ACCOUNTING PRACTICES OF HEALTHCARE INSTITUTIONS IN THE GHANAIAN PUBLIC SECTOR - A case of 37 Military Hospital

ACCOUNTING PRACTICES OF HEALTHCARE INSTITUTIONS IN THE GHANAIAN PUBLIC SECTOR A case of 37 Military Hospital

BY

ADU-KYEREMEH AKWASI

RICHARD SARPONG

EMMANUEL MENSAH

A RESEARCH WORK SUBMITTED TO THE ACCOUNTING DEPARTMENT OF THE UNIVERSITY OF GHANA BUSINESS SCHOOL, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR OF SCIENCE DEGREE IN ADMINISTRATION.

DECLARATION

We hereby declare that this work is the product of our own research we undertook in the Department of Accounting, University of Ghana Business School under the distinguished supervision of Mr. Francis K. Aboagye Otchere. References cited have been duly acknowledged. This work has never been presented in part or in whole anywhere. We are collectively responsible for any omissions, errors or mistakes that may be found in this project.

Adu-Kyeremeh Akwasi

Mensah Emmanuel

(10177191)

(10184992)

………………………...

……………………

(STUDENT)

(STUDENT)

Sarpong Richard

Mr. F.K. Aboagye Otchere

(10188078) ………………………….

……………………….

(STUDENT)

(SUPERVISOR)

i

DEDICATION

Adu-Kyeremeh Akwasi To my parents; William Adu-Ntiamoah and Paulina Asamoah

Sarpong Richard To my late grandmother; Hagar Adu and my parents; Mr. & Mrs. Sarpong

Emmanuel Mensah To my Parents; Mr. Alfred K Mensah & Madam Grace Rockson

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ACKNOWLEDGEMENT

We would first of all like to thank the Almighty God for bringing us this far. We would also like to extend our undying gratitude to our supervisor, Mr. F.K. Aboagye Otchere for his patient guidance and instruction. We also want to show our appreciation to all personnel of the 37 Military Hospital for their input towards this research, especially Staff Emmanuel Lawer (Chief Clerk, GHQ DFC), WOI Osei-Kodwo and Major C.A. Mantey (General Administration Officer).

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TABLE OF CONTENTS PAGES Declaration

i

Dedication

ii

Acknowledgement

iii

Table of contents

I

Abstract

1

CHAPTER ONE Introduction 1.1 1.2 1.3 1.4 1.5 1.6 1.7

Background Problem Statement Objectives of the Study Significance of the Study Methodology Scope & Limitations of the Study Organization of the study

3 4 5 6 6 7 8

CHAPTER TWO Literature Review 2.1 Introduction 2.1.1 Public Sector & Accounting 2.1.2 Similarities & Differences Between Public & Private Sector Accounting 2.1.3 Reasons For the Public Sector 2.1.4 The Public Health Sector in Ghana 2.2 Budgeting 2.2.1 Definition 2.2.2 Importance of Budgets 2.2.3 Hospital Budget Preparation 2.2.4 Classification of budgets 2.2.4.1 Fixed Budget 2.2.4.2 Flexible Budget 2.2.5 Essentials of Budgeting

9 10 10 11 12 13 13 14 14 16 16 16 17

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2.3 2.3.1 2.3.2 2.3.3 2.3.4

Internal Control Definition Importance & Characteristics of Internal Controls Types of Internal Controls Limitations of Internal Controls

19 19 19 20 24

CHAPTER THREE Methodology 3.1 3.2 3.3 3.3.1 3.3.2 3.4 3.5

Introduction Population of the Study Sources of Data Primary Data Secondary Data Data Analysis Techniques Limitations to the Methodology

25 25 25 25 26 26 26

CHAPTER FOUR Discussion & Analysis 4.1 4.1.1 4.1.2 4.1.3 4.1.4 4.2 4.2.1 4.2.2 4.3 4.3.1 4.3.2 4.3.3

Background Information on 37 Military Hospital General Information Brief History Command of the Hospital Roles of the Hospital Organizational structure of the Hospital Organizational Chart – Administration Organizational Chart – GHQ (DFC) Discussion & Analysis General Accounting Practices Budgeting Internal Control

27 27 28 29 29 31 32 33 34 34 35 36

CHAPTER FIVE Summary, Conclusion & Recommendations 5.1 5.2 5.3

Introduction Summary Conclusion

38 38 40

II

5.4 Recommendations 5.4.1 Internal Controls 5.4.2 Budgeting

40 40 40

REFERENCES

42

APPENDIX A Organizational Chart – Administration

44

Organizational Chart – GHQ DFC

45

APPENDIX B Research Questionnaires

46-52

III

ABSTRACT Ghana‟s public healthcare sector is an invaluable sector of the economy. The sector relies heavily on government funds for the successful achievement of its aims due to its not-for-profit orientation. The main aims and objectives of institutions in the sector revolve around the provision of preventive and curative healthcare services to the general populace with emphasis on patient or client‟s interests rather than profits. The focus thus, is on the quality of service delivered as against the quality of financial and/or accounting reports given. In view of the need for efficient and effective health service delivery to the general populace and government‟s deep concern and involvement, there is the need to ensure that budgetary allocations are managed properly. Out of this, arises the need to scrutinize the accounting practices of public healthcare institutions in the country. This research sought to identify the current state of the art as regards accounting practices in the public health sector of Ghana using the 37 Military Hospital as a hub; concentrating on budgeting and internal controls. This research is based mainly on informational data gained from the 37 Military Hospital through the administration of questionnaires and interviews with various hospital personnel. Two separate questionnaires based on the two functional accounting areas of budgeting and internal controls were administered and the responses analyzed thereof. We also made use of documents such as the Hospital Manual, Policy Statements and Reports. Considerable time was spent in assessing and understanding the internal control system and budgetary practices of 37 Military

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Hospital. We visited the site of the hospital and its general headquarters at Burma Camp and interacted with several officials who provided information relevant to this work. After extensive analysis, we observed that the hospital has a solid and excellent internal control system. But as with most accounting and management processes, there was still a little room for improvement. 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. With respect to budgeting, 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 and top level management body 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. If these incongruities are appropriately remedied, we believe that the whole budgetary process of the Hospital would be enhanced.

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CHAPTER ONE INTRODUCTION

1.1

BACKGROUND

Accounting is often said to be the language of business. It is used in the business world to describe the transactions entered into by all kinds of organizations. Accounting practices of an organization encompass all the activities, direct and indirect, involved in the performance of the function of Accounting. The public healthcare sector of Ghana is an invaluable sector of the economy. As a not-for-profit sector, it relies largely on government funds for the achievement of its aims. The activities of the health sector in Ghana are overseen by the Ministry of Health. From the 2007 budget, the objectives of the Ministry of Health are: 1. Bridging of equity gaps in access to quality healthcare and nutrition services 2. Ensuring sustainable financing arrangements that protect the poor and 3. Enhancing efficiency in service delivery.

In the 2006 budget, the government of Ghana allocated ¢100,882 million to the health sector. This figure rose to ¢5,637 billion in 2007. Under Statutory Payments in the 2007 budget, It was estimated that a total amount of ¢1,823.9 billion would be transferred into the National Health Insurance Fund from which the National Health Insurance Scheme draws its financial strength. The National Health Insurance Scheme was set up by the Ministry of Health to show government‟s commitment to improving the health of all people living in Ghana. Its aim is to

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share the cost of health care with the citizenry through various modes such as health insurance, health maintenance organization etc. Decentralization and community participation also continue to be the principles governing the management and delivery of health services under the scheme. This is in order to ensure responsiveness to local needs of the general populace. In view of the need for efficient and effective health service delivery to the general populace and government‟s deep concern and involvement, there is the need to ensure that budgetary allocations are managed properly. Out of this, arises the need to scrutinize the Accounting practices of public healthcare institutions in the country. This research sought to identify the current state of the art as regards accounting practices in the public health sector of Ghana using the 37 Military Hospital as a hub. The project lasted for one academic year at the end of which, this report on findings is being presented in the form of a long essay. The project was conducted by a team of three accounting students and a research supervisor.

1.2

PROBLEM STATEMENT

Public healthcare institutions depend on the government for the bulk of their funds in Ghana. As non-profit making institutions, their main aims & objectives revolve around the provision of preventive and curative healthcare services to the general populace. The people have a right to think that these institutions place a patient or client‟s interests above profits. And indeed as the case is, the focus is on the quality of service delivered as against the quality of financial and/or accounting reports given. This state of affairs is a source of motivation for this research into the accounting practices of public healthcare institutions in the country.

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There is the need for a serious look into the accounting practices of the public health sector especially in the midst of opinions and allegements such as that made in Transparency International‟s 2006 Global Corruption report. The report identified the Ghanaian health sector as a corruption prone area with evidence of bribery and fraud across the breadth of medical services. This, it said to have emanated from petty thievery and extortion, to massive distortions of health policy and funding, fed by payoffs to officials in the sector. Another pertinent source of motivation for this research is the gaping absence of any strongly enforced standard laid by any governing accounting body as pertains the accounting practices of health institutions in Ghana‟s public sector.

1.3

OBJECTIVES OF THE STUDY

The objectives of the study are listed below as follows: 1. To present an honest & authentic view of the general accounting practices of 37 Military Hospital. 2. To gain more insight into the budgetary process of 37 Military Hospital 3. To learn more about the internal control system of the 37 Military Hospital 4. Proffer relevant comments, opinions, suggestions and recommendations based on findings

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1.4

SIGNIFICANCE OF THE STUDY 1. This research presents a reliable and proven view of the accounting practices (Budgeting & Internal Controls) of public healthcare institutions in Ghana using the case of 37 Military Hospital. 2. The research gives parties like the government, academic institutions etc, insight into existing conditions in the public health sector as far as accounting practices (Budgeting & Internal Controls) are concerned. 3. It gives other similar organizations in the health sector, the opportunity to effect improvements through our proffered recommendations.

1.5

METHODOLOGY

The research is based mainly on informational data gained from the 37 Military Hospital. Information was obtained through the administration of questionnaires and interviews with various hospital personnel. Two separate questionnaires based on the two functional accounting areas of budgeting and internal controls were administered and the responses analyzed thereof. Extensive literature germane to the study was also reviewed. We also made use of documents such as the Hospital Manual, Policy Statements and Reports.

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1.6

SCOPE AND LIMITATIONS OF THE STUDY

As a government hospital which depends mainly on government subventions to realize its objectives, 37 Military Hospital must be viewed as a spending organization rather than a revenue generating one. Notwithstanding the fact that the hospital collects revenue on behalf of the Central Revenue Department in the area of hospital charges, the hospital has no control over the monies collected as they are immediately paid into government chest where they are accounted for. The discussion of this study is therefore limited to the procedures and controls put in place to ensure efficiency, effectiveness as well as the economical use of the resources allocated to the hospitals. The research is heavily skewed towards the Budgeting and Internal Control practices of the hospital.

Major limitations encountered during the study include: 1. The narrowing down of Accounting practices to the aspects of budgeting and internal control. 2. The classified nature and subsequent restricted access to sensitive Military information. 3. Delays in response to information requested due to Military bureaucracy and Organizational red tapeism. 4. The time frame within which the study was conducted. 5. The financial cost associated with the study.

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1.7

ORGANIZATION OF THE STUDY

The study has five constituent chapters: Chapter One: discusses government‟s involvement in the public health sector and accounting practices. This chapter also covers the problem statement, significance, scope and limitations of the study. Chapter Two: deals with the Literature Review. This is made up of a collection of varying views from different authors with respect to the nature of accounting practices in the public sector with deep emphasis on budgeting and internal control. Chapter Three: covers the methodology of the study. The definition of variables and data gathering instruments is highlighted in this chapter. Chapter Four: deals with the discussion and the analysis of the data gathered with respect to the existent accounting practices in the hospital. Chapter Five: contains the summary, conclusions and recommendations from the study.

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CHAPTER TWO LITERATURE REVIEW 2.1

INTRODUCTION

Accounting may be defined as the process of gathering, classifying, recording, summarizing and analyzing financial data and communicating financial information to persons who need such information for decision making. Acquah (1992, p.1) defines accounting as involving “the recording of business transactions and also the preparation and interpretation of certain statements for presentation to interested parties such as bankers etc.” Seawell (1964, p.34-35) also defines Hospital Accounting as the art of recording, classifying and summarizing in a significant manner and in terms of money, the financial transactions entered into by a hospital organization and interpretation of the results thereof. The term “accounting practices” therefore, can be said to embody a whole host of activities related to the performance of the function of accounting. This research however, is not concerned with the exhaustive consideration of all accounting practices. The research is geared towards the two important accounting practices of “Budgeting” and “Internal Controls” as practiced in the public health sector.

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2.1.1 Public Sector and Accounting The public sector is that part of the economy that is significantly dominated by the central government. Public sector organizations include all organizations that are not privately owned and operated. In these organizations, the individuals have no equity interest. The public sector is made up of diversely differing organizations. The diversity stems mainly from the differing objectives of these organizations. These diverse objectives lead to varying accounting practices, control procedures and management structures in public sector organizations. Krah (2007, p.8) defines public sector accounting as the application of accounting principles and concepts to government activities. Basically, it is the practice of accounting for the resources used by public sector organizations. It is concerned with ensuring value for money, through the provision of systematic records for estimating financial requirements and the measurement of the use of these financial resources to establish relative efficiency and effectiveness. 2.1.2 Similarities and Differences Between Public Sector and Private Sector Accounting There are similarities that run through accounting both in the public and private sectors. These similarities are however fewer and less varied than the differences. A potent similarity would be the common application of double entry and other such concepts in accounting for both sectors. The slight modifications in emphasis rather than substance here, is worthy of note. The system of accounting operated can be seen as one of the differences in accounting practices between the public and private sectors. The public sector operates a fund system of accounting where many separately self-balancing fund accounts exist in one organization and are treated as independent accounts. The private sector on the other hand, operates a proprietorship or entity

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system of accounting, where accounts are prepared taking a total view of the organization as a business entity. Another source of difference between public sector and private sector accounting is the accounting basis employed. The public sector employs cash basis accounting where Receipts & Payments Accounts are opened and accruals and prepayments, not recognized. The private sector on the other hand, employs accrual basis accounting. Here, prepayments and accruals are recognized. In the public sector, capital and revenue expenditure is not differentiated. All expenditure is treated as revenue and as such, there are no depreciation charges. The private sector conversely, distinguishes between capital expenditure and revenue expenditure, and charges depreciation on capital expenditure items. 2.1.3 Reasons for the public sector 1. To provide general or basic goods and services for the whole public to enable each person to enjoy a minimum standard of living, irrespective of the person‟s purchasing power or ability. 2. To ensure that inequalities in service delivery in all parts of the country are resolved. The public sector exists to ensure that, for instance, there is a basic education for those of school going age and the basic health needs of all the citizens are catered for. 3. To ensure that certain services and practices are provided in a consistent manner 4. To substitute central planning in the place of consumer choice. 5. To aid control and economic regulation in key areas. This research examines accounting practices with respect to the public health sector of Ghana.

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2.1.4 The Public Health Sector in Ghana In Ghana, the “health sector” includes government health services, private, traditional and nongovernmental providers, civil society and community groups, all working to deliver health services. Two main agencies are responsible for running the public health system: 1. The Ministry of Health (MOH) is responsible for making health policies. It provides stewardship, co-ordination and mobilization of resources, and also harnesses support from other sectors. 2. The Ghana Health Service (GHS) implements the policies by providing public health and clinical services at regional, district and sub-district levels, including management of all public health facilities at these levels. The GHS also provides tertiary services in some selected disciplines (e.g. mental health). Ghana also has a number of Teaching Hospitals (TH), which train doctors and ensure an appropriate balance between service delivery and training. The THs are also responsible for tertiary care, focusing on referred cases that need specialist attention. However, it is not always clear who is in charge of HR (Human Resource), recruitment, deployment and retention-related matters among the MOH, GHS and the TH. There are also some conflicts in capital planning and implementation of capital programmes, procurement of health logistics and the acquisition and maintenance of equipment. Finally, there are also regulatory bodies and some workers‟ associations for monitoring and enforcing ethical standards and practice of various professional and technical groups in the health sector. The Ghana Medical Association (GMA) is one such body, which also works as the

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mouthpiece of doctors and dentists in Ghana to ensure improved remunerations, providing housing schemes, secured pension and career progression for their members. There are similar associations for the nurses and other health professionals, which assist in ensuring improved remunerations and other conditions of service for their members.

2.2

BUDGETING

2.2.1 Definition A budget is a plan quantified in monetary terms, prepared and approved prior to a definite period of time, usually showing planned income to be generated and/or expenditure to be incurred during a period and the capital to be employed to attain a given objective (Oduro 2001:290). Howard and Upton (1989) also define it as “the formal presentation of the process of planning future financial requirements to achieve solvency and profitability.” A budget can thus be seen as the “plan which is prepared to show how resources would be acquired and used over a period” (Murphy 1970: 47). The whole process of preparing this plan therefore, is what is referred to as budgeting. The aim of budgeting thus is to prepare a plan which shows how resources would be acquired and used over a period.

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2.2.2 Importance of Budgets When budgets are managed wisely, it will help in managerial planning, provide definitive expectations that are the best framework for judging performance, and promote communication and coordination of various segments of the business (Horgen et al 2005). Other reasons for the proper preparation of budgets can also be outlined as follows: 

To aid the planning of annual operations



To coordinate the activities of various departments and functions of the organization



To assist in delegation of authority and assignments of responsibility



To direct capital expenditure in the most profitable direction



To provide a yardstick against which actual results can be compared



To increase production, efficiency, eliminate waste and control cost



To motivate executives to attain the given goal

(Arora 2006) 2.2.3 Hospital Budget Preparation The hospital‟s budgeting preparation should be initiated by the administration and be given full support. This is but only in very small hospitals will the administrators actually prepare a budget. The primary responsibility for the development of the budget in medium and large sized hospitals usually falls upon a budget committee headed by a budget officer, the controller or business manager. Membership on the budget committee should be given to departmental level in order to obtain a wider and diversified point of view. If the performance of the department heads is to be

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measured against the budget, it is only fair to give them some representation on the budget committee. The budget committee designs budget request forms and prepares a covering letter to all departments explaining the budget program and overall policies to be observed in the budget preparation. After the department heads submit their budget requests to the budget committee, they are reviewed by the committee and where necessary, corrections are made in consultation with department heads. Certain adjustments may be required for example, in order to reflect local economic conditions, the existence of new hospital facilities in areas and the need for interdepartmental co-ordination. The revised departments are then consolidated into a master budget covering a one-year period. The master budget which may be sub-divided into monthly or quarterly figures consists of: 

A projected statement of revenue and expense, which establishes and communicates the organization‟s operational performance



A projected balance sheet which establishes and communicates the financial objective of the hospital



A cash budget which presents a plan of cash receipt and disbursement consistent with and necessary to the attainment of performance and position objectives of the hospital



A capital expenditure budget, which reflects the plans of the hospital management for additions and improvements to hospital plant and equipment consistent with the amount of funds expected to be available (Seawell 1964)

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2.2.4 Classification of Budgets Based on level of activities or capacity utilization, budgets can be classified into two categories: fixed and flexible. 2.2.4.1 Fixed Budget According to Arora (2006, p15) a fixed budget is one which is prepared keeping in mind one level of output. He defines it as a budget “which is designed to remain unchanged irrespective of the level of activity attained.” If actual output differs from budgeted level of output, variance will arise. Fixed budget is prepared with the assumption that output and sales can be estimated with a fair degree of accuracy. This means that in those situations where sales and output cannot be accurately estimated, a fixed budget would not be appropriate. Fixed budget is simple to prepare and administer. However, if there is a deviation from target, the information on the budget would be meaningless. 2.2.4.2 Flexible Budget A flexible budget is one that is designed to change in relation to the level of activity attained. It takes into account, the difference between fixed and variance cost. It is of little use unless cost and revenue are related to the actual volume of production. It is developed with the objective of changing the budget figures to correspond with actual output obtained. Budgets of this nature are prepared where it is difficult to forecast output and sales accurately. Flexible budgets are also useful from control point of view. Actual performance of an executive is compared with what he/she should have achieved in the actual circumstance and not with what he/she should have achieved under quite a different circumstance. (Arora 2006)

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2.2.5 Essentials of Budgeting According to Arora (2006), budget can prove successful only when certain conditions and attitudes exist, absence of which will negate to a large extent, the value of a budget system in business. Such conditions and attitudes which are essential for effective budgeting are as follows: 

Support of top management: If the budget system is to be successful, it must be fully supported by every member of management and the direction and impetus must come from top management. No control can be effective unless the organization is convinced that the top management considers the system to be important



Participation by responsible Executives: Those entrusted with the performance of the budget should participate in the process of setting the budget figures. This will ensure proper implementation of budget programmes.



Reasonable goals: The budget figures should be realistic and flexible so that goals can be easily attained. Setting goals which are not realistic discourages members of the organization.



Clearly defined organizational structure: Well defined responsibility lines within the organization centers should be built



Integration with standard costing system: Where standard costing is also useful, it should be completely integrated with budgeting programmes, with respect to both budget preparation and variance analysis.



Cost of the System: The budget system employed should not cost more than it is worth.

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Others necessary conditions include: 

Continuous Budget Estimation



Adequacy of Accounting System



Constant Vigilance and



Profit Maximization

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2.3

INTERNAL CONTROL

2.3.1 Definition According to the American Health Association (1969, p1), internal control is “a plan of an organization and all the co-coordinating methods and measures adopted within a business to safeguard its assets, check the accuracy and reliability of its accounting data, promote efficiency and encourage adherence to prescribed management practice.” Millichamp (2002) defines an internal control system as “the whole system of controls, financial and otherwise, established by management in order to carry on the business of the enterprise in an orderly and efficient manner, ensure adherence to management policies, safeguard the assets and secure as far as possible, the completeness and accuracy of the records. The individual components of an internal control system are known as „controls‟ or „internal controls‟ Management must ensure that there are enough controls in place in the hospital to avoid fraud and theft. 2.3.2 Importance and characteristics of internal controls From the above definitions, internal controls can be seen as having the following characteristics and importance: 

Internal controls can be seen as single procedures or as a whole system. The whole system should be more than the sum of the parts.



They are established by management, either directly, or by means of external consultants, internal audit, or accounting personnel. External auditors may be asked to advice on the setting up of systems.

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

They are supposed to help carry on the business of the enterprise in an orderly and efficient manner.



They are meant to safeguard assets of the company.



They help check the accuracy and reliability of accounting data.



Internal controls promote efficiency and encourage adherence to prescribed management practices.



They secure as much as possible, the completeness and accuracy of the records.

2.3.3 Types of internal control A. Organization. An enterprise should: i.

Have a plan of organization which should

ii.

Define and allocate responsibilities – every function should be in the charge of a specified person who might be called the „responsible official‟. Thus the keeping of petty cash should be entrusted to a particular person who is then responsible (and hence answerable) for that function

iii.

Identify lines of reporting. In all cases, delegation of authority and responsibility should be clearly specified. An employee should always know the precise powers delegated to him, the extent of his authority and to whom he should report.

B. Segregation of duties i.

No one person should be responsible for the recording and processing of a complete transaction.

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ii.

The involvement of several people reduces the risk of intentional manipulation or accidental error and increases the element of checking of work.

iii.

Functions which for a given transaction should be separated include initiation, authorization, execution, custody and recording.

C. Physical i.

This concerns physical custody of assets and involves procedures designed to limit access to authorized personnel only.

ii.

Access can be direct, e.g. being able to enter the warehouse or indirect, that is by documentation e.g. personnel knowing the correct procedures, may be able to extract goods by doing the right paper work

iii.

These controls are especially important in the case of valuable, portable, exchangeable or desirable assets. Examples are the locking of securities (share certificates etc) in a safe with procedures for the custody and the use of the keys, use of passes to restrict access to the warehouse, use of password to restrict access to particular computer files etc.

D. Authorization and approval This is a special case of type „A‟ above. All transactions should require authorization or approval by an appropriate person. The limits to these authorities should be specified. E.gs i.

All credit sales must be approved by the credit control department

ii.

All overtime must be approved by the works manager.

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iii.

All individual office stationery purchases may be approved by the office manager up to a certain limit. Higher purchases must be approved by the chief accountant.

E. Arithmetical and accounting i.

These are the controls in the recording function which check that the transactions have been authorized, that they are all included and that they are correctly recorded and accurately processed.

ii.

Procedures include checking the arithmetical accuracy of the records, the maintenance and checking of totals, reconciliations, control accounts, trial balances, accounting for documents (sometimes known as sequence checks or continuity checks) and preview. Preview means that before an important action involving the company‟s property is taken, the person concerned should review the documentation available to see that all that has to be done has been done.

F. Personnel i.

Procedures should be designed to ensure that personnel operating a system are competent and motivated to carry out the tasks assigned to them, as the proper functioning of a system depends upon the competence and integrity of the operating personnel.

ii.

Measures include appropriate remuneration and promotion and career development

prospects,

selection

of

people

with

appropriate

personal

characteristics and training, and assignment to tasks of the right level

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G. Supervision All actions by all levels of staff should be supervised. The responsibility for supervision should be clearly laid down and communicated to the person responsible and also, to the person being supervised.

H. Management i.

These are the controls exercised by management which are outside and over and above the day-to-day routine of the system.

ii.

They include overall supervisory controls, review of management accounts, comparisons with budgets, internal audit and any other special review procedures.

I. Acknowledgement of performance Persons performing data processing operations should acknowledge their activities by means of signatures, initials, rubber stamps, etc. E.g. if invoice calculations have to be checked, the checker should initial each invoice. Acknowledgement of performance not only allows blame to be ascribed but also has a powerful psychological effect.

J. Budgeting A common technique used in business is the use of budgets, which can be defined as quantitative plans of action. Budgets having been agreed can be compared with actual turn-out and differences investigated. (Millichamp 2002: 86-89)

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2.3.4 Limitations of internal controls Internal controls are essential features of any organization that is run efficiently. However, it is important to realize that internal controls have inherent limitations which include the following: 

Internal controls tend to be directed at routine transactions. The one-off or unusual transaction tends not to be the subject of internal control.



Potential human error caused by stress of work-load, alcohol, carelessness, distraction, mistakes of judgment, cussedness and the misunderstanding of instructions.



The possibility of circumvention of controls either alone or through collusion with parties outside or inside the entity.



Changes in environment making controls inadequate



Management override of controls



Abuse of responsibility



Fraud



Etc

(Millichamp 2002)

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CHAPTER THREE METHODOLOGY 3.1

INTRODUCTION

In this chapter, we seek to provide a detailed description of the sources of data, the research area, and the methods adopted to collect and analyze data for this research.

3.2

POPULATION OF THE STUDY

In conducting this research, we spent considerable time in assessing and understanding the internal control system and budgetary practices of 37 Military Hospital. We visited the site of the hospital and its general headquarters at Burma Camp and interacted with several officials who provided information relevant to this work.

3.3

SOURCES OF DATA

Primary and secondary data were obtained for the purpose of analysis. 3.3.1 Primary Data Primary data was collected by means of questionnaires and interviews. Questionnaires were specially designed for specific officials in the hospital. The questionnaires covered the two main accounting practices of budgeting and internal control being considered by this study. They were administered to the offices of the chief clerk at the General Headquarters Defence Finance Comptroller (GHQ DFC) and to the General Headquarters Medical Division (GHQ Med). We also interacted with and interviewed both key personnel of the hospital, like the clerks and the

25

Pay Master at the Pay Office as well as some lower level personnel. The interviews enabled us to acquire first hand information as regards the general accounting practices of the hospital. 3.3.2 Secondary Data We also reviewed extensive literature on budgeting and internal controls, most of which were obtained from books in the library.

3.4

DATA ANALYSIS TECHNIQUES

We focused our analysis on the responses from our interviews of personnel at the hospital and also from the questionnaires we administered. We also made use of the hospital‟s organizational charts. The purpose of the charts used was to give a visual relationship between the various reporting lines and divisions in the hospital.

3.5

LIMITATIONS TO THE METHODOLOGY

It is worthy of note that the qualitative nature of our analysis led to certain constraints. It became increasingly challenging to make strict sweeping generalizations from the results of our direct observations and personal interviews. This is largely due to the fact that human behaviour and response to different situations and circumstances is wide and diverse. Notwithstanding this, the depth of our questionnaires and interviews enabled us to acquire reliable data which proved very beneficial to our analysis.

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CHAPTER FOUR DISCUSSION & ANALYSIS 4.1

BACKGROUND INFORMATION ON 37 MILITARY HOSPITAL

4.1.1 General Information The 37 Military Hospital is a 400-bed general hospital situated about 4 kilometers from the Accra International Airport on the main Airport-Accra-Central Road (Independence Avenue Road). It is a walking distance from the Golden Tulip hotel, a popular and modern 4-star Hotel, and located directly opposite the Army Officers Mess. The hospital is centrally located and very accessible from every direction by vehicle. In the event of air evacuation of patients, it is the most convenient health facility in the country by virtue of its proximity to Accra International Airport. There is also provision for heli landing in the hospital and patients may be delivered directly by the helicopters from any part of the country, from installations out in the ocean and from neighboring countries especially those in conflict. As a military hospital, its primary objective is to provide health care to service personnel and their families, civilian employees of the Ministry of Defence and their families and ex-service personnel, all of who are grouped as ENTITLED PERSONNEL. It is however; open to all others including the general public as NonEntitled personnel, for a fee. In addition to those roles, it serves as the government‟s emergency and disaster hospital and the United Nations LEVEL IV hospital in the West-African sub-region. It provides healthcare services to several international organizations and NGOs operating in Ghana and West Africa in general. It is a well-kept and neat facility that may be compared to any

27

facility of its kind anywhere in the world. As a military institution, it tries to marry up military traditions with those of a health delivery facility. 4.1.2 Brief History During World War II, it became operationally and logistically necessary for Britain to take over the defence and security of the West-African sub-region. The responsibility was given to the War Office with Lt Gen Giffard as the General Officer commanding the West-African region. The General established his general headquarters in the then Gold Coast. As a result of the war, there was an urgent need for Casualty Clearing Stations (CCS) and general military hospitals within the colonies to attend to the medical needs of the numerous service personnel deployed in combat in several theaters. General Giffard requested the War Office in the UK for the necessary logistics and administrative support for setting up the military hospital in the Gold Coast. The public works department was commissioned by the colonial office to construct the buildings and by 4th July 1941, became the base hospital in Accra and began operation as the 37th General Hospital within the British Empire. It had 29 wards with 9 for Europeans and the rest for Africans. Soon after the war in 1946, the size of the hospital was drastically reduced. 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. 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. They included Colonel SA Obeng, Colonel C Adjetey, Major Mercy Addo, Captain Margaret Abavana and Captain Sowah. Over the years, the hospital has grown to become the second largest medical facility in Ghana‟s capital, Accra and the third largest in the country, after Korle-Bu (Accra) and Komfo Anokye

28

(Kumasi). It continues to be popularly known as the 37 Military Hospital with its Motto as “HEALTH FIRST”. 4.1.3 Command of the Hospital Before independence and during the early years of independence, the hospital was manned mainly by British staff with the first commanding officer as Colonel MacFadden and Major King as Matron. However, following the Ghanaianization of the Ghana Armed Forces in 1961, the first indigenes to assume control of the Military Hospital were Lt Col Adjetey as Commanding Officer and Lt Col Christine Debrah as Matron. Colonel SA Obeng was the first native Ghanaian Director of Medical Services. Command has remained thereafter in the hands of competent Ghanaian Professionals to this day and the hospital continues to make strides both in infrastructural development and service delivery. 4.1.4 Roles of the Hospital The 37 Military Hospital, as the major health facility provider for the Armed Forces at its inception was military-centered in its focus. Service personnel and families therefore constituted the main clientele of its operations and its roles were well defined and directed at this target population. The roles of the hospital were: 

To promote and maintain health and prevent disease



To care for and treat those disabled by sickness or injury



To form the necessary peacetime nucleus from which the medical services could expand in emergency and war.

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These roles were later revised to include Medicare for troops and their families, senior civil servants of the Ministry of Defence, Veterans and some diplomatic Missions. These roles were yet again revised in conformity with temporary needs of the Armed Forces and the nation in general and the clientele base was expanded to cover in addition to the above, all civilian employees of the Ministry of Defence (and their families, senior government officials and their families and the general public). Currently, nearly 70% of all in-patients of the hospital belong to the Non-Entitled general public. Additionally, the hospital now serves as the government‟s Emergency Response health facility and therefore becomes the centre of action in the event of major disasters in the country such as the Accra Stadium disaster that occurred in2001. The 37 Military Hospital also serves as the United Nations Level IV Medical facility in the West Africa sub region, providing health care to UN soldiers and workers from the conflict areas in the region. Several multinational companies and NGOs operating in Ghana and other West African countries also depend on the hospital for their health care needs. In this regard, the hospital has entered into agreement with several international organizations for emergency and routine health care for their work force including both expatriate and local staff. This may be attributed to the excellent health delivery services at the hospital and the relative peace enjoyed by Ghana in the sub region where conflict is rife. It is envisaged that these requests will continue to increase and the hospital, aware of this, is putting in place adequate measures to meet the envisaged demand on it.

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4.2

ORGANISATIONAL STRUCTURE OF THE HOSPITAL

As a military institution, and for operational flexibility, technical efficiency and administrative ease, the hospital has been well structured to carry out its roles and tasks. It is therefore organized into working units and sub units-Divisions and Departments-on the basis of medical, paramedical and administrative lines, with their own heads. These subunits operate with a unified purpose and understanding solely aimed at the welfare of the patient. They operate with a Commanding Officer (CO) at the apex to deliver the best medical care in the country and the sub region as a whole. The CO is responsible to Higher Headquarters for the smooth running of the hospital. He is assisted by the second in command (2i/C), Administrative officers, the Matron, the Adjutant and the Unit Senior Warrant Officer formerly known as Regiment Sergeant Major or RSM for short. The Military Hospital, like most general hospitals, is an amalgamation of several sub-units working in unison under the control and direction of the Headquarters to deliver effective health care

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4.2.1

ORGANISATIONAL CHART - ADMINISTRATION

CO

Admn Officers

Matron

A&E

2I/C

Adjutant

RSM

Surgical

OPD

Polyclinic

Health

Dental

Pathology

Pharmacy

Divison

Division

Division

Division

Veterinary

Training

Division

School

Medical Division

RSC

Paediatric Division

Division

O&G

Other R&X

Support Units

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

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4.2.2

ORGANISATIONAL CHART - GHQ (DFC)

CDS

COS

DFC

DDFC

D

D

D

D

(Pay & Acct)

(Finance)

(Admin & Trg)

(Audit & Insp)

SFC

DD

DD

DD

DD

DD

DD

(Pay)

(Acct)

(Budget)

(Bills)

(Audit)

(Insp)

CO-FPO

2ic-FPO

KEY FPO – Forces Pay Office

SFC – Senior Financial Controller

COS – Chief of Staff

CDS – Chief of Defence Staff

D – Director

DD – Deputy Director

DDFC – Deputy Defence Finance Comptroller

DFC – Defence Finance Comptroller

CO – Commanding Officer

2IC – 2nd in Command

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4.3

DISCUSSION AND ANALYSIS

4.3.1 General Accounting Practices The 37 Military Hospital is managed by the General Head Quarters Medical division (GHQ Med) of the General Head Quarters of the Armed forces of Ghana and the GHQ Med division also operates under the General Headquarters Defence Finance Comptroller division (GHQ DFC). At the GHQ DFC, accounts are prepared monthly by the accounting department which has a staff strength of five. The present accounts manager has advanced qualifications including ICA professional certifications. Hospital transactions are executed on cash & carry basis. Books of accounts maintained include a petty cashbook, cashbook and ledgers. Every month, accounts are prepared & presented to management. The books of account are kept by a bookkeeper. Cash is disbursed monthly for the settlement of bills and other such commitments. An internal control system exists and this system of controls is evaluated once in a while. Funds for day to day running of the hospital are generated internally and incoming cash is received at the wards where official receipts are in turn, issued. All monies that are received are recorded and receipts are always issued. At the close of the day, all monies received are banked. This is done by two people. The hospital operates a petty cash system. Consideration is given to only minor expenses when setting the ceiling for imprest. This ceiling is reviewed periodically. The internal audit division is in charge of checking that money is properly appropriated after it has been disbursed.

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4.3.2 Budgeting GHQ Med is directly responsible for the preparation of the hospital budget. The various divisional heads submit their budgets to the Budget Office. The submitted budgets are then reviewed by the Budget Office to ensure conformity to organizational objectives and policies. After preparation and review, the budget is sent to General Headquarters Plan & Development (GHQ P&D). The budget covers the aggregate revenue & expenditure of all divisions of the hospital. The divisions of the hospital are: 

Accident & Emergency Centre



Out Patient Department Complex



Polyclinic



Surgical Division



Radio Diagnosis & X-Ray Division



Medical Division



Obstetrics & Gynaecology Division



Paediatric Division



Health Division



Dental Division



Pathology Division



Pharmacy Division



Medical Reception Stations & Centers



Training School

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

Veterinary Division



Other Support Units

The various heads of divisions actively participate in the preparation of the budget. The heads are offered staff training with respect to budget preparation to enhance efficiency and effectiveness. Some of the areas covered by the budget include: 

Purchase of drugs for the appropriate Pharmacy Division



Supply of x-ray forms & laboratory agents and regents



Maintenance of equipment



Payment of hospital Cleaners etc

The drawn and approved budget becomes operative within the first quarter of the year. In instances where actual expenditure is at variance with budget figures, management sources for funds from the Ministry of Finance. Efforts are nonetheless made to ensure that expenses & revenues are within the sample of the budget. Measures put in place to ensure this include keeping administrative expenses to the minimum and prioritizing expenditure among others. The budget is regularly adjusted to meet current happenings as there always happens to be a shortfall.

4.3.3 Internal Control In the area of internal controls, the hospital has a control environment that sets the tone at the top, from directors to officers. One aspect of the hospital‟s control environment is its written code of conduct. Other aspects are less tangible but still very important. Examples include the time and attention directors devote to reviewing annual risk assessments; reviewing the adequacy

36

of the hospital‟s policies, procedures and controls; meeting with internal and external auditors and evaluating the results of the annual audit. With respect to risk assessment, the hospital sets its strategic objectives, making sure that strategic objectives at the functional and decentralized units are consistent and aligned with those of the hospital as a whole. The second step is the identification of the risks to achieving (or not achieving these objectives). In the next phase, the hospital estimates the significance of each risk, as well as the likelihood of it occurring, and then establishes appropriate controls to manage the risk. The hospital also carries out very strict control activities. Examples include ensuring that a purchase order has been approved by a supervisor prior to making purchases, verifying that goods have been received prior to payment, reconciling statements on a periodic basis, properly segregating duties over and tracking the custody and use of assets. Communication of high quality information within the hospital is also a priority. Communication tools range from as informal as one-to-one conversations and as formal as policy manuals. The last component of the hospital‟s internal control system is the establishment of effective monitoring controls. One example of a monitoring control in the hospital is the review of a report that compares budget-to-actual unrestricted and restricted revenue as well as expense activity of the hospital over a given period.

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CHAPER FIVE SUMMARY, CONCLUSION & RECOMMENDATIONS 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

38

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

40

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 reforecasts 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

Oduro, E., 2001. Principles of Costing. Accra: Ter-ror Pubications

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Seawell, L.V., 1964. Hospital Accounting & Financial Management.

Transparency International Global Corruption Report - 2006.

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APPENDIX A ORGANISATIONAL CHART - ADMINISTRATION

CO

Admn Officers

Matron

2I/C

Adjutant

RSM

Surgical

A&E

OPD

Polyclinic

Health

Dental

Pathology

Pharmacy

Divison

Division

Division

Division

Veterinary

Training

Division

School

Medical Division

RSC

Paediatric Division

Division

O&G

Other R&X

Support Units

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

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ORGANISATIONAL CHART - GHQ (DFC)

CDS

COS

DFC

DDFC

D

D

D

D

(Pay & Acct)

(Finance)

(Admin & Trg)

(Audit & Insp)

SFC

DD

DD

DD

DD

DD

DD

(Pay)

(Acct)

(Budget)

(Bills)

(Audit)

(Insp)

CO-FPO

2i/C-FPO

KEY FPO – Forces Pay Office

SFC – Senior Financial Controller

COS – Chief of Staff

CDS – Chief of Defence Staff

D – Director

DD – Deputy Director

DDFC – Deputy Defence Finance Comptroller

DFC – Defence Finance Comptroller

CO – Commanding Officer

2i/C – 2nd in Command

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APPENDIX B RESEARCH QUESTIONNAIRES

UNIVERSITY OF GHANA BUSINESS SCHOOL TOPIC: ACCOUNTING PRACTICES OF HEALTH CARE INSTITUTIONS IN THE PUBLIC SECTOR: A Case of 37 Military Hospital GROUP MEMBERS: 10177191, 10188078, 10184992 1. How often do you prepare accounts in a year? _____________________________________ 2. Which of the following departments do you find yourself?  Stores  Budget  Cash  If other, specify ______________________ 3. What is the strength of staff in the accounting department?

_____________________________________

4. How do you record financial data in the hospital?  Use of accounting software  Books kept by a book keeper  If other, please specify ______________________ 5. What is the qualification of your accounts manager?  High school certificate or equivalent  HND or equivalent  First degree  Masters degree  Professional certificate  If other, please specify _______________________ 6. What system of payment do you execute with your transactions?  Cash & carry  Credit

46

 

Electronic payment system If other, please specify_________________________

7. What length of credit do you offer? _________________________________________________ 8. What different books are maintained by the accounting staff?  Petty cashbook  Cashbook  Ledgers  If other, please specify______________________________ 9. How often is cash disbursed for settling of bills and other commitments?  Daily  Weekly  Bi-Weekly  Monthly  If other, please specify________________________________ 10. How long does it take for a transaction to be executed?  Very long time  Long time  Short time  Very short time 11. How often is evaluation of internal controls made?  Very frequently  Frequently  Once in a while  If other, please specify____________________________________ 12. How does your organization generate funds?  Internally generated funds  From the government  Partly from government & partly generated internally  External sources  If other, please specify____________________________________

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13. Are accounts presented to management?  Yes  No 14. From 13 above, if yes, how often are accounts presented to management?  Biannually  Annually  If other, please specify___________________________________________ 15. From 13 above, if no, why? ______________________________________________________________________ ______________________________________________________________________

16. Does the hospital have an organizational chart?  Yes  No  Not certain 17. Where and how is incoming cash received? ____________________________________________________________________________ ____________________________________________________________________________ 18. Do the cash receipts include large amounts of currency other than cheques and banker’s drafts?  Yes  No  Not certain 19. Are all monies received recorded?  Yes  No 20. If no, what happens to such cash receipts? ______________________________________________________________________________ ______________________________________________________________________________

48

21. Are receipts issued for cash receipts?  Yes  No 22. If no, what happens? ______________________________________________________________________________ ______________________________________________________________________________

23. What happens to monies received, at the close of the day?  Saved in the cash till  Banked  If other, please specify ______________________________________________________ 24. If banked, how many people do the banking?  Two  Four  If other, please specify ______________________________________________________ 25. If saved in the cash till, how many people have access to the cash till? _____________________________________________ 26. How often money is the cash till checked?  Daily  Weekly  Monthly  If other, please specify ______________________________________________________ 27. Do you operate a petty cash system?  Yes  No 28. If yes, how do you set the ceiling for the imprest? _____________________________________________________________________________ _____________________________________________________________________________

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29. How is money checked after it is disbursed? _____________________________________________________________________________ _____________________________________________________________________________ 30. Do you have stores?  Yes  No 31. If yes, how do you issue stores?  FIFO  LIFO  If other, please specify ______________________________________________________ 32. How often do you check stores?  Daily  Weekly  Monthly  If other, please specify ______________________________________________________

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UNIVERSITY OF GHANA BUSINESS SCHOOL TOPIC: ACCOUNTING PRACTICES OF HEALTH CARE INSTITUTIONS IN THE PUBLIC SECTOR: A Case of 37 Military Hospital GROUP MEMBERS: 10177191, 10188078, 10184992 BUDGET QUESTIONNAIRE 1. Who is responsible for the preparation of the budget? _______________________________________________

2. What body is the budget submitted to? ___________________________________________________ 3. Does the budget cover the aggregate revenue & expenditure of all departments in the Hospital?  Yes  No  Not certain 4. Do the heads of the various departments participate in the preparation of budget?  Yes  No  Not certain 5. If yes, are they offered any special training?  Yes  No  Not certain 6. In brief, what advantages accrue to the hospital for the usage of budget? ______________________________________________________________________________ ______________________________________________________________________________

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7. When does the budget drawn become operative? _____________________________________________________________________ 8. What does management do when actual expenditure is at variance with budget figures? ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ 9. What efforts are made to ensure that expenses & revenues are within the sample of the budget? ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ 10. Is the budget adjusted to meet current happenings?   

Yes No Not certain

11. If yes, how do you adjust it to meet current happenings? ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________

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