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Finance Training for Budget Holders 2011/12

Finance Training for Budget Holders 2011/12. Programme. Introduction Budget Management Procurement Break Payments Counter Fraud Close. Purpose of Budgeting (1). PLANNING Involves managers in planning future activities in detail AID COMMUNICATION

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Finance Training for Budget Holders 2011/12

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  1. Finance Training for Budget Holders 2011/12

  2. Programme Introduction Budget Management Procurement Break Payments Counter Fraud Close

  3. Purpose of Budgeting (1) • PLANNING • Involves managers in planning future activities in detail • AID COMMUNICATION • Senior management briefing front-line management and staff.

  4. Purpose of Budgeting (2) • CO-ORDINATION • Levels of support services provided • Senior management can get an overview • Goal congruence, dysfunctional behaviour • MOTIVATION • Challenge • Encourage continual innovation and improvement

  5. Purpose of Budgeting (3) • ASSESSING PERFORMANCE • Can be useful to assess performance in financial aspects of a manager’s role • CONTROL • Differences require explanation and understanding • Management by exception, concentrate on the significant deviations

  6. Budget Reporting • Summary Report • Cost Centre Report • Nominal Roll • Timeliness • Review and Feedback

  7. Budget Reports (1) • Comparison of budget v actual income & expenditure • Data from various sources: Payroll system Sales Ledger Purchase Ledger Cashiers Supplies Accruals

  8. Budget Reports (2) The budget report contains :- • Annual Pay, Non pay & Income budget and budgeted WTE • Year to date budget • Actual expenditure for the year to date • Variances relating to the year to date • Last Months Variance • Monthly actual expenditure

  9. Pay Costs - makeup Pay Salaries Overtime Enhancements Bank & Agency costs Employers on costs:- National Insurance Superannuation

  10. Accruals and Prepayments • Manual adjustments for items not generated from source accounting systems • Examples: • Income not yet invoiced for services provided • Invoices presented but not yet paid • Advanced payments BUT Requires budget holders to work closely with Finance colleagues to ensure completeness

  11. Finance codes (1) The finance code is a 12 digit code made up as follows: First four characters are the Cost Centre Second four Characters are the Subjective Code Third four characters are the Analysis Code Cost centre code is unique to individual budget Subjective code is universal across Trust Analysis code is universal across Trust

  12. Finance codes (2) The Cost Centre code should not be shared It is imperative that the correct Subjective code is used related to the goods or service The Analysis code gives the opportunity to analyse budgets further e.g. Non Recurrent budgets, CIPs, Recharges Above all it is important that the correct code is used

  13. Improving Efficiency Requirement for the Trust to deliver ongoing recurrent efficiencies to address:- • Negative Growth • Internal Cost Pressures e.g. incremental drift and Drugs pressures • Support future Developments • Strengthen financial viability

  14. Possible Areas for Payroll Savings Skill Mix Review shift patterns (remove overlap, overtime payments) Consider alternatives to current practices Request and act on suggestions from staff Embrace Lean methodology Reduce time lost to sickness and absenteeism

  15. Possible areas for Non Pay Savings Record Commitments Stock Bulk purchases Minimise the use of goods and services Make good use of assets Improving income generation

  16. Budget Holder Issues • Budget setting for new financial year • Identification of savings • Savings targets (Cost Improvement Programme) • Costing of new developments • Identification of cost pressures (eg technology advances, clinical practice, incremental drift) • Forecasting year end positions • Recovery plans

  17. Accessing Reports (1)

  18. Accessing Reports (2)

  19. Accessing Reports (3)

  20. Budget Exercise (1)

  21. Budget Exercise (2) • 1. What is the total annual budget expenditure • 2. Which is the single largest category of expenditure • 3. Which of the variances do you believe needs further investigation • 4. What actions would you take to address any overspends

  22. Standards in Business

  23. Code of Business Conduct • A revised Code of Business Conduct for Trust Staff was approved by the Trust Board 29 October 2009. It is intended to make staff aware of the Trust’s expectations of their business conduct and behaviour. • Guidance is provided for dealing with: • Gifts – no more than £25 (as item or combination of items) • Hospitality – treated same as gifts in terms of benefit received • Declaration of Interests – when and how to do this (especially for contracts) • Maintaining Confidentiality • Commercial sponsorship for commercial courses and conferences • Outside employment - guidance • Private Practice – what is expected • Relationships with Pharmaceutical Industry and other commercial interests • Guidance on dealing with fraud Flowcharts to assist declaration decisions, and useful guidance, and forms to complete are provided – and who to contact if not sure!

  24. Complete a ‘Registration of Offers of Gifts, Hospitality & Sponsorship Form’, (Appendix A of Code), including whether the offer was accepted or declined Submit form to Line Manager Form to be reviewed and signed by Line Manager, and a copy retained in employee’s personal file Local Register Holder to receive and record onto Local Register. (Local Register will then be sent quarterly to Chief Executive’s Office.) Process for Registering Offers of Gifts, Hospitality and Sponsorship

  25. Standing Orders and Standing Financial Instructions • Revised Standing Orders and Standing Financial Instructions were approved by the Trust Board 26 November 2009. They replace the previous version approved by the Trust Board in October 2007. • The two documents together are the Trust’s financial governance framework for all those involved in financial decision making and with powers of expenditure. • The documents are intended to provide a pragmatic, flexible, robust and transparent set of rules for discharging of our public funds for the benefits of patients and carers. Key changes for October 2009 were: • Accuracy amendments eg changes of job titles • Reflecting changes to any policy updates referenced • Improved clarity for Trust Board reserved powers eg approval levels for special payments, business planning • Reflecting governance developments eg wider remit of Audit committee • Revised budget expenditure limits and authorities for spend

  26. Scheme of Delegation • The Trust Scheme of Delegation is a detailed list of what the board can decide on who the board empowers to take actions or make decisions, examples include:- • Approving of Standing Orders • Approving Budgets • Approving business cases for capital investment • Receiving and approving annual reports & accounts • Specific delegated powers to budget holders include – • No overspend or reduction in income is incurred within the prior consent of the Board • Approved budget is not used for anything else than that specified • No permanent employees are appointed other than those provided for in available resources and within establishment

  27. Charitable Funds The Trust has a number of Charitable funds hosted by Leicestershire County & Rutland PCT. These funds can be used to supply benefits to patients and staff if the criteria and authorisation procedures are followed correctly. For more information contact your Service Manager or Andy Morrell (who runs the funds on LPT’s account) on tel. no. 0116 295 7569 or E-mail andy.morrell@lcrpct.nhs.uk

  28. Future Awareness

  29. LPT Finances: The Future • Continue to deliver financial targets whilst improving / delivering the 2012 vision and beyond • Long Term Financial Model (LTFM) shows – EBITDA / Cash / Capex • Economic forecasts show negative income uplifts from Commissioners from 2011/12 • Delivery of efficiency underpins entire financial strategy • Requirement to earn additional new business • Impact of merger with Community services

  30. Our Future Plans (LPT incl CHS) Key metrics, LTFM version 15.1 (draft) – initial StHA plan position

  31. Service Line Reporting (1) SLR Implementation: • Attribute all income to the operational ‘Service Lines’, • Allocate all costs to the ‘Service Lines’, • Agree a method to apportion the overhead costs across the Service Lines, • Develop a reporting structure whereby the service reports feed into the relevant business units

  32. Service Line Reporting (2) Benefits of SLR • Greater understanding of Service performance • Ability to target development funds • Greater autonomy for the Services • Identification of poor performing Services • Additional information for the Management teams / Trust Board

  33. Contact Details • For management accounts queries please contact your relevant finance manager or alternatively my details are:- • Ian Ferrin, Head of Business Unit Finance (Adult lead) • Tel. 0116 246 3579 • e-mail: ian.ferrin@leicspart.nhs,uk

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