1. Presented by Financial Services
MIS & ACCOUNTING 101
Presented by Financial Services

2. Financial Management & Budgeting
Agenda
8:30-10:00 MIS & OHRS Standards
10:00-10:15 Coffee Break
10:15-12:00 Accounting 101
12:00-12:30 Questions
Financial Management & Budgeting

3. Section 1 MANAGEMENT INFORMATION SYSTEMS (MIS) STANDARDS &
ONTARIO HEALTHCARE REPORTING SYSTEMS (OHRS)
Financial Management & Budgeting

4. Financial Management & Budgeting
MIS & OHRS Standards
What is MIS & OHRS?
MIS - Guidelines for Management Information Systems in Canadian Health Service Organizations
Ontario Healthcare Reporting Systems (OHRS) - Standards and requirements for healthcare’s financial and statistical reporting in Ontario.
Financial Management & Budgeting

5. Financial Management & Budgeting
MIS & OHRS Standards
Provide Hospitals with Specific information on:
MIS Development
Account Structure
Define Accounts
Rules for Data Collection
Submission Requirements
Reporting Standards
Financial Management & Budgeting

6. Financial Management & Budgeting
Account Structure
The account structure consists of a primary account (5 levels) and a secondary account (3 levels).
Primary = Functional Centre (7*), Accounting Centre (8*) & Balance Sheet (1*-6*)
Secondary = Financial and Statistical
Revenues & Workloads (1*)
Salaries, Wages & Earned Hours (3*)
Supplies & Patient Activity (4*-9*)
Financial Management & Budgeting

7. Primary Account Structure
Functional Centre accounts are made up of 5 Levels
LEVEL LEVEL LEVEL LEVEL LEVEL 5
Level 1 – Identifies the fund type
71*, 72*, 73*
Level 2 - Identifies the service type
712*, 713*, 714*, 723*
Levels 3 through Provide additional levels of detail
– Palliative Care Team 7 1 2 5 2 9 4
Financial Management & Budgeting

8. Financial Management & Budgeting
Fund Types
Level 1 identifies the three fund types.
Fund Type 1 (71*) is reserved for hospitals & Cancer Care Ontario global operating budgets:
Acute Care Hospitals
Rehabilitation Hospitals
Chronic Care Hospitals
Mental Health Hospitals
Pediatric Hospitals
Specialty Hospitals
Financial Management & Budgeting

9. Financial Management & Budgeting
Fund Types
Fund Type 2 is designated Ministry of Health funding envelopes (72*):
Community Care Access Centres
Children’s Treatment Centres
Community Mental Health
Medical Formal Education
French Language Services
Interim Long Term Care
Municipal Taxes – Bed Levy
Mid-wives
Nurse Practitioners
Financial Management & Budgeting

10. Financial Management & Budgeting
Fund Types
Fund Type 3 (73*) is used for services funded externally or by non-health tax dollars:
Federal Government
Municipal Government
Other Ministries
Non-Government Agencies
Financial Management & Budgeting

11. Financial Management & Budgeting
Service Type
Level 2 identifies the service:
7*1 = Administration and Support Service
7*2 = Nursing Inpatient Services
7*3 = Ambulatory Care Services
7*4 = Diagnostic and Therapeutic Services
7*5 = Community and Social Services
7*7 = Research
7*8 = Education
7*9 = Marketed Services
Financial Management & Budgeting

12. Financial Management & Budgeting
Service Type
Examples:
= Finance
= Surgical Inpatient Unit A
= Emergency
= Respiratory Therapy
= Prenatal Teaching Classes
= Oncology Research
= Library
= Cafeteria
Financial Management & Budgeting

13. Financial Secondary Accounts
The financial secondary accounts have 3 levels:
LEVEL 1 LEVEL 2 LEVEL 3
Level 1 – Identifies the financial broad group
1*, 3*, 4*, 6*
Level 2 – Defines the nature of the revenue or expense within the broad group
119*, 350*, 460*
Level 3 – Captures further details
35010 – UPP worked salaries 3 5 1
Financial Management & Budgeting

14. Financial Management & Budgeting
Financial Secondary
There are 9 categories in Level 1:
1 = Revenue
2 = Balance Sheet
3 = Compensation
4 = Supplies
5 = Patient Specific Supplies ( Not used in TBRHSC)
6 = Sundry
7 = Equipment
8 = Referred / Contracted Out
9 = Undistributed Buildings & Grounds
Financial Management & Budgeting

15. Financial Secondary Accounts
Level 2 Defines the Nature of the account – Examples are:
1 = Patient Revenue (110*), Recoveries (120*), Donations (140*)
2 = Not used therefore available as Balance Sheet Secondary
3 = MOS (310*), UPP (350*), Medical Staff (390*)
4 = Food (450*), Instrument (460*), Drug (465*)
6 = Dept. Phone (610*), Travel (620*), laundry (628*)
7 = Equip depreciation (750*), equip maint (710*), minor equip (765*)
8 = Referred / Contracted Out dry cleaning (825*)
9 = Undistributed Build & Grounds reno (940*), rent (960*)
Financial Management & Budgeting

16. Statistical Secondary Accounts
The statistical secondary accounts have 4 levels
LEVEL LEVEL LEVEL LEVEL 4
Level 1 – Identifies the statistical broad group
1*,2*,3*,4*
Level 2 – Indicates the type of measure within the broad group
4 02*,3 10*,5 15*
Level 3 & 4 – Provides further details
– Involuntary MH Adult Readmissions 4 2 1 5 4 4
Financial Management & Budgeting

17. Statistical Secondary Broad Group
There are 8 categories in Level 1:
1 = Workload
2 = Staff Activity
3 = Earned Hours
4 = Patient Activity
5 = Service Recipient Profile
7 = Functional Centre Profile
8 = Organization Profile
9 = Priority Programs
Financial Management & Budgeting

18. Statistical Secondary Accounts
Level 2 defines the type of indicator – examples are:
1 = Pulmonary diagnostics workload (115*)
2 = Volunteer hours (239*), Registration (255*)
3 = MOS (310*), UPP (350*), Medical (390*) Worked hours
4 = Admissions (401*), Patient days (403*)
5 = Medical (510*), Surgical (515*), Plastic (575*)
7 = Number of beds (710* ), Bed days staffed (720*)
8 = Number of paid employees (820*), Calendar days (898*)
9 = Oncology (916 66*), Dialysis (916 86*)
Financial Management & Budgeting

19. Financial Management & Budgeting
ACTIVITY SHEET
Financial Management & Budgeting

20. Financial Management & Budgeting
COFFEE BREAK
Financial Management & Budgeting

21. Financial Management & Budgeting
Section 2
ACCOUNTING 101
Financial Management & Budgeting

22. Financial Management & Budgeting
Costing
What are Direct Costs?
Direct Costs are costs that can be traced directly to the operations of each procedure, process, department and/or program. - (AKA variable)
What are Indirect Costs?
Indirect Costs are costs that are allocated to various procedure, process, department and/or program on the basis of their relative usage. – (AKA fixed or overhead)
Financial Management & Budgeting

23. Financial Management & Budgeting
Costing
Direct Costs:
RN Salaries & Benefits
Medical Supplies
Drugs
Indirect Costs:
Laundry
Telephone
Rent
Stationary Supplies
Financial Management & Budgeting

24. Financial Management & Budgeting
Overhead Allocation
Activity Based Costing, allocates overhead costs (indirect) based on the usage and/or consumption.
For example: Laundry – Each functional centre utilizing Laundry’s services is allocated a portion of Laundry’s total costs based on the average pounds of laundry they generate each month.
Financial Management & Budgeting

25. Financial Management & Budgeting
Overhead Allocation
Laundry Functional Centre Pounds & Costs
Pounds Costs
FC ,000
FC 2 12,000
FC ,000
FC 4 10,000
FC ,000 *
FC ,500
FC ,000
Total 38,500 lbs $42,500
Financial Management & Budgeting

26. Financial Management & Budgeting
Overhead Allocation
Pounds Costs
FC , $ 6,623.38
FC 2 12, $13,246.76
FC , $ 2,207.79
FC 4 10, $11,038.96
FC ,000 * $ 4,415.58
FC , $ 1,655.84
FC , $ 3,311.69
Total 38,500 lbs $42,500.00
FC 5 = ($42,500/38,500) x 4000 lbs = $4,415.58
Financial Management & Budgeting

27. Financial Management & Budgeting
Cash vs. Accrual Basis
Under the cash basis, revenues and expenses are recorded in the period in which the cash was either collected from a “customer” or paid to a vendor.
Under the accrual basis, all revenues and expenses, whether collected/paid or not, are accounted for in the period in which the benefit occurred.
Financial Management & Budgeting

28. Depreciation / Amortization
Amortization is an estimate, based on cost, of an asset’s useful life that has expired in an accounting period.
Accounting for Assets
Acquisition – Record at the purchase price
Amortization – Straight line depreciation
Disposal – Calculate a gain or loss
Cost – Acc. Dep. = Net Gain/Loss
Financial Management & Budgeting

29. Financial Management & Budgeting
Financial Statements
Balance Sheet – A formal financial statement showing the financial position of an organization at a specific point in time. Assets, Liabilities and Equity are reported.
Income Statement – A formal financial statement showing the net income (the result after all revenues and expenses have been accounted for). The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported.
Financial Management & Budgeting

30. Financial Management & Budgeting
Balance Sheet
Debit
Current Assets
Cash
Acc. Receivable
Inventories
Prepaid Expenses
LT Assets
Land
Building
Equipment
Assets = Liabilities + Equity
Credit
Current Liabilities
Accounts Payable
Short Term Loans
LT Liabilities
Mortgage
Long Term Loans
Equity
Retained Earnings
Financial Management & Budgeting

31. Income Statement Revenues (credit) Expenses (debit)
Ministry of Health
OHIP
WSIB
Recoveries
Expenses (debit)
Salaries & Benefits
Medical & Surgical Supplies
Drugs
Sundry
Revenues – Expenses = Deficit / Surplus
Financial Management & Budgeting

32. Financial Management & Budgeting
Activity Worksheets
Financial Management & Budgeting

33. Financial Management & Budgeting
QUESTIONS?
Financial Management & Budgeting

34. Financial Management & Budgeting
References
Ministry of Health and Long-Term Care, OHRS, Version 5.1 Mar 2004
Financial Management & Budgeting