Nowadays’ health care facilities, given the diversity in the health organizations are tremendously multifaceted. Due to the complexity, concern has been raised primarily from the governments globally to take charge of the accounting for health care facilities which necessitates the science of physical maintenance of the premises and interactions of human behaviors within the organization thus requiring financial and accounting strategies (Nowicki, 2015). The complexity of today’s environment has led to the introduction of financial management and accounting to all facets with in a health care organization. Accounting is no longer the sole influence of the finance department, but rather health facility managers are given responsibility for financial management in different units. For instance, pharmacy directors make significant financial management decisions daily. Despite the government’s involvement in facilitating the accounting procedure in health care facilities, there is need to have a firm understanding of accounting and financial management with in the health care organization that they lead.
Cash Disbursement Procedures
Cash Disbursement Procedures for government operated health care facilities are used to set control objectives. These guarantee that money is distributed only upon correct endorsement and that the demand for payment is supported by the proper documentation, for legal business commitments, and is correctly noted (Bragg, 2013). For instance: that all payments mainly offer a direct advantage to the health care facility, accurately reported for tax purposes, and used in submission given donor boundaries and these can be detected through internal control objectives as well as disbursement voucher approvals.
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Internal Control Objectives and Disbursement Voucher Approval.
Internal control objectives in health care facilities aim at investigating the tasks, necessities, and standards in different dealings. Applying internal controls is significant in the area of cash management for the reason of the various nature of the processes involved, for example, processes, Billings, expenditure, payments, and collections, as well as the disjointed oversight errands commonly related to these processes (OECDA, 2000).Whereas, Disbursement Voucher Approvals are used in health care facilities to check cash out flows of money to settle duties (disbursing money).An example is money paid out to run a health center, cash expenditures, extra payments, Disbursing money is part of cash flow. In situations where the cash flow is negative, it implies that disbursements are greater than revenues, thus initial the cautionary of possible bankruptcy (Daniel, 2013).
Fixed Assets Procedures
A fixed assets procedure incorporates a policy that reports bookkeeping during the purchase planning stage of health care assets and even when the same is worn out, as well as its disposal. These assets are probably used for many accounting periods (Lexis Diligence n.d.). Fixed assets are frequently not measured to be a liquid form of assets in contrast to current assets. The Examples of shared types of fixed assets in this discussion consists of health care, land, buildings, furniture, gears, machines, and automobiles (Brian, 2016).Since fixed assets are long-term investments, it is imperative to have endorsement-dispensation techniques, and asset tracking for each equipment in a given government operated health care facility. Therefore, this can be possible through fixed asset accounting to improve financial management in the health sector.
Fixed Asset Accounting
Fixed assets in health care facilities are not held for resale, but they are held in trust for government administrative purposes in the production of goods and services.Thus, it is worth noting that any given assets that are deemed worth for resale should always be accounted for in the name of inventories instead of fixed assets (Richard, 2001). However, tools apart from those held for-sale, for example, manufacturing gears may be categorized as fixed assets. Accounting for fixed assets consist of costs, valuable life, enduring value, depreciation, and remuneration. When accounting for capital in the health care facility, one has to define the cost of procurement (The United States, 2009). That is to mean the sum of money disbursed to secure that particular fixed asset.For example an ambulance car. It also comprises of any amount that can be credited directly for its upgradings such as the clearance fees or insurance fees.
Inventory Procedures
The Inventory Procedure creates a policy with a process for the recording, documentation, and accountability of all health care facilities.For example, possessed fitting sand movable equipment items usually having a minimum life expectancy of over two years (Grover, 2016). The government, in this case, employs a managing team to be held responsible for the maintenance of equipment, control to provide a safety measure against loss and also facilitate efficient functioning. The management employs a suitable property and equipment monitoring system to meet the need for comprehensive information as to specific credentials of the property (Lexis Diligence n.d.). They include; devaluation of the consignment and where to find the equipment in any medical establishment. Therefore, the person responsible for executing the inventory procedure carries on with the inventory accounting as a policy.
Inventory Accounting
The branch of accounting that is employed to value and perform book-keeping for changes in the inventory assets in a given health care facility, which business is known as inventory accounting. Changes in value can occur due to some reasons including depreciation, deterioration, desuetude, variation in consumer taste and augmented demand. There will always be a condition of the manager of inventory management to be concerned that inventory is accurately accounted for agreeing to the exact set of principles, hence, minimizing the possibility of overstressing profit by belittling inventory value (Bragg, 2013). Inventory is well-thought-out as an asset and is logged so on the balance sheet. Doing a correct valuation to include inventory on the balance sheet needs a physical count of the inventory to create the amounts at hand.An uninterrupted inventory system that depends on accurate record keeping of all inventory-related transaction is always necessary.
Cash Receipt Procedures.
Cash funds are always kept in safe custody to prevent a loss that may occur due to mismanagement there are two required capital reserves found in Medicare centers, which include the petty cash and the resident trust fund (Richard, 2001). It is incumbent upon the facility to employ strong internal controls to protect the capital from possible skimming because the fund has to be reconciled on a timely basis and failure to balance the books of accounts may lead to serious federal consequences. Notably, there has to be a routine for transactions in the Medicare center accounts like assigning people to make deposits, disbursements and issuing receipts. In fact, stakeholders have to ensure that expenditure and receipts are properly signed as well as consigned by more than one transacting agent (Brian, 2016) Therefore, cash receipt procedures involve regular receipting, individual receipts control objectives, and deposits of money to enable a proper process management of funds
Internal Control Targets and Regular Receipts
Under the cash receipt cycle collections of a medical center are identified, the total collections are managed and deposited to respective bank accounts intact. In fact, there is a breach of the cash management Act when a party hesitates to record receipts or deliberately refuses to file revenues and diverting capital is punishable by law (Bragg, 2013). Cash on hand and bank accounts are supposed to be subject to physical safe guards and custodial accountability procedures. On the contrary, issue receipts just regularly without fail even in credit transactions. Also, the receipts must arrange in a sequence, renumbered for proper perusal, the receipt must be showing the medical department, date and the amount in issue (Richard, 2001). Therefore, the cash receipt cycle and regular revenues fall under the cash receipt procedure to ensure the proper management of funds in health centers.
Individual Income and Deposits of Money.
When different medical personnel collects money from the field, proper revenues are used to follow the reactions. Financial authorities of the approved the receipt and paid in triplicate, copies are distributed to the accounting assistant together with all the cash collected, and a receipt copy must remain within the book for future reference. Individual revenues follow a particular form that describes the purpose of the receipt and the department that has issued it with significant dates (Richard, 2001). On the contrary, deposits of money are kept with the treasury office because the Medicare earning are public funds. Also, the accounts of medical facilities are opened with the approval of the county treasurer, all deposits in a state are handled based on the laws of that country. Therefore, special receipts and deposits of money are procedures are under cash receipt procedures used to monitor receipts of payments in health care management.
After establishing the existence of the duty of care, breach, and causation, one has to prove that they suffered damage or injury. Risk management is an integral part of many business entities today in the global economies. Nurses understand that in the case of breach of any conduct or policy or guideline, results into the penalty when reported to courts of law or to the governing body that decides the fate of nurses after breaching conduct. Additionally, individuals also feel protected and expect maximum support from the nurses whenever they are in a medical setting. They will always feel at ease as their information is kept private and know their rights incase anything goes wrong (Lexis Diligence n.d.). Therefore, this all helps to rule out negligence in nursing thus creating harmony within professional work. Besides, it augurs with the accounting callings of the medical profession where all receivables must be documented in a bid to ensure that nothing falls in the health care center. Today, there are diverse and more complex risks in the globe in the various industries both small and large scale.
Account Receivable Procedures
Monitoring accounts receivable are done to ensure that payments are made on a timely basis by the sponsors to minimize write offs. A project that is sponsored arises when invoices are sent to different authors for payments (Daniel 2013). Account receivable procedures provide documentary details on how different accounts are made. The application of the system suits transactions on credit basis and the various ways of maintaining the sales invoices that are pending payment (Richard, 2001). Statements a can be issued on a monthly basis on various accounts that are credited to monitor the departmental cash flow. Also, invoices due must be maintained and payments controlled by using necessary documentation to that effect. Therefore, accounts receivable deal in monitoring accounts, including the debtors.
Nurses are Medicare workers who owe a duty of care to any patient they offer service. Their duty emanates from the neighbor principle, which asserts that people must behave in a way that does not affect their neighbors in any way. This gives rise to the term beneficence that exists to promote actions for the benefit of others in the medical field. Therefore, nurses have a duty to serve people appropriately. However, breach of the duty of care gives rise to liability if the victim happens to file a lawsuit under the tort of negligence. In this, the emphasis is placed on the fact that a given behavior ever existed in time in a bid to tackle any event from happening to the masses and when a nurse averts from this breach happens. Therefore, a duty of care exists between nurse and patient established by the law, breach of which gives rise to liability.
Accounts Receivable
Accounts receivable help in the maintenance of records in an appropriate way for a government department and individuals for whom fees are levied. Besides that, they are used in billings of different transactions and with the authorisation of the exemptions available (Grover, 2016). It has to be noted that in many times government loses a lot of revenue because of errors in billings and in cases where employees divert money to personal use. More so, there is a probability of inaccurate billing which into plays the application of account receivable procedure (Richard, 2001). Further, in accounts receivable collections are collections deposited, identifies and the sums collected are collected and deposited in the primary account. Therefore, debtors deal with billings, adjustments and control developing totals in a medical facility.
Payroll Procedures
In the payment cycle, wage rates, additions, separations, deductions, and salaries must be documented, and organizational policies must comply with federal laws and grant agreements and legislation. There are problems of unauthorized names entered in the payroll, terminated employees getting payments, using higher salary rates and penalties for noncompliance to set legal norms (Daniel, 2013). Employees have the ability to analyze data relating to employees so that they can review and approved payment procedures(Richard, 2001). Also, data processing is done to code and documentary information for account distribution (King & Daly, 2010). Furthermore, computations for net pay, deductions, gross pay and net pay is computed basing the accounts classification authorized. There for payment procedures deal on wages and determine the remuneration of employees based on time and work done by using a payroll accounting system to promote the fair amount of each employee.
Payroll Accounting
Payroll accounting is necessary for determining the boundaries of employment and the sums of money to effect payments on a timely basis. Employees signing required the authorization of dedications. Moreover, sign in sheets and time cards are reviewed to make appropriate payments to the employees at the end of the month (OECDA, 2001). Additionally, the payroll journal is put into play by providing financial data, which applies to the payment. The spreadsheet contains details like cheque numbers, payment date, necessary taxes, employee names, hours and times allotted for every monthly feature that the employee engages in is also included like leave hours (Richard, 2001). In fact, social security and necessary deductions are balances by analyzing employees subject to deductions in respect to the federal laws. Therefore, payroll accounting deals with the payment of employees on a timely basis by deducting necessary deduction.
Conclusion
Accounting procedures for government operated health care facilities are extensive and are applied by many health centers around the country. The methods exist to create uniformity, certainty, and clarity in payment found in the medical field. Different methods are used to affect the accounting systems, and they are used differently according to the financial need that is available now. The methods include cash receipt systems, which deal with in-house control objectives regular receipts, cash receipts journal, personal receipts and money payments in a health care department. Cash disbursement is also a procedure, which deals with the payment voucher approval, vendor cheques preparation and cash distribution journal to oversee the distribution of money in a health department. Additionally, the account receivable procedure deals with the internal accounts of a medical center by following all accounting procedures and all laws that govern accounting in health care. The other methods include payroll procedures, fixed assets procedures and inventory procedures, which are meant to oversee the swift movement of monetary transactions in the healthcare sector.
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