Professional Documents
Culture Documents
8. Financial Resource Management-sept2018
8. Financial Resource Management-sept2018
Department of Pharmacy
Kenya Medical Training College
September 2018 class
Learning Objectives
Main objective
• To provide the learner with knowledge on
financial resource management in Health care
Systems
Learning Objectives
Specific objectives
i. Describe the role of parliament
ii. Describe the role of treasury
iii. Describe the role of controller and auditor
general
iv. Discuss the sources of health care financing
v. Discuss financial accounting systems,
mechanisms and accounting documents.
HEALTH CARE FINANCING DEFINITION
Health care financing refers to the “function of a
health system concerned with the accumulation,
mobilization and allocation of money to cover the
health needs of the people, individually and
collectively, in the health system… the purpose of
health care financing is to make funding available, as
well as to set the right financial incentives to
providers, to ensure that all individuals have access to
effective public health and personal health care”
• A good health financing system raises
adequate funds for health, in ways that ensure
people can use needed services, and are
protected from financial catastrophe or
impoverishment associated with having to pay
for them. It provides incentives for providers
and users to be efficient
HEALTH FINANCING IN DETAIL
• It encompasses resource mobilization allocation
and distribution at all levels/ national to local
including how providers are paid.
• Refers to methods used to mobilize the resources
that support basic public health programs, provide
access to basic health services.
6
Financial Management
• Financial management entails planning,
organising, controlling and monitoring
the financial resources of an organisation
to achieve objectives.
Financial Management
Financial management in the public sector is
governed by:
• The Public Financial Management Act. The
objective of this Act is to ensure that public
finances are managed both at the national level
and the county level in accordance with the
constitution of Kenya.
• Government financial regulations and procedures.
This contains financial regulations and procedures
that govern government finances.
Principles of Financial Management
Viability
To be financially viable, a health facility’s
expenditure must be kept in balance with
incoming funds, both at the operational
and the strategic levels. Viability is a
measure of financial continuity and
security.
Principles of Financial Management
Integrity
On a personal level, individuals must operate
with honesty and propriety. The integrity of
financial records and reports is dependent on
accuracy and completeness of financial records.
Principles of Financial Management
Financing Systems
External financing
Internal financing User For-profit Medical Social
“Aid”
payments or savings contributions
Non-profit voluntary employers
private or compulsory employees
Social insurance insurance
Unified Fragmented
System System
Health Care Financing Sources
• Government of Kenya budgetary
allocation- In the financial year 2020/21,
the allocation was Kshs152 billion which
was approximately 4.9% of the total
government budget. These allocations
were made to the Ministry of Health.
Health Care Financing Sources
• Appropriation in aid (AIA) - This includes
grants and loans from development partners.
The main development partners in health care
in Kenya include the German Federal
Government (KFW) and the African
Development Bank (ADF) among others. AIA
also includes user charges collections made in
the various public health centres in the
country.
Health Care Financing Sources
• National Health Insurance Fund (statutory
insurance) - This is a fund for formally employed
individuals and those in the informal sector.
Formal sector employees' contributions are
deducted and remitted to the Fund by their
employers. For members, under the voluntary
category, they pay Kshs.500 per month
(Kshs.6000 per annum). For those in formal
employment, contributions are made as per their
income.
Health Care Financing Sources
• Private Insurance- This is a fund contributed
by corporates and individuals for various
insurance products to the health sector.
Sources of finances for the government
• Ordinary revenue: which represents
the amount of money raised in a
given period through taxes such as
income tax, import duty corporation
tax, stamp duties, Value Added Tax
(VAT) and excise duties.
Sources of finances for the government
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Principles of a good budget
• Predictability: which means that the
budget should be predictable within a
medium term horizon.
Principles of a good budget
• Transparency: which means that the
budget should be prepared and
presented openly and information
should be available on a timely basis.
• Periodicity: which means that that
the budget should cover a specific
period of time.
Principles of a good budget
• Contestability: means that economic
actors compete fairly for resources and
can challenge or question the
Government on any of the items in the
budget, or on any of its priorities
Stages in The Budget Process
• Many Kenyans perceive the national budget
process as a one time event marked by the
budget speech, delivered by the Cabinet
Secretary of Finance, in the month of June
every year.
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Contd…..
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Types of budgets
• Depending on the organization, an annual
budget could operate according to the
financial year (e.g. 1st July 2000 – 30th June
2001) or the calendar year (e.g. 1st January
2000 - 31 December 2000).
contd...
Operational Budget
• An operational budget can also be called an
organizational budget.
• This type of budget highlights the income
earned and expenditure that is incurred by an
organization.
• Operational budgets may be broken into
areas/ departments so that these
areas/departments have their own budget
allocation to operate within.
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contd...
Program Budget
• A program budget highlights the income and
expenditure that is incurred for the
development and implementation of a specific
program.
TAKE HOME ASSIGNMENTS
• REFERENCE
• Fundamentals of Health Care Financial Management by Steven Berger
2007, 3rd Edition
• The constitution of Kenya 2010
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QUESTIONS????
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