THESIS ABSTRACT
The
researcher has primary examined some of the expenditure control techniques that
are and could be applied in government owned hospitals. Noting the obstacles
and their rate of effectiveness, emphasis are laid on the techniques already in
application.
Data for
the research were gathered through interviews, questionnaires and financial
regulations. Percentages were used in the data analysis. The following are the
research findings.
Budgeting,
internal control and audits are commonly used by government owned hospitals in
order to curb expenditures, cost
benefits, analysis and management audits that could be applied are not
in use.
Variance analysis is the budgeting review technique
universally applied for analyzing budgeting estimates. The effectiveness of
each of these techniques are hindered by obstacles inherent in the
implementation.
Government indicates the goals to be achieved with a
given outlay. It is therefore essential to control the expenditure to serve the
allowed purposes. Expenditure controls may be positive or negative. Expenditure
controls essentially reflect a managerial process that is both political and
administrative. The type of expenditure controls employed and their
effectiveness are dependent in the external and internal environment of the
ministry and the respective hospital.
CHAPTER ONE
1.1 BACKGROUND
OF STUDY
In all
organization, except possibly the tinnest, there is a process called
expenditure or as used in the most commercial organizations , cost control
process. Expenditure control has been defined as the process by which managers
use effectively and efficiently the scare resources of the enterprises in the
accomplishment of the organizational objectives. Most studies of the
expenditure control techniques have been done in business organizations and
most of the new control techniques applied in not – for – profit public
corporations were developed in these organizations. Most description of the
management expenditure control processes therefore tend to assume, usually
implicitly but sometimes explicitly, that the process of expenditure control is
taking place in a business enterprises.
The
research report in contrast, is a study of expenditure control in government
owned not for profit organization. Its thesis is that the basic control
concepts are the same in both profit oriented and non-profit organization but
that because of the special characteristics of non-profit organizations, the
application of the techniques developed in profit oriented organization are
subject to certain modifications before they can be effectively applied
especially to the non-profit organizations owed by the government.
Many
business persons, as well as many accountants approach not for profit
organizations expenditure control with a certain amount of trepidation because
of lack of familiarity with such accounting. There is no real reason for this
uneasiness because except for the few special characteristics, non-profit
organization expenditure control follow many of the same principles followed by
commercial enterprises. One of the special
characteristic lies in the reason for their existence. In over simplified
terms, it might be said that the ultimate objectives of a commercial
organization is to realize net profit for the stockholders. As such the
decisions made by their management are intended to increase (or at least maintain)
profits, and success is measured to a significant degree by the amount of
profit that these organization earn. Were as the ultimate objective of a
government owned non-profit organization is to meet some socially desirable
need of the community. The primary concern of the government in relation to its
not-for-profit organizations is to inquire whether resources are being used in
a manner consistent with goals of alocative efficiency and stabilization of the
economy. The role that transcends the narrow concerns of the shareholders and
arises from the government functions as a protector of the consumers interest.
Thus, the decision made by the management of these organizations are intended
to result in the best possible service within the available resources and their
success is primarily measured by how much service they render and by how well
they render it.
1.2 STATEMENT
OF STUDY
The need
for effective management of resource in government owned not-for-profit
organizations cannot be over emphasized. This is because while goal attainment
is an important index of public service efficiency, the government can no
longer pretend that the question of cost is secondary. This has necessitate in
government instructing public service organization to “count down costs†as it
embarks on its programmes. No wastage of financial resources should therefore,
be permitted.
It is
therefore essential, that expenses should not be incurred more than is just necessary. Extensive
expansion within limited supply of funds necessitates an optimum utilization of
expenditure control system designed in a manner that can allow for maximum
utilization from minimum resources. Also available financial resources can only
be managed optimally it there exist effective techniques for expenditure
control.
This
study is thus conducted in order to appraise and review some of the available
techniques for control of expenditure opened to government owned non profit
organization and its applicability to those owned by the Nigerian Government
especially hospitals.
1.3 OBJECTIVE
OF STUDY
The study
is being carried out in order to:
1.
Examine some of the
techniques for control of expenditure applied by government financed and
controlled not profit organization.
2.
Highlight the main
obstacles and limitations of each of the examined techniques.
3.
Advance some of the
techniques that may be appropriate for use in government owned hospitals.
4.
Recommend to management
team of such organization a means of improving the techniques already in use in
the hospitals.
1.4 SIGNIFICANCE
OF STUDY
It is hope
that the study will be valuable to the hospital management as it will enable
them to be aware of the several techniques available with which they can use to
control expenditure in their organization.
To the
government, the financiers the study will be a revelation because, it will
expose the obstacle and limitations of the techniques of expenditure control
being applied by the organizations which they finance. It is also believed that
if effective techniques are used in controlling expenditure, every naira spent
by the government objective of health for all by the year 200 might be reality.
For the
citizen, who pays the tax for the financiers, the study will lead, it is
believed to the justification of the taxes which they pay as they will enjoy
optimum social benefits for every naira levied on them.
Finally,
this research report will enable students of management especially accountancy
student to have an in-depth knowledge of the techniques of expenditure control
available to non-profit making organization especially those funded and
controlled by the government. For the students of Accountancy this research
project will help them to understand the audit of government organizations when
the government relinquishes such audit over to certified public accountants.
1.5 RESEARCH
QUESTIONS
The
following research questions will be used in testing the hypothesis
i.
What are the techniques of
expenditure control applied by the government owned not-profit-profit
organizations
ii.
How effective are these
techniques of control
iii.
What are the main obstacles
encountered in the techniques during it application
iv.
What other techniques can
be used.
1.6 SCOPE AND
LIMITATIONS
The
research earlier had the intention of covering all the government owned
hospitals in the Eastern states of Nigeria, however time and financial
constraints have hindered this intention. The study is limited to university of Nigeria
Teaching Hospital, Enugu and Orthopedic Hospital,
Enugu. It is
believed by the researcher that the techniques used by these hospitals closely
approximate the general practice
The accuracy and effectiveness of the
report is report in hindered by lack of earlier studies of the topic. This made
the review of related literature very difficult. The researcher had to deduce
some of the techniques applicable from interviews held with the management and
accountants of the respective hospitals.
1.7 LIST OF
ABBREVIATIONS
1.
ICMA: Institute of costs
and management Accountants
2.
UNTH: University
of Nigeria Teaching Hospital Enugu
3.
NOHE: National Orthopedic
Hospital Enugu
4.
AICPA: America Institute of
Certified Public Accountants
5.
CICA: Canadian Institute of
Chartered Accountants
6.
CIFPA: Chartered Institute of Finance and Public
1.8 DEFINITIONS
OF TERMS
1.
EXPENDITURE CONTROL: Confinements of expanses with view of avoiding
unnecessary expanses incurrence
2.
GOVERNMENT OWNED HOSPITAL:
Hospitals funded and controlled by the
government whether Federal, State or local authority.
3.
PROSTHESTISTS: Limb makers
4.
TRAUMA UNIT: Emergency ward for accident patients
5.
AUDITING STATEMENT AND
GUIDELINES: These are basic principle
and practices which members are expected to follow in the conduct of an audit.
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