Health Services Management Financial Management Brian Fitzgerald

“ Routine Value for Money is not generally present” “Multi annual budgeting needed” “Develop approach to VFM” “Set cost reduction targets” “Significant investment in MIS” “Pursue shared services – financial transactions, purchasing, material management” “Robust process for strategic planning”

“ Limited evidence of effective control”” “Budgeting and service planning flawed” “Cost containment unstructured” “Limited financial management capacity” “Governance & Controls lack clarity” “Multiple legacy systems” “Systems & processes do not deliver integrated financial management” “

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Overview of Financial Management Corporate Strategy and Financial objectives Effective financial management requires strategy and objectives National health strategy Organisational strategy from HSE to service provider level Private sector approach UK & International health sector experiences

Financial Planning Strategy > Objectives > Operational Plans > Budget plan Budgets used at many levels in health > national > regional > local Performance management Service planning Business cases Cost containment plans

Financial Governance Generally Accepted Accounting Principles International Accounting Standards Government Oversight – PAC / C&AG Role of the Governing Board Role of Audit & Finance Committees Internal Audit The Finance Function

Structure and reporting relationships Service role Variance to plan / metrics Controlling role Fiduciary role Professional Capability Procurement

Functions of Financial Management Financial Management Structure Financial Accounting (balance sheet accounting - compliance, treasury management, transaction processing, income maximisation, taxation) Management Accounting (budget setting and performance monitoring, cost control – human resource and non-pay, decision support and service costing) Procurement (contracts management – tendering/VFM, stock management, acquisition controls, logistics)

Objectives of Financial Management Effect Org.s Policies/Objectives and Strategy – financial planning Communicate Financial Plans and Performance Minimise Finance Requirement & Maximise Return on Investment Efficiency & Economy of Operations Safeguard Assets Develop suitable Accounting & Financial Policies

Financing / Funding Private Sector - Share Capital - Loans If profitable, new funding is unlikely to be required annually Public Sector - Revenue Funding - Capital Funding Since no revenue is generated, all expenditure has to be provided by DOHC each year

Thank You Questions?