5.1
INTRODUCTION
In this chapter, we present summary, conclusion and recommendations based on the data collected and analyzed in the process of this research.
5.2
SUMMARY
The objectives of this study included:
1. Presenting an honest & authentic view of the general accounting practices of 37 Military Hospital.
2. Gaining more insight into the budgetary process of 37 Military Hospital
3. Learning more about the internal control system of the 37 Military Hospital and
4. Proffering relevant comments, opinions, suggestions and recommendations based on findings.
37 Military Hospital was constructed on 4th July 1941 as the base hospital in Accra and was the 37th General Hospital within the British Empire. It started out with 29 wards with 9 for Europeans and the rest for Africans. In 1956, the hospital was re-designated Military Hospital of the Gold Coast to serve as one of the support service providers of the Armed Forces and in 1957, following Ghana‟s independence, the Military Hospital recruited its first indigenous doctors, nurses and other paramedical staff and commissioned them to man the hospital.
Today, the 37 Military Hospital is a 400-bed general hospital with as many as 16 divisions and delivers some of the best medical care in the country and the sub region as a whole
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We subjected the accounting practices of the 37 Military Hospital to a brief study, focusing on budgeting and internal controls, and came to certain conclusions.
The hospital has a solid and excellent internal control system. But as with most accounting and management processes, there is still a little room for improvement. Suggestions to this effect are proffered in the ensuing section on recommendations.
From our interviews with some of the personnel at the 37 Military Hospital about the hospital‟s budgeting process, we observed that the underlying detail used in the development of operational budgets in the hospital seems not to be collected or is lost during consolidation. As a result, top management executives have little understanding of how line managers have arrived at their budget submissions.
We also realized that the-top level budget model does not tie back to the divisional heads‟ details. Top level finance management spends countless hours trying to reconcile the two frameworks and “forcing “one to match the other. The resulting patch creates uncertainty in the plan or forecast and a lack of ownership of hospital goals.
Managers manage the budget and not the institution. As a result, the top level management body, aware of this outcome, is reluctant to involve line managers fully in re-forecasts during the lifetime of the budget. Consequently, these forecasts do not reflect managers‟ knowledge of changing hospital conditions and may not improve ongoing budget accuracy as intended.
Another observation was with the length of the budget cycle. Too long a cycle implies that, the law of diminishing returns sets in. The never-ending, attritional nature of budgeting can seriously undermine support for, and the subsequent effectiveness and accuracy of the budgets produced.
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Recommendations to remedy these situations are made in the section below.
5.3
CONCLUSION
37 Military Hospital follows rigid and standard exemplary procedures in its internal control and budgeting activities. There however, exist certain kinks which if ironed out could enhance the effectiveness and efficiency of operations in the hospital as a whole. A few recommendations are made to this effect in the next section.
5.4
RECOMMENDATIONS
5.4.1 Internal Control
The hospital has a solid and excellent internal control system. We however have one recommendation.
The hospital should strive to achieve a top down commitment to internal control.
Even though a strong internal control system exists in the hospital, commitment to this system seems to be a bit lax, especially from lower quarters of the organizational chart. We recommend that steps be taken to ensure that everyone in the hospital, from the top to lower levels, understands and fully supports the internal control initiative.
5.4.2 Budgeting
Management should not neglect the underlying detail used in the development of operational budgets in the hospital and should pay attention to its collation. Management should also ensure that these details are included and not lost during consolidation. This
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will give top management more understanding of how line managers have arrived at their budget submissions.
Management should reconcile the top level budget model with the details provided by the divisional managers. This creates certainty in the plan or forecast and a stronger claim to ownership of the hospital‟s goals.
The top level management body should be more willing to involve line managers in re- forecasts during the lifetime of the budget. When this is done, these forecasts would reflect managers‟ knowledge of changing hospital conditions and may improve ongoing budget accuracy.
Because of the attritional nature of budgeting and the consequence of seriously undermining support for, and the subsequent effectiveness and accuracy of the budgets produced, management of the hospital should consider reviewing the length of their budget cycle.
Application of technology to budgeting
Majority of the problems encountered with budgeting is from management of the process itself. One way of alleviating many of these issues is through the use of dedicated budget management software. Such technologies can help establish a climate in which budgeting can progress from being a little more than just guesswork to becoming a much more useful and accurate accounting and management tool. Budgeting software stalls many of the problems associated with budgeting and makes the process less painful, less costly, and more effective. An example would be Hyperion Software‟s budgeting and planning solutions, including Hyperion Pillar® which is already being used by hundreds of organizations worldwide. This is however a relatively expensive solution.
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REFERENCES
37 Military Hospital Handbook
Acquah, A., 1992. Accounting: Simplified Notes.
American Health Association. 1969. Internal Control & Internal Auditing for Hospitals.
Arora, M.N., 2006. A text Book of Management Accounting. 8th Ed. India: Vikas Publishing House
Government of Ghana Budget - 2006
Government of Ghana Budget - 2007
Horgen C.T., Sunden G.L. and Stratton W.O., 2005. Introduction to Management Accounting.13th Ed. India: Prentice Hall of India Private Ltd
Howard, B.B. and Upton, W., 1989. Introduction to Business Finance. London: Sweet & Maxwell.
Krah, D.R.Y., 2007. Public Sector Accounting: Theory & Practice in Ghanaian Context.
Millichamp, A., H., 2002. Auditing. Bath: Bath Press.
Murphy, M., 1970. Management Accounting. Orlando: The Dryden Press
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Seawell, L.V., 1964. Hospital Accounting & Financial Management.
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APPENDIX A
ORGANISATIONAL CHART - ADMINISTRATION
KEY
CO – Commanding Officer A&E – Accident & Emergency Centre
2i/C – 2nd In Command R&X – Radio Diagnosis & X-Ray Division
OPD – Out Patient Department Complex RSC – Medical Reception Stations & Centers
O&G – Obstetrics & Gynaecology Division
CO
Admn Officers Matron 2I/C
A & E Health Divison Medical Division RSC OPD Dental Division Veterinary Division Paediatric Division Polyclinic Pathology Division Training School R & X Surgical Division Pharmacy Division O & G Other Support Units Adjutant RSM