ABSTRACT
The study aims to assess the financial management practices
of Ghana Health Service. The specific objectives were to evaluate the effect of
budgeting on healthcare delivery, to identify the effect of financial
accountability on healthcare delivery and also determine the effect of
financial controls on healthcare delivery. The study adopted the survey design.
A sample size of 69 out of the population of 223 staff in Akim Oda Government
Hospital was used. The instrument used for data collection was a self-administered
questionnaire. The statistical technique used to analyse the objective was
regression technique. The study found that budgets are consistent with the
dictates of the accounting and financial management principles in Oda
Government Hospital. The study also observed that financial accountability is
fairly high in the Oda Government Hospital. The study indicated that overall,
financial control is high in the financial management practice of the hospital.
It is however recommended that the management of the Oda Government Hospital
draws up a plan to monitor the work progress and performance of all staff of
the hospital and reduce the period for evaluation to half of the present
period. The Hospital management should draw up a plan to review their financial
management practices from time to time to meet international standards and
also, management of the Oda Government Hospital should work to maintain and
improve their financial control in order to meet the strength of the budgetary
practices and financial accountability.
CHAPTER ONE
INTRODUCTION
Background to the Study
Managing the finances of any health care business nowadays is
like driving a car with foggy windows. The industry has been changing in big
ways since the advent of modern technology and other innovative means of health
delivery. To ensure smooth running of the health care facilities, all the
various sectors which collectively make up the healthcare facility should be
proactive in the execution of their duties. Some of these areas include the
pharmacy, Out Patients Department (OPD), stock inventory, various wards,
theatres etc. However, for these sectors to operate smoothly there must be a
sound administrative and management system in place. One of the most important
management sectors is effective financial management practices.
Financial management practices are widely seen as having an
important part to play in the efforts of low- and middle-income countries to
improve the welfare of their populations. Many countries have expressed a
commitment to strengthening their financial management systems in several
high-level international initiatives and declarations (Appiah, Amos, Bashiru,
& Tuffour, 2017). Moreover, development partners of these developing
countries are paying increasing attention to these countries financial
management performance when making decisions about committing development
assistance. This means that effective and efficient financial management
practices do not only lead to strengthening the healthcare activities in developing
countries but also provides an enabling environment for developing partners to
provide the needed help and assistance.
According to Arnaboldi, Lapsley and Steccolini (2015),
financial management involves handling routine financial operations, such as
negotiating contracts, making cash available for expenses such as payroll, and
maintaining a cash cushion for unexpected costs. From works of Byarugaba,
Karyeija & Twinomuhwezi (2014), earliest studies conducted on financial
management systems regarded them as cybernetic and formal systems, focusing on
the use of financial and accounting information systems, fundamentally through
cost accounting and budgets. However, modern studies have enriched this concept
with different contributions which centres on analysing the influence of
psychosocial and cultural aspects as key variables in the control of
organisations.
It is evident that proper financial management practice is an
anchor to quality health care delivery. For example, health care providers,
such as large physician practices and hospitals, may decide to offer expanded
tests or treatments by buying new medical equipment. Helping to make the
decision and finding the best way to pay for it are both part of financial
management (Gitman, Juchau & Flanagan, 2015). As indicated by McKinney
(2015), financial management practices within the health service should consist
of the procedures, established by law or regulation, for management of public
monies through the budget process, which includes formulation, execution,
reporting, and analysis, financial accountability and financial controls.
Moreover, it should include management of revenues as well as expenditures in the various
hospitals. The application of these sound financial management practices has
the potential to enhance health care delivery, save lives and improve the
general well-being of those who visit the health facility (McKinney, 2015).
Furthermore, proper adherence of best financial management practices and
establishment of regularized policies in the health service could drastically
reduce the inefficiencies in the health delivery and reduce the huge debt and
cost that the government incur every year, hence protecting the public purse.
Borrowing from McKinney (2015), the present study
operationalises financial management from three constructs, namely: budgeting,
financial accountability and financial controls, and assess it within the
framework of healthcare delivery in Oda Government Hospital. Budgeting may be
defined as annual planned revenue to be collected including grants and all
other revenue sources and planned expenses from such revenues in accordance
with their objectives, needs and priorities (Byrugaba, Karyei &
Twinomuhwezi, 2014). In this study, budgeting is operationalized to mean the
process by which Oda Government Hospital estimates its revenues from various
sources and planned expenditures while ensuring that the hospital continue to
operate within the planned operations in achieving quality healthcare delivery.
Financial accountability in this study means ensuring that
monies of Oda Government Hospital are used in a responsible and productive
manner giving room for verification of regularity and legality of financial
transactions for the purpose of enhancing quality healthcare delivery. In this
study, financial controls are tools that management of Oda Government Hospital use to
satisfy track financial management progress, evaluate financial results, and
report the extent to which such practices have met the quality healthcare
delivery objective of the hospital.
Healthcare delivery is defined by World Health Organisation
(WHO) as combination of health inputs so as to deliver series of interventions
and health actions to meet the basic health needs of the people. In this study,
health service delivery is defined as tangible and intangible goods and
services offered so as to meet the fundamental quality healthcare needs and
wants. Oda Government Hospital is worth this evaluation as it is one of the
oldest hospitals in Ghana. It was established in 1927 and one of the four hospitals
with physiotherapy equipment in Eastern region (Elective Ghana, 2018). It
serves over 243 communities and over 300 patients in a day. These make its
healthcare delivery quite sensitive and therefore weaknesses in operation
arising from poor financial management practices could create alarming danger.
Moreover, it has currently been upgraded from district hospital to municipal
hospital. This could also make its financial management system more complex. It
is against these and trend in the literature that this study focuses on Oda
Government Hospital.
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