income statement is a summary of financial performance over a period, generally 1 year. It shows cost, expenses, revenue and taxes. Cash flow statement is a statement of sources and uses of cash funds. It shows where cash came from and where cash was used during the given period. Friday, June 17, 2016 11

12. 2.Ratio analysis Ratio are used for efficiency and profitability control. They show the relationships between figures for evaluating financial performance. They can be based on balance sheet or income statement. The popularly used ratios are; I. Liquidity Ratio: They measures ability to pay back short term debts. Friday, June 17, 2016 12

13. II. Debt Ratio: They measure ability to meet long term financial obligations. Also known as solvency ratio. III. Profitability Ratio: They measures the efficiency of operations. The ratios express profits as percent of sales or total assets. IV. Operating Ratio: They are related to manufacturing and marketing . Inventory turnover ratio is an example. Friday, June 17, 2016 13

14. 3. Break-Even analysis This analysis identifies break even point where revenue equals costs. Profit is possible only when sales exceed the break even point. It is also known as cost-volume-profit analysis. Friday, June 17, 2016 14

15. 4. Auditing It is comprehensive, systemic, independent and periodic examination of truth and fairness of financial statements. It examines properties (compliances), efficiency and performance. It can be internal, external and management audit. i ) Internal audit: It is carried out by the members of the organization. It examines accuracy and reliability of financial transactions. It evaluates operational efficiency and control system. It helps early detection and rectification of errors. Friday, June 17, 2016 15

16. ii) External audit: It is independent examination of financial accounts and statements by legally authorized auditors. It takes place after the end of financial year. It is done to safeguard the interests of owners and shareholders. iii) Management audit: It assesses overall effectiveness of management. It indicates overall health of the organization. Friday, June 17, 2016 16

17. Human resources and activities controlling Human resources controlling includes planning, assessment of the employees and control of both the performance of the employees as well as the staff working in human resources. At the micro level, the organization needs to do career planning for employees and succession planning for key positions in the organization. At a macro level, the organization needs to carry out workforce (manpower) planning and salary planning. Friday, June 17, 2016 17

18. Recruitment and selection, training and development, attrition management, welfare management, and compensation management are some of the areas over which the organization needs to exert control. Employees should be equitably paid for them to be satisfied and productive. The HRIS is useful for controlling human resource management in the organization and achieving its management control objectives of efficiency, effectiveness, disclosure, and compliance. Friday, June 17, 2016 18

19. Budget

20. Content Introduction of budgeting Processing of health budgeting in Nepal Weakness/Problem Friday, June 17, 2016 20

21. Introduction A budget is a statement of future expenditures and incomes for planning and controlling financial resources. A budget is a forecast of costs and / or incomes It focuses on pre control. It is a tool for annual plan control , it plans and controls the acquisition and use of resources . It finds and corrects deviations Friday, June 17, 2016 21

22. Budget is a concrete precise picture of the total operation of an enterprise in monetary terms.- HM Donovan Budget is a formal quantitative statement of the resources set aside for carrying out planned activities over given period of time- Stonner Friday, June 17, 2016 22

23. Process of health budgeting in Nepal In the year, 1951/52(2008B.S), the first budget was present to the people of Nepal. In the expenditure side , Nepalese budget is divided into developmental and regular expenditures. Developmental expenditure mainly include the expenditure that are going to be made. Regular expenditure includes the expenses that are going to made to maintain law and order, run the government and debt payment. The revenue is divided into tax revenue and non-tax revenue. Friday, June 17, 2016 23

24. Nepalese budget is an executive type budget. National Planning Commission (NPC) and line ministries plays the significant role to prepare budget. Nepal Central Bank and Ministry of Finance (MOF) estimate the revenue and expenditure for next years. Macro economic policy will be set up by organizing joint meeting between MOF,NPC and central bank. Finance ministry plays the leading role to prepare budget. Friday, June 17, 2016 24

25. Based on that exercise the MOF and NPC fixed budget ceiling and NPC then sends budget formulation documents with some guidelines both for revenues and expenditure to the offices of the constitutional bodies, ministries and other office in the month of November ( Marga ). The ministries and departments are requested to submit the estimates of the annual budget by February . Friday, June 17, 2016 25

26. The ministries have to prepare regular and developmental budget separately. All the offices have to submit their budget to the MOF and NPC based on their needs through respective ministries (MOHP) with supporting facts and figures within schedule time. The district and regional level office has practice bottom up planning in different districts and submits to the concerned ministries, MOHP. The ministries review budget prepared by district and regional level offices. Friday, June 17, 2016 26

27. 27 Present budget formulation approach Top down approach (for central government): Bottom up approach (for local government): 27 Ministry of Finance (MOF) National Planning Commission (NPC) Line Ministries Departments District offices NGOs Ward offices/ Consumer committee/ Political parties VDC/ Municipality District Council District development Committee

28. The visibility of the project is checked. The budget of the project are made more realistic. The budget proposal submitted by the ministries is reviewed in NPC and MOF. NPC reviews the budget proposal to incorporate plan priorities in the buget.NPC include as well as drop out the projects if it feels necessary. MOF organized numbers of formal and informal meeting to accommodate various view points and approximate budget ceiling. Friday, June 17, 2016 28

29. The Ministry of Finance presents the estimates of revenue and expenditure Nepal government for the next fiscal years to the joint session of parliament in the 2 nd week of July (last week of Ashad ) of every year. The Ministry of Finance puts votes on account bills on the parliament, after the few days discussion on the underlined principles and policies in both the houses. After then it takes nearly 2 weeks to get royal assent then only budget become legal. Voting take place to pass the budget. After then, the budget is send to president for final approval. Then after it becomes an act. Friday, June 17, 2016 29

30. The executive body implement the budget with the help of subordinate bodies. The line ministries have to maintain all the records while implementing the budget. Finally, the Auditory General’s Office, a constitutional organ, audit the accounts kept by the executive body of the government. Auditing is done to ensure funds are spent in conformity with the law. Friday, June 17, 2016 30

31. The government of Nepal has unveiled the budget of Rs 819.46 billion for the fiscal year 2072 / 73 (2015 / 16). 5.72% of total budget is allocated in health sector i.e. Rs 46.87 billion. The government has allocated Rs 33.52 billion for the health sector in the fiscal year 2071/72 BS. Friday, June 17, 2016 31

32. Health sector Satellite hospitals to be setup to ease the pressure in Capital based government hospitals. Plans to build ICU and NICU facilities in all government hospitals Madan Bhandari Trauma Centre in Bharatpur Hospital and Hari Khadka Trauma Centre in Dhaulagiri Zonal hospital to be built. Bheri Hospital to be turned into Cardiology hospital. Friday, June 17, 2016 32

33. Abortion services at the government-run health institutions will be free. Likewise, newborns upto the age of 28 days will get free treatment. The government announced a campaign of ‘one village: one doctor.’ The nation will be declared fully-immunized by 2017.

34. Rs.270 million have been allocated to establish a hospital with minimum 15 beds in each newly formed municipalities in the coming fiscal year. Rs.270 million have been allocated to start free of cost master level education including MD and MS provided by the government teaching institutes.

35. Weakness/Problem Information collection method for budget formulation in district level offices is traditional. Negligence towards using program budget formats by the district offices. Excessive dependence on untrained junior level staffs. Lack of trained and experienced accountants. Local government has relatively less experience, inadequate human capacity to formulate and execute plan, program and projects. Friday, June 17, 2016 35

36. Inadequate coordination among ministries and NPC. MOF is still using traditional method of budget allocation, giving less, often cut back the budget than requested, Line ministries often over estimate required resources. Weak coordination between central government and local government causing duplication in programs and projects. Friday, June 17, 2016 36

37. Reference Dr. Agrawal Ram Govinda . Principle of management in Nepal Neupane D & Khanal V. A textbook of health service management in Nepal www.control human resources.com www.baumann-finance.ch www.info.com www.hubpage.com Friday, June 17, 2016 37

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