MANAGE REVENUE AND EXPENDITURES Financial Management
Item
- Title
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MANAGE REVENUE AND
EXPENDITURES
Financial Management - extracted text
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Training for Health Committees and Health Staff at Health Unit Level
MANAGE REVENUE AND
EXPENDITURES
Financial Management
2
PARTICIPANT GUIDE
unicef
Training for Health Committees and Health Staff at Health Unit Level
MANAGE REVENUE AND
EXPENDITURES
Financial Management
2
PARTICIPANT GUIDE
unicef
Copyright © 1996
United Nations Children’s Fund
3 UN Plaza
New York, NY 10017
USA
The purpose of this training course is to improve the management of resources at health unit level
and to build the capacity of health committee members and health staff to work with communities.
The training course was developed by Dr Kasa Pangu and Dr Helene Gaumerais of the Health
Systems Development Unit with the technical collaboration of the Center For Effective Performance
(Atlanta, Georgia) and with the inputs from all the Unit’s programme staff. The Health Systems
Development Unit wishes to express its gratitude to the colleagues from other sections who gave
comments on the draft.
The design and content of the training course benefited greatly from the work undertaken by
participants from panel review meetings held in New York, including E. Alihonou, M. Bah, G.
Bukenya, B. Criel, K. Drame, J. Eshuis, H. Gorgen, M. Kader Konde, H. M. Kahssay, R.
Knippenberg, B. McPake, L. Mpande, K. Mukelabai, M. Murro, V. Oketcho-Oketh, I. Rizzo and A.
B. Touray.
The designations employed in this publication do not imply on the part of UNICEF the expression
of any opinion whatsoever concerning the legal status of any country or territory. Furthermore, the
training modules are intended to be practical tools for adaptation to country local situation and as
such have not been edited to the official publication standards of UNICEF, nor do they necessarily
reflect the policies or views of UNICEF.
All correspondence should be addressed to :
Dr Kasa Pangu
Senior Advisor
Health Section, TA-24A
UNICEF
3 UN Plaza
New York, NY 10017, USA
Phone:
Facsimile:
Internet:
TIA-WO
^6
212-824-6339
212-824-6462
kpangu @ unicef.org
V
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Financial Management: Manage Revenue and Expenditures
Participant Guide
FINANCIAL MANAGEMENT: MANAGE REVENUE AND
EXPENDITURES
Introduction ..............................................
Overview of Revenue and Expenditures
4
5
Activity 1 - Manage Revenue .................................................................
Introduction to Activity 1...................................................................
Overview of Managing Revenue.......................................................
Step 1 - Collect Money and Issue Receipts......................................
Step 2 - Record Debtors and Exemptions ........................................
Practice Exercise for Issuing a Receipt and
Recording Exemptions and Debtors ..........................................
Step 3 - Keep Money at the Bank and at the Health Unit ................
Step 4 - Record in the Cash and Bank Book Money Deposited
in the Bank and Money Received in Hand........................................
Practice Exercise for Recording Money Received in Hand
and Bank Deposits in the Cash and Bank Book..........................
Step 5 - Verify Bank Statements and Bank Book ............................
Practice Exercise for Verifying Bank Statements and Bank Book
Step 6 - Make Sure that Money Recorded in
Health Unit Registers Equals the Amount of Money in
Receipt, Debtors, and Exemptions Books........................................
Performance Check 1.........................................................................
.7
.7
.8
.8
12
Activity 2 - Manage Expenditures..............................................
Introduction to Activity 2......................................................
Approval of Expenditures ....................................................
Overview of How to Manage Expenditures..........................
Step 1 - Determine if Money is Available for a
Purchase or Expenditure ......................................................
Practice Exercise for Determining if Money is Available
Using a Budget Item Expenditure Form ........................
Step 2 - Record Expenditures in the Cash and Bank Book . .
Practice Exercise for Recording Expenditures in the
Cash and Bank Book................................................
Step 3 - Record Expenditures on the Budget Item
Expenditure Form .................................................................
Practice Exercise for Completing the Budget Item
Expenditure Form ...........................................................
16
20
22
26
28
31
33
36
42
42
42
43
46
48
49
51
53
54
(continued)
2
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 4 - Write a Cheque......................................
Practice Exercise for Writing a Cheque........
Step 5 - Make a Requisition For Large Purchases
Practice Exercise for Making a Requisition ..
Performance Check 2..........................................
Performance Check 3..........................................
55
56
57
60
61
67
Activity 3 - Prepare a Financial Report.......... i..............
Introduction to Activity 3..........................................
Prepare Budgeted versus Actual Expenditures Report
Practice Exercise for Preparing Budgeted versus
Actual Expenditures Report................................
Performance Check 4.............................. J
73
73
73
3
77
84
o
Financial Management: Manage Revenue and Expenditures
Participant Guide
FINANCIAL MANAGEMENT:
MANAGE REVENUE AND EXPENDITURES
Introduction
Regular and proper financial management is essential in
health units.
The health staff and health committee must work
together to effectively manage revenue and expenditures.
A health unit that manages revenue and expenditures
successfully does not run out of money and keeps to its
budget.
Proper financial management of health unit money
ensures accountability to the community.
In this module, you will learn how to manage revenue
and expenditures.
In the first activity, you will learn how to manage
revenue using the cash and bank book and receipts.
In the second activity, you will learn how to manage
expenditures using Budget Item Expenditure Forms,
requisitions, and cheques.
In the third activity, you will learn how to prepare and
use a financial report.
4
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
Overview of Revenue and Expenditures
Participant Notes
Revenue is:
money received from patients
money received from donors or the
government
• Revenue is money coming in. It is also referred to
as credit on many financial management forms, such
as the cash and bank book.
Expenditures are:
expenses
payments
examples;
drugs
supplies
incentive payments (allowances)
• Expenditure is money going out It is also referred
to as debit on many financial management forms,
such as the cash and bank book.
• It is important to manage revenue and expenditures:
to make sure money is available for high-priority
purchases, such as drugs and supplies
(continued)
5
Financial Management: Manage Revenue and Expenditures
Participant Guide
to make sure the health unit does not run out of
money
Participant Notes
so that the health unit knows how much money
it is spending on certain items
so that the health unit can determine how much
money it has at any given time
to make sure the health unit follows the
approved budget
6
Financial Management: Manage Revenue and Expenditures
Participant Guide
ACTIVITY 1 - MANAGE REVENUE
Introduction to Activity 1
• Managing revenue is a process.
Managing Revenue
Collect
money
Record
money
Keep money
at health unit
or in the bank
Verify health unit
and bank
financial records
• It is important to properly manage revenue:
to make sure money is not lost, misplaced, unaccounted for, or
stolen
to make sure money is available for high priority purchases, such
as the resupply of drugs
7
Financial Management: Manage Revenue and Expenditures
Participant Guide
Overview of Managing Revenue
Participant Notes
• There are six steps to managing revenue:
Main Steps in Managing Revenue
1. Collect money and issue receipts.
2. Record exemptions and debtors.
3. Keep money at the bank and at the
health unit.
4. Record in the cash and bank book
money deposited in the bank and money
received in hand.
5. Verify bank statements and bank book.
6. Make sure that money recorded in
health unit registers equals the amount
of money in receipt, debtors, and
exemptions books.
Step 1 - Collect Money and Issue
Receipts
• A receipt is a formal record of the transfer of money
from one person to another.
• Receipts confirm that money has been paid for a
service or a product.
• Receipts confirm the amount of money that was paid
for a service or product.
• Receipts are used during audits to make sure
financial records are accurate.
(continued)
8
Financial Management: Manage Revenue and Expenditures
Participant Guide
• The cashier issues a receipt to patients when they pay
for a service such as consultation, delivery,
laboratory etc.
• The Treasurer issues a receipt to the health staff
when he collects money from the health unit.
Receipts
Issue a receipt whenever you receive or
collect money.
Obtain a receipt whenever you pay
money.
• Make sure there is a receipt book at each place
money is received or collected at your health unit
• The Treasurer should have a separate receipt book.
• Whenever the Treasurer collects money from the
health unit, he or she should issue the health unit
a receipt.
• Issue a receipt for the amount of money collected.
• Write on the receipt:
a description of what the money is collected for
the total amount of money paid by the patient in
figures and in words
the date on which you issue the receipt
(continued)
9
Participant Notes
Participant Guide
Financial Management: Manage Revenue and Expenditures
Receipt No. 0702
Participant Notes
District:.
URD
Health Unit:.
Name:.
For:
Bamali
Mary Ruwasha
chlorhexidine, bandage, TT vaccination
Amount:.
$1,50
One dollar and fifty cents
Date:.
Dollars
13 April 96
Signed: Omar Dibba
Mary Ruwasha
• If a patient pays for drugs and supplies, write the
name, strength, and quantity issued for each
purchased drug and supply item on the receipt.
• The person receiving the money should sign the
receipt.
• The person giving the money may sometimes also
sign the receipt.
• It is important to indicate on the receipt the quantity
of money received and what the money was received
for:
to keep an accurate record of revenue
to keep an accurate record of purchased drugs
and supplies
(continued)
io
Financial Management: Manage Revenue and Expenditures
Participant Guide
• Information on the receipts is used to complete the
cash and bank book.
• Receipts are also used to verify other health unit
records, such as the drug register, patient register,
and debtors book.
• The person receiving the money should sign the
receipt:
to ensure accountability
to identify who issued the receipt if there is a
discrepancy or error
• If you make a mistake when you write a receipt,
cancel the receipt and issue another receipt.
Make sure you leave the incorrect receipt in the
receipt book.
• Keep a copy of each receipt issued.
• At the end of the day, you will use copies of the
receipts to:
Record revenue in the cash and bank book.
Identify discrepancies between the drug
register, the patient register, and the receipts.
11
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 2 - Record Debtors and
Exemptions
Participant Notes
• Patients who are unable to pay are either debtors or
exempt patients.
• Patients who have to repay the health unit are
debtors.
• Patients who are exempt do not have to repay the
health unit.
• To make sure that your health unit does not lose
track of patients who owe money, record debtors in
a debtors book.
Refer to the sample debtors book on the following
page. Create your own debtors book to fit local
procedures.
12
Financial Management: Manage Revenue and Expenditures
Participant Guide
DEBTORS BOOK
Name of District:
Name of responsible person:.
Bamali
Name of Health Unit:.
URD
Sabqli
Month:
April
Year:
1996
Serial
No.
Date
Patient Name
Service Provided
Amount
Paid
Receipt
No.
Amount
Due
1
3/4/96
Ekombe Mongwa
drugs
$1.00
0678
$2.50
2
3/4/96
Myriam Embale
drugs
$0.50
0681
$1.25
3
7/4/96 Beatrice Dibba
prenatal care fee
$2.00
0686
$8.00
4
10/4/96 Solomon Saboya
lab fee
5
11/4/96 Euza Dombe
consultation
6
7
8
9
10
11
13
$2.50
$1.00
0693
$1.00
Debt
Recovery
$1.25 pd
10/4/96
^0689
Financial Management: Manage Revenue and Expenditures
Participant Guide
• Patients who are exempt are relieved from paying
for health services.
Participant Notes
• Record exempted patients in an exemptions book.
Refer to the sample exemptions book on the
following page. Create your own exemptions book
to fit local procedures.
• Keep a record of exempt patients to monitor the cost
of the exemption system.
14
Financial Management: Manage Revenue and Expenditures
Participant Guide
EXEMPTIONS BOOK
Name of District:
Name of responsible person:.
Serial
No.
Date
Bamqli
Name of Health Unit:.
URD
Sabali
Patient Name
Month:
April
Service Provided
Year:
1996
Reason for
Exemption
Amount of
Exemption
1
3/4/96 Sophie Lokela
60 Folic acid tablets, 5 mg
chronic
disease
$1.20
2
10/4/96 Amane Ngwoto
consultation
prisoner
$2.00
3
4
5
6
7
8
9
10
11
75
Participant Guide
Financial Management: Manage Revenue and Expenditures
Practice Exercise for Issuing a Receipt and Recording Exemptions
and Debtors
Complete a receipt for the following case scenarios. Record exemptions and debtors on the
appropriate forms on page 19, as necessary.
1. On 21 March 1996, Micala Womba paid $1.50 for 15 packets of oral rehydration salts.
Receipt No. 0709
District:
Health Unit:.
Name:.
For:
Amount:
Dolla
Date:.
Signed:
(continued)
16
Financial Management: Manage Revenue and Expenditures
Participant Guide
2. John Mwabe paid $2 for a consultation on 10 March 1996.
Receipt No. 1102
District:.
Health Unit:.
Name:.
For:
Amount:.
Dol
Date:
Signed:.
3. On 15 March 1996, Amina Traore received 15 tablets of Amoxycillin 250 mg and 18
Paracetamol 100 mg tablets for her baby's ear infection. The drugs cost $2.00, but Amina
could only pay $1.00.
Receipt No. 1119
District:.
Health Unit:
Name:.
For:.
Amount:
Dol
Date:.
Signed:.
(continued)
17
Financial Management: Manage Revenue and Expenditures
Participant Guide
4. On 15 March 1996, Sekou Sangare was exempt from paying $1.00 for 40 Aluminum
hydroxide 500 mg tablets. He is a prisoner.
Receipt No. 3112
District:.
Health Unit:.
Name:.
For:.
Amount:.
Dolla
Date:.
Signed:.
(continued)
18
Financial Management: Manage Revenue and Expenditures
Participant Guide
DEBTORS BOOK
Name of Health Unit:.
Name of District:
Name of responsible person:.
Serial
No.
Date
Patient Name
Year: 1996
Month:
Service Provided
Amount
Paid
Receipt
No.
Amount
Due
Debt
Recovery
1
2
3
EXEMPTIONS BOOK
Name of Health Unit:.
Name of District:
Name of responsible person:.
Serial
No.
Date
Patient Name
Month:
Service Provided
1
2
3
The facilitator will review this exercise during training.
19
Year: 1996
Reason for
Exemption
Amount of
Exemption
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 3 - Keep Money at the Bank and at
the Health Unit
• Your health unit may collect money from patients on
a daily basis.
• Your health unit might keep most of the money it
collects:
in a bank savings account
in a credit union
at a post office
• It is not wise to keep large amounts of money at the
health unit because of the possibility of theft.
• The health staff and health committee should decide
when and how often to deposit money in the bank.
• It may be convenient to deposit money once or twice
a week. Or, you may decide to deposit money when
the health unit has collected a certain amount.
(continued)
20
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
•
To deposit money in the bank, complete a deposit slip.
Standard Bank
Notes
$95.00
Coins
$5.00
Cash
Date:.
21 March 96
Account No..
Total in words One hundred dollars
Paid in by.
$100.00
Subtotal Cash
018475456
Cheques
Subtotal Cheques
Omar Dibba
CASHIER cashier's signature and
stamp
TOTAL DEPOSIT
$100.00
•
After verifying the amount of money being deposited, the bank
cashier will sign and stamp your deposit slip.
•
If your bank uses a bank book, the cashier will update your bank book
to reflect the deposit.
BANK BOOK
District
URD
Health Unit
Date
Description
No.
7/3/96
Withdrawal
W34
18/3/96
Deposit
DOS
19/3/96
Withdrawal
W97
21/3/96
Deposit
D15
Bamali
In
Out
Balance
$25
$1,075
$1,125
$50
$75
$100
$1,050
$1,150
•
Keep a certain amount of money at the health unit for emergency
expenditures.
•
Identify the amount of money that you can safely keep at the health
unit.
•
Identify where you can safely and securely store money in your health
unit.
(continued)
21
Financial Management: Manage Revenue and Expenditures
Participant Guide
• Money should be securely stored in a safe or lock
box.
• Withdraw money for other expenditures from the
health unit's bank account.
Step 4 - Record in the Cash and Bank
Book Money Deposited in the Bank and
Money Received in Hand
This module assumes that the health committee
keeps the cash and bank book.
• Use a cash and bank book to:
Keep track of your revenue and expenditures.
Record money received in hand during the day.
Record amount of money deposited in the bank.
• At the end of the day, add up the receipts and record
the total amount of cash received in hand, in the cash
and bank book.
• Whenever you receive cash in hand, issue a receipt.
• At the end of the day, calculate the total revenue for
each receipt book separately.
• For example, add up all drug receipts and write the
total in the cash and bank book. Then add up all
OPD consultation receipts and record that total as a
separate entry in the cash and bank book.
The following steps for recording cash in hand are
the same whether the cash is receivedfrom patients
for services or if the cash is received by the
Treasurer from the health unit.
(continued)
22
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
Refer to the sample cash and bank book on page 24,
as needed.
Participant Notes
• To record money received in hand during the day
or receipts from each receipt book:
1. Collect all copies of receipts issued during the
day.
2. Write the date of the entry in the Date column.
3. Describe the entry in the Description column.
Include the numbers of the receipts issued. For
example, 0702-0713.
4. Write the budget category code in the Budget
Category column. For example, write "D" for
money received from drug sales. Write "U" for
money collected for user fees.
5. Add up the total amount of money collected
during the day from the copies of receipts.
6. Count the money that was received in hand.
7. Make sure that the amount of money received in
hand equals the quantity on the receipts.
8. Write the total quantity of money collected in
Credit column of the Cash section of the cash
and bank book.
9. Add the amount in the Credit column to the
amount in the Balance column of the previous
entry in the Cash section. Write the total in the
current entry's Balance column.
10. Add the amounts in the Bank Balance and Cash
Balance columns. Write the sum in the Total
Balance column.
11. Store the money in the health unit safe until it
can be deposited in the bank.
23
Financial Management: Manage Revenue and Expenditures
Participant Guide
CASH AND BANK BOOK
Name of District:
Name of responsible person:.
Ref
no.
Date
Bamgli
Name of Health Unit:.
URD
Month:
Sabali
Description Budget
(transaction) Category
Year:.
March
Cash
Bank
Debit
(out)
Credit
(in)
1/3/96 Balance
brought
forward
1996
Balance
Debit
(out)
Credit
(in)
Balance
Total
Balance
1,500
400
1,900
001
3/3/96 Payment of
drugs
chq 0009
D
400
1,100
400
1,500
002
7/3/96 Purchase of
office
supplies
O
25
1,075
400
1,475
003
15/3/96 OPD
consultation
receipts
291-316
U
450
1,525
004
18/3/96 Bank deposit
400
1,525
005
19/3/96 Purchase of
cleaning
supplies
400
1,450
006
21/3/96 Bank deposit
300
lf450
007
25/3/96 Drug receipts
126-144
345
1,495
1,125
50
O
50
1,075
50
1,050
75
1,150
100
1,150
D
Totals
Balance carried
forward
24
100
45
Financial Management: Manage Revenue and Expenditures
Participant Guide
• To record money deposited in the bank:
1. Write the date of the deposit in the Date column.
2. Describe the entry in the Description column.
3. Write the amount of money deposited in the
bank in the Credit column of the Bank section.
4. Add the amount in the Credit column to the
amount in the Balance column of the previous
entry in the Bank section. Write the total in the
current entry's Balance column.
5. Write the amount of money deposited in the
bank in the Debit column of the Cash section.
6. Subtract the amount in the Debit column from
the Balance column of the previous entry in the
Cash section. Write the total in the current
entry's Balance column.
7. Add the amounts in the Bank Balance and Cash
Balance columns. Write the sum in the Total
Balance column.
• The Total Balance should be the same as in the
previous entry. There is no loss or gain because
money is being moved from one location to
another.
25
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
Practice Exercise for Recording Money Received in Hand and Bank
Deposits in the Cash and Bank Book
Complete the cash and bank book for each case scenario:
1. On 25 April 1996, the Treasurer deposited $100 in the bank from the cash box.
2. On 29 April 1996, the Treasurer collected $15 in cash from the health unit for lab fee receipts
0500-0507.
3. Add the amount of money collected from the receipts listed below and write the total in the
cash and bank book.
Drugs Receipts for 30 April 1996
Receipt
Number
Name and Quantity of Item Issued and Fee
Collected
0711
20 tablets of acetyl salicylic acid, 300 mg"$0.40
0712
30 tablets of folic acid, 5 mg - $0.60
0713
40 tablets of aluminum hydroxide 500 mg--$1.00
0714
20 tablets of cotrimoxazole — $1.00
0715
20 tablets of acetyl salicylic acid, 300 mg—$0.40
0716
30 tablets of folic acid, 5 mg - $0.60
The facilitator will review this exercise during training.
26
Financial Management: Manage Revenue and Expenditures
Participant Guide
CASH AND BANK BOOK
Name of District:
Name of responsible person:.
Ref
no.
Date
Bamali
Name of Health Unit:.
URD
Sabqli
Description Budget
(transaction) Category
Month:
Year:.
April
Cash
Bank
Debit
(out)
Credit
(in)
1/4/96 Balance
brought
forward
Balance
2,940.00
300.00
3,240.00
311.50
3,251.50
305.50
3,245.50
312.60
3,252.60
002
7/4/96 Delivery fee
receipts
0291-0300
U
2,940.00
003
8/4/96 Purchase of
office
supplies
O
2,940.00
004 21/4/96 OPD
consultation
receipts
0801-0802
U
2,940.00
007
Totals
Balance carried
forward
27
Balance
$3,300.00
D
006
Credit
(in)
300.00
3/4/96 Payment of
drugs
chq 0009
005
Debit
(out)
Total
Balance
3,000.00
001
60.00
1996
11.50
6.00
7.10
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 5 - Verify Bank Statements and Bank Book
• The bank provides you with a bank book for each account.
• The bank book is completed by the bank, not by the health unit.
BANK BOOK
District
Health Unit
URD
Date
Description
No.
7/3/96
Withdrawal
W34
18/3/96
Deposit
DOS
19/3/96
Withdrawal
W97
21/3/96
Deposit
D15
Bamali
In
Out
Balance
$25
$1,075
$1,125
$50
$75
$100
$1,050
$1,150
• Each time you deposit or withdraw money, the bank either gives you
a receipt or updates your bank book.
(continued)
28
Participant Guide
Financial Management: Manage Revenue and Expenditures
• At the end of the month, the bank should send you a statement of your
transactions.
ACCOUNT STATEMENT
Statement Date: April 8, 1996
Standard Bank
Commerce Street
Tokama, URD
Mr. Sabali Mbwoto
Bamali Health Committee
Bamali, URD
Summary for Account No. 23954-1294-82
Beginning Balance
Total Deposits
Interest This Period
Total Withdrawals
Service Charges
Ending Balance
$1,100.00
150.00
100.00
$1,150.00
Description of Account Transactions
Transaction
Date
Amount
Balance
$1,100.00
Beginning
Balance
1/3/96
Withdrawal
7/3/96
$25.00
$1,075.00
Deposit
18/3/96
$50.00
$1,125.00
Withdrawal
19/3/96
$75.00
$1,050.00
Deposit
21/3/96
$100.00
$1,150.00
• Make sure that the bank statement, bank book, and your cash and
bank book match.
• Verify your bank statement:
to make sure that all money is accounted for
to identify and resolve and discrepancies
(continued)
29
Financial Management: Manage Revenue and Expenditures
Participant Guide
• To verify your bank statement:
Participant Notes
1. Verify all bank deposits:
a. Total all bank deposits for the month in your
cash and bank book.
b. Total all deposits recorded for the month by
the bank cashier in your bank book.
c. Find the total amount of bank deposits on
your bank statement. Compare the amount
with the totals from the bank book and the
cash and bank book.
Identify any
discrepancies.
2. Verify all bank withdrawals:
a. Total all bank withdrawals for the month in
your cash and bank book.
b. Total all withdrawals recorded for the month
by the bank cashier in your bank book.
c. Find the total amount of bank withdrawals
on your bank statement. Compare the
amount with the totals from the bank book
and the cash and bank book. Identify any
discrepancies.
30
Financial Management: Manage Revenue and Expenditures
Participant Guide
Practice Exercise for Verifying Bank Statements and Bank Book
Verify the sample bank statement and bank book using the information below.
Answer the following questions:
A
1. Are there any discrepancies between the cash and bank book, the bank book, and the bank
statement?
2. How would you resolve the discrepancy?
April 1996 Bank Deposit Entries and Withdrawals
Recorded in the Cash and Bank Book
Withdrawals
Deposits
9/4/96
$80
2/4/96
$130
18/4/96
$120
30/4/96
$100
26/4/96
$80
BANK BOOK
District
URD
Health Unit
Bamali
In
Out
Balance
$75
$1,050
Date
Description
No.
19/3/96
Withdrawal
W97
21/3/96
Deposit
D15
2/4/96
Withdrawal
Wil
9/4/96
Deposit
D28
$80
$1,100
18/4/96
Deposit
D42
$120
$1,220
26/4/96
Deposit
D71
$80
$1,300
30/4/96
Withdrawal
W37
$1,150
$100
$130
$100
$1,020
$1,200
(continued)
31
Financial Management: Manage Revenue and Expenditures
Participant Guide
ACCOUNT STATEMENT
Statement Date: May 8, 1996
Mr. Sabali Mbwoto
Bamali Health Committee
Bamali, URD
Standard Bank
Commerce Street
Tokama, URD
Summary for Account No. 23954-1294-82
Beginning Balance
Total Deposits
Interest This Period
Total Withdrawals 230.00
Service Charges
Ending Balance
$1,150.00
260.00
$1,180.00
Description of Account Transactions
Transaction
Beginning
Balance
Withdrawal
Deposit
Deposit
Deposit
Withdrawal
Date
Amount
$1,150.00
1/4/96
2/4/96
9/4/96
18/4/96
26/4/96
30/4/96
Balance
$130.00
$80.00
$100.00
$80.00
$100.00
$1,020.00
$1,100.00
$1,200.00
$1,280.00
$1,180.00
The facilitator will review this exercise during training.
> -fl
01^62.
32
—
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 6 - Make Sure that Money
Recorded in Patient Registers Matches
the Amount of Money in Receipt,
Debtors, and Exemptions Books
This step assumes that the cash and bank book is
being used at the health unit to record revenue
collected directly from patients.
• At the end of the day, compare the health unit
registers, receipt books, exemptions book, and
debtors book to make sure records match.
• Compare the health unit registers to the receipt
books, exemptions book, and debtors book:
to make sure all money is accounted for
to make sure records are accurate
to identify and resolve any discrepancies or
errors
to make sure patients are paying the correct
amount
to make sure the correct amount of money is
recorded in the cash and bank book
This activity assumes that the health unit keeps
separate receipt books for different services, such as
consultations, prescriptions, and lab fees.
• The health staff record in the appropriate health unit
register the health service that each patient receives.
• For example, if a patient has a consultation, the
health staff record the price of the consultation in the
patient register.
(continued)
33
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
• When a patient pays for the health service, the health
staff issue a receipt from the appropriate receipt
book.
• If a patient is unable to pay the full fee or is exempt,
the health staff complete either the debtors or
exemptions book, as appropriate.
• The amount of money recorded in each health unit
register should equal the amount of money recorded
in the appropriate receipt book, debtors book, and
exemptions book.
Equation for Comparing Health Unit
Records to Make Sure All Money Is
Accounted For
Amount of money in Patient Register =
Amount of money in Appropriate Receipt
Book + Debtors Book 4- Exemptions Book
Example:
Five patients have consultations. Each consultation
costs $1. One patient is exempt and another pays
only half the fee. The cost ofproviding the service to
all five patients is recorded in the patient register.
The entries in the health unit records are as follows:
Patient Register = $5.00
Receipt Book = $3.50
Debtors Book = $0.50
Exemption Book - $1.00
Use the equation to compare the health unit records
and to make sure all money is accounted for:
Amount of money in Patient Register =
Amount of money in Appropriate Receipt Book
+ Debtors Book + Exemption Book
$5.00 = $3.50 + $0.50 + $1.00
(continued)
34
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
How to Compare the Amount of Money Recorded in Patient
Register(s) and Receipt, Debtors, and Exemptions Books
1. Refer to the day's entries in the patient register.
2. For each entry:
a. Refer to the column in the register which contains the amount of money the
patient was charged for the health service.
b. Locate the corresponding receipt in the appropriate receipt book.
c. Compare the amount of money recorded in the register and on the receipt.
d. If the amount of money on the receipt equals the amount of money in the
register, repeat steps a. - d. until all entries for the day are checked.
If the amount of money on the receipt does not equal the amount of money
in the register, check the debtors book.
If there is no corresponding receipt for an entry, check the exemptions book.
Find the reason for the discrepancy. Then continue checking the rest of the
entries in the patient register.
• If you find discrepancies, identify possible causes, such as:
recording errors
mathematical errors
debtors and exemptions recorded incorrectly
deferred payment
35
Financial Management: Manage Revenue and Expenditures
Participant Guide
ACTIVITY 1 - MANAGE REVENUE
PERFORMANCE CHECK 1
STOP
Do not begin the Performance Check until the facilitator has given you the instructions!
You will work individually to complete the Performance Check. Use the following sample forms
to complete the Performance Check:
receipts
debtors book
exemptions book
cash and bank book
deposit slips
1. Read the case scenario below. Complete receipts for money received and record information in
the debtors and exemptions books, as appropriate.
On 5 June 1996, Mongone Acheje paid $2 for 50 tablets of cotrimoxazole 400 mg + 80 mg.
On 6 June 1996, Alia Serote came in for some lab tests. She had only $1 to pay the $4 fee,
but promised to return with her rest of the money at the end of the week.
On 8 June 1996, Mary Mbwaje had her first prenatal care examination. The health unit
charges a flat fee of $8 for prenatal care services. Because Mary is very poor, the health
committee and community agreed that she is exempt from paying health services.
You are the Treasurer. On 10 June 1996, the health unit nurse, Sala Marika, gave you $75.50
collected from consultation receipts 0767-0780. Write a receipt for the money you received
from the health unit nurse.
2. You are unable to go to the bank on 10 June 1996 to deposit the money you received from the
health unit nurse. You keep the money in your safe box. Update the cash and bank book.
(continued)
36
Financial Management: Manage Revenue and Expenditures
Participant Guide
3. Add the following receipts and record the revenue in the cash and bank book on page 42.
Drugs Receipts for 11 June 1996
Receipt
Number
Name and Quantity of Item Issued and Fee Collected
0571
20 tablets of nalidixic acid, 500 mg
$1.00
0572
30 packets of oral rehydration salts
$3.00
0573
90 tablets of folic acid, 5 mg
$1.80
0574
25 tablets of acetyl salicylic acid, 300 mg
$0.50
0575
40 tablets of acetyl salicylic acid, 300 mg
$0.80
0576
2 tablets of mebendazole, 500 mg
$0.25
0577
30 tablets of folic acid, 5 mg
$0.60
0578
40 tablets of aluminum hydroxide, 500 mg $1.00
4. Read the case scenario below and complete the appropriate forms.
You want to deposit the $75.50 you received from the health unit nurse in the bank on 15
June 1996. You will deposit $70 in notes and $5.50 in coins. Complete a deposit slip.
Record the $75.50 you deposited in the bank on 15 June 1996 in the cash and bank book.
(continued)
37
Financial Management: Manage Revenue and Expenditures
Participant Guide
5. Use the information below to make sure that money recorded in the patient register equals the
amount of money in the receipt, debtors and exemptions books.
Ten patients have consultations. Each consultation costs $1. Two patients are exempt, one
patient will pay the fee at the end of the week, and another pays only half the fee. The entries
in the health unit records are as follows:
Patient Register = $10.00
Receipt Book = $6.50
Debtors Book = $ 1.00
Exemptions Book = $2.00
Answer the following questions:
a. Does the amount of money recorded in the patient register equal the amount of money in the
receipt, debtors and exemptions books?
b. If the records do not match, where is the discrepancy?
6. Use the following information to verify the bank statement and bank book. Identify any
discrepancies. Describe how you would resolve the discrepancy.
May 1996 Bank Deposit Entries and Withdrawals
Recorded in the Cash and Bank Book
Withdrawals
Deposits
9/5/96
$50
2/5/96
$100
18/5/96
$100
30/5/96
$150
26/5/96
$150
(continued)
38
Financial Management: Manage Revenue and Expenditures
Participant Guide
BANK BOOK
District
URD
Health Unit
Bamali
Balance
Out
Date
Description
No.
In
29/4/96
Deposit
D15
$100
2/5/96
Withdrawal
Wil
9/5/96
Deposit
D28
$50
$1,100
18/5/96
Deposit
D42
$100
$1,200
26/5/96
Deposit
D71
$150
$1,350
30/5/96
Withdrawal
W37
$1,150
$1,050
$100
$1,200
$150
ACCOUNT STATEMENT
Statement Date: June 8, 1996
Mr. Sabali Mbwoto
Bamali Health Committee
Bamali, URD
Standard Bank
Commerce Street
Tokama, URD
Summary for Account No. 23954-1294-82
Beginning Balance
Total Deposits
Interest This Period
Total Withdrawals 200.00
Service Charges
Ending Balance
$1,150.00
250.00
$1,200.00
Description of Account Transactions
Transaction
Beginning
Balance
Withdrawal
Deposit
Deposit
Deposit
Withdrawal
Date
Amount
$1,150.00
1/5/96
2/5/96
9/5/96
18/5/96
26/5/96
30/5/96
Balance
$100.00
$50.00
$100.00
$100.00
$100.00
$1,050.00
$1,100.00
$1,200.00
$1,300.00
$1,200.00
7. Let a facilitator know when you have completed the Performance Check.
39
Financial Management: Manage Revenue and Expenditures
Participant Guide
CASH AND BANK BOOK
Name of District:
URD
Sabali
Month:
Description Budget
(transaction) Category
Bank
Name of responsible person:.
Ref
no.
Date
Bamqli
Name of Health Unit:.
Debit
(out)
Credit
(in)
June
Year:.
J996
Cash
Balance
Debit
(out)
Credit
(in)
2,500.00
1/6/96
Balance
brought
forward
001
3/6/96
Drug
receipts
0555-0570
D
002
7/6/96
Purchase of
office
supplies
O
2,500.00
2,481.50
18.50
003
004
005
006
007
Totals
Balance carried forward
40
25.00
Balance
Total
Balance
150.00
2,650.00
175.00
2,675.00
175.00
2,656.50
Participant Guide
Financial Management: Manage Revenue and Expenditures
PLENARY DISCUSSION 1
While you are waiting for the plenary discussion, think about the following
questions:
How soon after you receive money should you update the cash and bank
book?
What benefits are there to issuing receipts from different receipt books?
What information does it provide?
What benefits are there to keeping a record of exemptions? What
information does it provide?
What would you do if you discover that the bank made a mistake in
updating your bank book after a deposit?
What can you do to improve how your health unit and health committee
manage revenue?
41
Financial Management: Manage Revenue and Expenditures
Participant Guide
ACTIVITY 2 - MANAGE EXPENDITURES
Introduction to Activity 2
•
It is important to properly manage expenditures:
to make sure that the health unit does not spend
more money than it has
to make sure that the health unit keeps to its
budget
to make sure the health unit does not run out of
money
Approval of Expenditures
•
Your health unit may decide that some expenditures
need to be approved.
•
The persons authorized to approve expenditures
may include:
Chairperson of the health committee
Treasurer
Health unit head
•
Obtain approval for large purchases:
to prevent one person from making large
purchases without consulting other health
committee members
to make sure other health committee members
agree that the purchase is reasonable and
necessary
to make sure that the purchase is consistent with
the health unit's budget and activities
42
Participant Notes
Participant Guide
Financial Management: Manage Revenue and Expenditures
Overview of How to Manage Expenditures
•
Use the following forms to manage expenditures:
cash and bank book
budget
cheques
requisition forms
Main Steps in Managing
Expenditures
1.
Determine if money is available for a
purchase or expenditure.
2.
Record expenditures in the cash and
bank book.
3.
Record expenditures in the Budget Item
Expenditure Form.
4.
Write a cheque.
5.
Make a requisition for large purchases.
Before you learn how to complete these steps, you
will learn what a budget is and how you can use it to
manage expenditures.
•
A budget is a financial plan for revenue and
expenditures for a given period.
•
A budget is a tool for coordinating revenues and
expenditures to meet workplan objectives.
(continued)
43
Participant Notes >
Financial Management: Manage Revenue and Expenditures
Participant Guide
•
A budget helps the health unit effectively manage
revenue and expenditures.
Participant Notes
•
The budget enables the health unit and health
committee to plan how it will spend its money.
•
A budget helps the health unit and health committee
make sure that money is available for the most
important expenses, such as drugs and supply
purchases.
Refer to the sample budget on the following page.
•
Use a budget:
to monitor expenses and make sure the health
unit does not spend more money than it has
to approve purchases and other expenses
•
Use the budget regularly to approve expenses and
ensure that the expenses do not exceed the amount
budgeted.
44
Participant Guide
Financial Management: Manage Revenue and Expenditures
BUDGET FORM
Health Unit:.
Bamali
District:
Budget for the Period: 01 / January / 96
To:
URD
30 I June / 96
1) Total Amount to be Budgeted
Cash and Bank Book
$5.900
Date 75 December 1995
Expected Revenue
$5,900
Total
$295
2) Reserve funds
3) High priority costs
3.1
Essential Drugs/Supplies (D)
3.2
Information Tools (I)
3.3
Fuel for cold-chain and sterilization (F)
3.4
Fuel for outreach activities (FO)
3.5
Workplan activities
3.5.1
3.5.2
3.5.3
Storage of drugs
$120
3.6
Electricity (E)
$20
3.7
Water (W)
$10
3.8
Salaries (S)
$1,320
Total high priority costs
4) Low priority costs
4.1
Workplan activities
4.1.1 Outreach
4.2
Allowances (A)
4.3
Office supplies (O)
4.4
Vehicle maintenance (V)
4.5
Cleaning supplies (C)
4.6
Building maintenance (M)
4.7
Furniture (FU)
4.8
Replacement cost (RC)
4.9
Miscellaneous (MS)
$20
$875
Total Low priority costs
5) Total high plus low priority costs
Signature
Signature
Committee Chairperson
Health Unit Head
Conchetta
Panala
Date Budget Approved: 18/ Jan 196
Signature
Committee Treasurer
Mkqmwe
45
Signature
District Medical Officer
Taluli
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 1 - Determine if Money is Available
for a Purchase or Expenditure
Participant Notes
• Before you spend money, make sure money is
available.
• Look at the current balance in the cash and bank
book, if available.
• Check the cash and bank book balance to make sure
there is money either in the bank or on hand to pay
for the expenditure.
• Do not spend more money than was budgeted.
• Use the Budget Item Expenditure Form to determine
if money is available for a given purchase or
expense.
• The Budget Item Expenditure Form relates to the
allocation of funds within the budget.
Budget Item Expenditure Form
$30
Category:
Vehicle maintenance (V) Amount Budgeted:
Date
Description
Amount
Spent
Total Amount
Spent to Date
Balance
2 Feb 96
oil change
$10
$10
$20
10 March 96
spark plugs
$3
$13
$17
• The Budget Item Expenditure Form is known in some countries as the
vote book.
• The purpose of the Budget Item Expenditure Form is to make sure the
health unit does not exceed the amount budgeted for each category of
expenditures.
(continued)
46
V.
Participant Guide
Financial Management: Manage Revenue and Expenditures
• Each item on the budget has its own Budget Item
Expenditure Form.
• Check the amount in the Balance column of the
Budget Item Expenditure Form to determine if funds
are available for a purchase.
Refer to the sample form on the previous page.
$17 is available for vehicle maintenance expenses.
47
Participant Notes \
Financial Management: Manage Revenue and Expenditures
Participant Guide
Practice Exercise for Determining if Money is Available Using a
Budget Item Expenditure Form
Read the case scenarios and use the sample Budget Item Expenditure Forms to determine if
funds are available for the expenditure.
Assume that you have looked in the cash and bank book and found that money is available. Now
you need to check the Budget Item Expenditure Form to determine if money is available for that
particular expenditure budget category.
1. The cashier requests $5 to purchase a notepad and some erasers. Is money available? How
much money can you give the cashier?
Budget Item Expenditure Form
Category:
Office supplies (0)
Amount Budgeted:
$20
Date
Description
Amount
Spent
Total Amount
Spent to Date
Balance
15 Feb 96
pens, paper
$5
$5
$15
30 March 96 pencils, paper
$7
$12
$8
2. The pharmacist requests $15 to replace a broken chair. Is money available? How much
money can you give the pharmacist?
Budget Item Expenditure Form
Category:
Amount Budgeted:
Furniture (FU)
$25
Date
Description
Amount
Spent
Total Amount
Spent to Date
Balance
15 Jan 96
stool for
delivery room
$9
$9
$16
17 March 96
small
consultation
$12
$21
$4
table
The facilitator will review this exercise during training.
48
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 2 - Record Expenditures in the Cash
and Bank Book
• Use the cash and bank book to record all
expenditures.
Refer to the completed form on page 52, as needed.
• For each expenditure, update the cash and bank
book:
1. Write the date of the payment in the Date
column.
2. Describe the entry in the Description column.
Include the cheque number if the purchase was
paid by cheque.
3. Write the budget category code in the Budget
Category column. For example, write "D" for
the purchase of drugs and supplies. Write "F"
for money paid for fuel for cold-chain and
sterilization.
4. Write the amount of money withdrawn in the
Debit column of the appropriate section.
If a cheque was written or money was
withdrawn from the bank, write the amount
in the Debit column of the Bank section.
If money was withdrawn from cash box,
write the amount in the Debit column of the
Cash section.
Add the amount in the Debit column from
the amount in the Balance column of the
previous entry in the appropriate section.
Write the total in the current entry’s Balance
column.
Add the amounts in the Bank Balance and
Cash Balance columns. Write the sum in
the Total Balance column.
49
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
CASH AND BANK BOOK
Name of responsible person:.
Ref
no.
Date
Bamali
Name of Health Unit:.
URD
Name of District:
Month:
Sabali
Description Budget
(transaction) Category
Year:.
March
Cash
Bank
Debit
(out)
Credit
(in)
1/3/96 Balance
brought
forward
1996
Balance
Debit
(out)
Credit
(in)
Balance
Total
Balance
1,500
400
1,900
001
3/3/96 Payment of
drugs
chq 0009
D
400
1,100
400
1,500
002
7/3/96 Purchase of
O
25
1,075
400
1,475
450
1,525
400
1,525
400
1,450
300
1,450
345
1,495
345
lf470
335
1,460
office
supplies
003
15/3/96 OPD
consultation
receipts
291-316
004
18/3/96 Bank deposit
005
19/3/96 Purchase of
cleaning
supplies
006 21/3/96
1,125
50
O
1,150
100
25/3/96 Drug receipts
126-144
D
008
25/3/96 Cold-chain
fuel
chq 0010
F
009
26/3/96 Fuel for
outreach
FO
50
1,050
75
Bank deposit
007
50
1,075
U
100
45
1,150
lf125
25
1,125
Totals
Balance carried
forward
50
10
Participant Guide
Financial Management: Manage Revenue and Expenditures
Practice Exercise for Recording Expenditures in the Cash and Bank
Book
Complete the cash and bank book for each case scenario:
1. On 29 April 1996, the Treasurer paid $12 in cash for office supplies.
2. On 29 April 1996, the Treasurer wrote a $1,000 cheque for the purchase of drugs and
supplies. The cheque number is 0010.
51
Financial Management: Manage Revenue and Expenditures
Participant Guide
CASH AND BANK BOOK
Name of District:
Sabali
Name of responsible person:.
Ref
no.
Date
Bamali
Name of Health Unit:.
URD
Description Budget
(transaction) Category
Month:
Cash
Bank
Debit
(out)
Balance
Credit
(in)
1/4/96 Balance
brought
forward
Balance
300.00
$3,300.00
2,940.00
300.00
3,240.00
311.50
3,251.50
305.50
3,245.50
312.60
3,252.60
212.60
3,252.60
3/4/96 Payment of
drugs
chq 0009
D
002
7/4/96 Delivery fee
receipts
0291-0300
U
2,940.00
003
8/4/96 Purchase of
office
supplies
O
2,940.00
004 21/4/96 OPD
consultation
receipts
0801-0802
U
2,940.00
60.00
Credit
(in)
Debit
(out)
Total
Balance
3,000.00
001
100.00 3,040.00
005 25/4/96 Bank deposit
1996
Year:
April
11.50
6.00
7.10
100.00
006 29/4/96 Lab fee
receipts
0500-0507
L
3,040.00
15.00
227.60
3,267.60
007 29/4/96 Drug
receipts
0711-0716
D
3,040.00
4.00
231.60
3,271.60
008
009
Totals
Balance carried
forward
-r I M - I I O
)' J
0^82-252
l
—
V O0'
V
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 3 - Record Expenditures on the Budget Item
Expenditure Form
• Use the purchase receipt and the cash and bank book to update the
Budget Item Expenditure Form.
Budget Item Expenditure Form
$30
Category: Vehicle maintenance (V) Amount Budgeted:
Date
Description
Amount
Spent
Total Amount
Spent to Date
Balance
2 Feb 96
oil change
$10
$10
$20
10 March 96
spark plugs
$3
$13
$17
15 March 96
tires
$10
$23
$7
• To complete the form:
1. Identify all expenditures made during the day in the cash and
bank book.
2. For each expenditure type:
a. Find the appropriate Budget Item Expenditure Form.
b. Write the Date and Description of the expenditure.
c. Write the amount of money spent in the Amount Spent
column.
d. Calculate the Total Amount Spent to Date using one of the
following methods:
i.
Amount Spent + Total Amount Spent to Date of the
previous entry
ii. Total all the amounts in the Amount Spent column
iii. Subtract the Balance from the Amount Budgeted
e. Use the following equation to complete the Balance column:
Balance = Amount Budgeted - Total Amount Spent to
Date
53
Financial Management: Manage Revenue and Expenditures
Participant Guide
Practice Exercise for Completing the Budget Item Expenditure Form
Complete the Budget Item Expenditure Form for the following purchases.
1. The cashier paid $5 to purchase a notepad and some erasers on 12 April 1996.
Budget Item Expenditure Form
Category:
Office supplies (O)
Amount Budgeted:
$20
Date
Description
Amount
Spent
Total Amount
Spent to Date
Balance
15 Feb 96
pens, paper
$5
$5
$15
30 March 96 pencils, paper
$7
$12
$8
2. The pharmacist paid $15 to replace a broken chair on 15 April 96.
Budget Item Expenditure Form
Category:
Amount Budgeted:
Furniture (FU}
$25
Date
Description
Amount
Spent
Total Amount
Spent to Date
Balance
15 Jan 96
stool for
delivery room
$9
$9
$16
17 March 96
small
consultation
table
$12
$21
$4
54
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 4 - Write a Cheque
Participant Notes
• If funds are available and the purchase does not
require approval, pay in cash or write a cheque.
• Write a cheque when you need to buy something
expensive.
• There are three types of cheques:
Bearer cheque: anyone can cash it or endorse it
Order cheque: can only be cashed or endorsed
by the person to whom the cheque is addressed
Crossed cheque: can only be deposited to an
account. Provides additional protection against
theft or loss
275
Date 26/5/96
Amount $25,50
| Standard Bank
i
i
275
i
i
i
i
i
i
i
i
26 March
I Pay to the
| order of _ Maria Obweto
For —
Maria Obweto
— - I(
Allowance '
$
19 96
25.50
Twenty1 five dollars and 50/100 Dollars
i
Sal Mirazi
i
I 051401865 958372
• To write a cheque:
Write the name of the person who will receive the cheque in the
Pay to the order of line.
Write the amount of the cheque in numbers and letters.
Always sign and date the cheque.
Record the amount of each cheque on the counterfoil or cheque
book stub.
55
Financial Management: Manage Revenue and Expenditures
Participant Guide
Practice Exercise for Writing a Cheque
Write a cheque for the following case scenario:
The pharmacist, John Wasalo, requested $20.30 for motorcycle parts. You checked the
appropriate Budget Item Expenditure Form and found that $25 dollars are available. Write
a cheque for the amount requested.
725
725
| Standard Bank
Date
i
i
i
i
i
i
i
Amount
I Pay to the
| order of
19
i
i
i
i
Dollars
For
I 1948 35779 3950103
The facilitator will review this exercise during training.
56
Financial Management: Manage Revenue and Expenditures
Participant Guide
Step 5 - Make a Requisition for Large
Purchases
• For most expenditures, approval is given beforehand
because most items are not expensive.
• When expenditures reach a certain amount, it is
necessary to get approval.
• Health committee members should discuss the
amount above which a requisition should be made
and who will approve it.
• For large expenditures that require approval:
Obtain price quotations.
Make a requisition.
Obtain approval from authorized persons.
• Obtain price quotations:
to have a more accurate estimate of the cost of
the purchase or expenditure
to compare prices between competitors
to make sure you are not paying more for a
purchase than you should
• In some places, there may be preprinted requisition
forms.
• If preprinted requisition forms are not available, you
can easily make your own.
(continued)
57
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
• Complete a requisition form:
to inform the authorized persons of the amount of money that you
expect to spend on a purchase
to have a record that shows the expenditure was approved before
the purchase was made
Requisition No:
Date:
36
17 April 1996
Amount in numbers:
$250
Paid to: Anwar Humba
For the amount of (in letters): Two hundred fifty dollars
For: a new motorbike
Signature of applicant:
Anwar Humba
Signature of approval: Nelson Faluli
• To complete the requisition form:
a. Write a sequential requisition form number.
b. Write the date you complete the form.
c. Write the name of the person requesting the money in the Paid to
line.
d. Write the amount of money requested in numbers and in letters.
e. Describe the expenditure in the For line.
f.
Ask the authorized person(s) to approve and sign the requisition
form on the Signature of approval line.
g. Give the person requesting the money either cash or a cheque for
the approved amount.
h. Ask the person to sign his or her name in the Signature of
applicant line.
(continued)
58
Financial Management: Manage Revenue and Expenditures
Participant Guide
• After the purchase is made, the person who
requested the money should give you a purchase
receipt and any remaining funds.
• The money given should be accounted for.
• If funds remain from the purchase, update the cash
and bank book.
• If the requisition, receipt, and remaining funds do
not match, ask the person who requested the money
to explain what happened.
• Attach the purchase receipt to the requisition and file
it.
• If the purchase was not made:
Obtain the full amount of money that was given
to the person requesting the funds and issue a
receipt.
Update the cash and bank book.
59
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
Practice Exercise for Making a Requisition
Make a requisition for the following case scenario:
-
The pharmacist, John Wasalo, requested $170.00 to repair the leaking health unit roof.
He asked two contractors to estimate the cost and $170.00 was the best quote. Make a
requisition for the amount requested.
The facilitator will review this exercise during training.
60
Participant Guide
Financial Management: Manage Revenue and Expenditures
ACTIVITY 2 - MANAGE EXPENDITURES
PERFORMANCE CHECK 2
STOP
Do not begin the Performance Check until the facilitator has given you the instructions!
You will work individually to complete the Performance Check. Use the following sample forms
to complete the Performance Check:
Budget Item Expenditure Form
requisition form
cash and bank book
sample cheque
1. The nurse requests $25 for an office chair. Use the Budget Item Expenditure Form to determine
if money is available. Is money available for the purchase? Explain your answer.
Budget Item Expenditure Form
Category:
Amount Budgeted:
Furniture (FU)
$45
Date
Description
Amount Spent
Total Amount
Spent to Date
Balance
15 Jan 96
lamp
$10
$10
$35
(continued)
61
Financial Management: Manage Revenue and Expenditures
Participant Guide
2. The health unit head needs $1,000 to purchase drugs and supplies. Use the Budget Item
Expenditure Form to determine if money is available. Is money available for the purchase?
Explain your answer.
Budget Item Expenditure Form
Amount Budgeted:
$2,500
Category:
Resupply of (trues and supplies (D)
Date
Description
Amount Spent
Total Amount
Spent to Date
Balance
14/3/96
purchase drugs
$1,000
$1,000
$1,500
3. The nurse, Joseph Mendali, requests $500 to have the stock room door and windows secured and
to purchase a lock box for money kept at the health unit. Complete requisition form number 56.
Use today’s date.
Requisition No:
Date:.
Amount in numbers:.
Paid to:
For the amount of (in letters):.
For:.
Signature of approval:
Signature of receipt:.
(continued)
62
Financial Management: Manage Revenue and Expenditures
Participant Guide
4. The health committee and health staff approved the $500 requested to secure the stock room door
and windows and to purchase a lock box for money kept at the health unit. Sebo Dombe has
done the work and would like to be paid by cheque. Complete the following cheque for the full
amount using today's date.
534
534
; Standard Bank
i
Date
Amount
For
i
i
i
I Pay to the
| order of
$.
i
i
i
i
i ------------------------------------------------i
i
i
Dollars
I 1948 35779 3950103
5. Use the cash and bank book on the following page to record the following expenditures for
today's date.
$25 for an office chair was paid in cash
$ 1,000 to purchase drugs and supplies was paid by cheque 0025
$500 requested to secure the stock room door and windows and to purchase a lock box was
paid by cheque 0026
63
Financial Management: Manage Revenue and Expenditures
Participant Guide
CASH AND BANK BOOK
Sabali
Month:
Description Budget
(transaction) Category
Bank
Name of responsible person:.
Ref
no.
Date
Bamali
Name of Health Unit:.
Name of District:
Debit
(out)
Credit
(in)
June
Year:
1996
Cash
Balance
Debit
(out)
Credit
(in)
150.00
2,650.00
175.00
2,675.00
175.00
2,656.50
75.50
250.50
2,732.00
8.95
259.45
2,740.95
183.95
2,740.95
2,500.00
1/6/96
Balance
brought
forward
001
3/6/96
Drug
receipts
0555-0570
D
002
7/6/96
Purchase of
office
supplies
O
003
10/6/96
Consultation
receipts
0767-0780
U
2,481.50
004
11/6/96
Drug
receipts
0571-0578
D
2,481.50
005
15/6/96
Bank deposit
25.00
2,500.00
2,481.50
18.50
75.50
006
007
008
Totals
Balance carried forward
64
2,557.00
75.50
Balance
Total
Balance
Financial Management: Manage Revenue and Expenditures
Participant Guide
6. Update the Budget Item Expenditure Forms for the following expenditures for today's date.
$25 for an office chair was paid in cash
$ 1,000 to purchase drugs and supplies was paid by cheque 0025
$500 requested to secure the stock room door and windows and to purchase a lock box was
paid by cheque 0026
Budget Item Expenditure Form
Category:
Amount Budgeted:
Furniture (FU)
$45
Date
Description
Amount Spent
Total Amount
Spent to Date
Balance
15 Jan 96
lamp
$10
$10
$35
Budget Item Expenditure Form
Category:
Resupply of drug$ and supplies (D)
Amount Budgeted:
$2.500
Date
Description
Amount Spent
Total Amount
Spent to Date
Balance
14/3/96
purchase drugs
$1,000
$1,000
$1,500
Budget Item Expenditure Form
Category:
Amount Budgeted:
Building maintenance (M)
$850
Date
Description
Amount Spent
Total Amount
Spent to Date
Balance
1/2/96
repair broken
window pane
$8
$8
$842
7. Let a facilitator know when you have completed the Performance Check.
65
Financial Management: Manage Revenue and Expenditures
Participant Guide
PLENARY DISCUSSION 2
While you are waiting for the plenary discussion, think about the following
questions:
What is the most difficult part of managing expenditures?
For what amount do you need to complete a requisition form? How did
you determine that amount?
How do you manage emergency expenditures that would normally require
approval?
66
Financial Management: Manage Revenue and Expenditures
Participant Guide
ACTIVITIES 1 AND 2
PERFORMANCE CHECK 3
STOP
Do not begin the Performance Check until the facilitator has given you the instructions!
You will work individually to complete the Performance Check. Use the following sample forms
to complete the Performance Check:
cash and bank book
deposit slip
receipt
Budget Item Expenditure Form
requisition form
cheque
1. Read the case scenario on the following page. Complete the appropriate financial form for each
transaction.
2. Update the cash and bank book.
3. Let a facilitator know when you have completed the Performance Check.
(continued)
67
Financial Management: Manage Revenue and Expenditures
Participant Guide
Case Scenario
You are the Treasurer of your health committee. It is 18 June 1996 and you have many financial
tasks to complete today:
1. Collect $48 from the health unit cashier for drug receipts 0789-0800. Issue the cashier a
receipt.
Receipt No. 112
District:
Health Unit:.
Name:.
For:.
Amount:.
Dollar
Date:.
Signed:
2. The Secretary of the health committee needs some pencils and paper for the next health
committee meeting. He asks you for $5 in cash. Check the Budget Item Expenditure Form.
If funds are available, give him the money.
Budget Item Expenditure Form
Category:
Amount Budgeted:
Office supplies (O)
$20
Date
Description
Amount Spent
Total Amount
Spent to Date
Balance
15 Feb 96
pens, paper
$5
$5
$15
30 March 96
pencils, paper
$7
$12
$8
12 April 96
notepad, erasers
$5
$17
$3
(continued)
68
Financial Management: Manage Revenue and Expenditures
Participant Guide
3. The health unit head requests money for an operating table. She has checked with three
stores and cannot fmd a table for less than $125. Complete requisition form number 19.
Requisition No:
Date:.
Amount in numbers:.
Paid to:.
For the amount of (in letters):.
For:
Signature of approval:.
Signature of receipt:
4. Total the following drug receipts and update the cash and bank book.
Drugs Receipts for 18 June 1996
Receipt
Number
Name and Quantity of Item Issued and Fee Collected
0801
20 tablets of acetyl salicylic acid, 300 mg
$0.40
0802
20 packets of oral rehydration salts
$2.00
0803
30 tablets of folic acid, 5 mg
0804
25 tablets of acetyl salicylic acid, 300 mg
$0.50
0805
40 tablets of acetyl salicylic acid, 300 mg
$0.80
0806
50 tablets of cotrimoxazole 400 mg + 80 mg
0807
30 tablets of folic acid, 5 mg
0808
50 tablets of cotrimoxazole 400 mg + 80 mg
$0.60
$2.00
$0.60
$2.00
A
(continued)
69
Financial Management: Manage Revenue and Expenditures
Participant Guide
It is 19 June 1996. Complete the following:
5. There is too much cash at the health unit. Deposit $150 in the bank. Complete the deposit
slip below. Update the cash and bank book.
Notes
Standard Bank
Cash
Coins
Date:.
Account No..
Subtotal Cash
018475456
Total in words.
Cheques
Paid in by.
Subtotal Cheques
CASHIER
and stamp
Cashier's signature
TOTAL DEPOSIT
6. The operating table was approved. Write cheque 143 for $125 to your health unit head.
143
| Standard Bank
Date
i
i
i
i
i
8
Amount
| Pay to the
I order of
For
143
$.
i
i
i
i
i
i
i
i
i
Dollars
I 1948 35779 3950103
(continued)
70
Financial Management: Manage Revenue and Expenditures
Participant Guide
CASH AND BANK BOOK
Name of District:
Name of responsible person:.
Sabali
Month:
Description
(transaction)
Budget
Category
Bank
Ref
no.
Date
Barnali
Name of Health Unit:.
URD
Debit
(out)
Credit
(in)
June
Year:
J 996
Cash
Balance
Debit
(out)
Credit
(in)
2,500.00
1/6/96 Balance
brought
forward
001
3/6/96 Drug
receipts
0755-0766
D
002
7/6/96 Purchase fuel
for cold-chain
F
2,500.00
2,481.50
18.50
003
004
005
006
007
008
Totals
Balance carried
forward
71
25.00
Balance
Total
Balance
150.00
2,650.00
175.00
2,675.00
175.00
2,656.50
Financial Management: Manage Revenue and Expenditures
Participant Guide
PLENARY DISCUSSION 3
While you are waiting for the plenary discussion, think about questions that you
would like to ask the facilitator, or any observations you would like to share with
other participants.
72
Financial Management: Manage Revenue and Expenditures
Participant Guide
ACTIVITY 3 - PREPARE FINANCIAL REPORT
Introduction to Activity 3
• There are four main reasons why you should prepare
and use financial reports:
Use Financial Reports to:
Identify if your health unit is going
bankrupt.
Determine if your health unit can improve
activities.
Determine if your health unit is wasting
resources.
Ensure accountability.
Prepare Budgeted versus Actual
Expenditures Report
• At the end of the budgeting period, prepare a report
that compares the amount budgeted and the amount
spent for each expenditure.
• Compare budgeted and actual expenditures:
to determine if you spent more or less on each
category of expenditure than what was budgeted
to determine what you spent most of your money
on
• Use the budgeted and actual expenditures report in
the following ways:
If the amount spent exceeded the budgeted
amount, examine the possible causes.
(continued)
73
Participant Notes
Financial Management: Manage Revenue and Expenditures
Participant Guide
Identify how to adjust the amount budgeted for
the next budgeting period.
Participant Notes
• Use a form to help you complete the report.
Refer to the sample form on the following page.
• To complete the report:
1. Write the name of the district and health unit.
2. Write the date of the report.
3. Refer to the budget for the reporting period.
Write the name of each expenditure in the
Category of Expenditure column.
For each item in the Category of
Expenditure column, write the amount
budgeted in the Amount Budgeted line on
the report form.
4. Obtain the Budget Item Expenditure Forms. For
each category of expenditure, record the Total
Amount Spent to Date in the Amount Spent
column on the report form.
(continued)
74
Participant Guide
Financial Management: Manage Revenue and Expenditures
Report on Budgeted versus Actual Expenditures
District:
Health Unit:
Date:
Category of Expenditure
Amount
Budgeted
TOTAL
Observations:
Signatures:
75
Amount Spent
Difference
Financial Management: Manage Revenue and Expenditures
Participant Guide
5. For each item in the Category of Expenditure
column:
Participant Notes
Subtract the amount in the Amount Spent
line from the quantity in the Amount
Budgeted line.
Write the result in the Difference column.
6. Total the amount in the Amount Budgeted,
Amount Spent, and Difference columns. Write
the totals at the bottom of each respective
column in the Total row.
7. Check your calculations by subtracting the total
amount spent from the total amount budgeted.
The result should equal the total in the
Difference column.
8. Review the report and note any findings in the
Observations line. For example, include an
explanation of why the budget was not met.
9. Ask the appropriate people to sign the report.
• A difference that is negative between the amount
budgeted and the amount spent means a debt or an
overexpenditure.
• When you have a debt or an overexpenditure, do not
try to reallocate money from another item. This is
not possible or useful because it is already the end of
the budgeting period.
• During the next budgeting period, you should
increase the amount allocated to this item.
• When the amount budgeted minus the amount spent
is a large, positive amount, question the usefulness
of the budget item since very little money has been
spent.
76
Participant Guide
Financial Management: Manage Revenue and Expenditures
Practice Exercise for Preparing Budgeted versus Actual Expenditures
Report
Use the sample budget and sample information on the following pages to complete the blank
report form on page 79.
Amount Spent During January - June 1996
resupply of essential drugs and supplies
3,240
resupply of information tools
110
fuel for cold-chain and sterilization
115
workplan activities
140
fuel for outreach activities
38
salaries
1,320
office supplies
40
furniture
20
allowances
720
vehicle maintenance
40
cleaning supplies
20
building maintenance
18
replacement cost
25
water
10
electricity
15
miscellaneous
15
(continued)
77
Financial Management: Manage Revenue and Expenditures
Participant Guide
BUDGET FORM
District:
Bqmali
Health Unit:,
Budget for the Period: 01 / January / 96
To:
URD
30 I June I 96
1) Total Amount to be Budgeted
Cash and Bank Book
$5,900
Date 75 December 1995
Expected Revenue
$5,900
Total
$295
2) Reserve funds
3) High priority costs
3.1
Essential Drugs/Supplies (D)
3.2
Information Tools (1)
3.3
Fuel for cold-chain and sterilization (F)
3.4
Fuel for outreach activities (FO)
3.5
Workplan activities
3.5.1
3.5.2
3.5.3
Storage of drugs
_ $120
3.6
Electricity (E)
$20
3.7
Water (W)
$10
3.8
Salaries (S)
$1,320
Total high priority costs
4) Low priority costs
4.1
Workplan activities
4.1.1 Outreach
4.2
Allowances (A)
4.3
Office supplies (O)
4.4
Vehicle maintenance (V)
4.5
Cleaning supplies (C)
4.6
Building maintenance (M)
4.7
Furniture (FU)
4.8
Replacement cost (RC)
4.9
Miscellaneous (MS)
$20
$875
Total Low priority costs
5) Total high plus low priority costs
Signature
Committee Chairperson
Panala_____
Conchetta____
Date Budget Approved: 18/ Jan 196
Signature
Health Unit Head
Signature
Committee Treasurer
Mkamwe____
78
Signature
District Medical Officer
Taluli
Financial Management: Manage Revenue and Expenditures
Participant Guide
Report on Budgeted versus Actual Expenditures
Health Unit:
Date:
Category of Expenditure
Amount
Budgeted
District:
TOTAL
Observations:
Signatures:
79
Amount Spent
Difference
Financial Management: Manage Revenue and Expenditures
Participant Guide
Answer to the Practice Exercise
Report on Budgeted versus Actual Expenditures
URD
District:
Health Unit:
Date:
Bamqli
1 July 1996
Amount
Budgeted
Amount Spent
Difference
resupply of essential drugs and supplies
3,000
3,240
-240
resupply of information tools
100
110
-10
fuel for cold-chain and sterilization
120
115
5
fuel for outreach activities
40
38
2
salaries
1,320
1,320
0
water
10
10
0
electricity
20
15
5
workplan activities
140
140
0
office supplies
20
40
-20
furniture
25
20
5
allowances
720
720
0
vehicle maintenance
30
40
-10
cleaning supplies
5
20
-15
building maintenance
10
18
-8
replacement cost
25
25
0
miscellaneous
20
15
5
5,605
5,886
-281
Category of Expenditure
TOTAL
Observations: Amount of money spent on drugs exceeded budgeted amounts by $240 because a large quantity
of drugs was spoiled during the rainy season. $10 excess in resupply of information tools due to MOH price
increase. $20 excess in office supplies due to price increase. Excess in cleaning supplies and building
maintenance due to flooding of health unit facility. Excess in vehicle maintenance due partly to price increase.
Signatures:
Your signature
Other signatures
80
Financial Management: Manage Revenue and Expenditures
Participant Guide
If your health unit is doing forecast budgeting, read the following
section.
• You will also use budget item revenue forms to regularly monitor
revenue collected during the budgeting period.
Budget Item Revenue Form
Category: Deliveries Expected Revenue for: J Jan - 30 June 97 is $300
Date
Description
Amount
Collected
Total
Amount
Collected
to Date
Expected
Revenue Total Amount
Collected to
Date
2 Feb 97
1 delivery
$10
$10
$290
19 Feb 97
1 delivery
$10
$20
$280
03 Mar 97
1 delivery
$10
$30
$270
• You will create a budget item revenue form for each health unit
service that generates money.
• You will create new forms for each new budgeting period.
• Use the budget item revenue forms after you establish your budget.
• When you determine expected revenue, you should know the user
fees for each health unit service.
• By looking at these forms, you can quickly determine whether the
amount of revenue is progressing as expected.
• You can consider how health unit services are being implemented and
identify problems with the services if revenue is not progressing as
expected.
(continued)
81
Financial Management: Manage Revenue and Expenditures
Participant Guide
• At the end of the budgeting period, use the budget
item revenue forms to prepare a report that compares
expected revenue with actual revenue.
Refer to the sample report form on the following
page.
• This report form will help you to quickly compare
expected revenue with actual revenue. Develop your
own report to fit your local needs.
• The report will help you determine:
if you collected more or less for each category of
revenue than was estimated
which service generated the most money
• Use the report to adjust the expected revenue for the
upcoming budget, if necessary.
• For example, if you estimated that the health unit
expects $300 in delivery fees for a budgeting period,
and you collected only $200, identify the possible
reasons for the discrepancy.
• Determine whether you have made a calculation
error when estimating the expected revenue.
• Or, there may have been other reasons for the
discrepancy, for example, a decrease in the number
of expected patients.
82
Participant Notes
Participant Guide
Financial Management: Manage Revenue and Expenditures
Report on Expected versus Actual Revenue
Health Unit:
Date:
Category of Revenue
Amount
Expected
District:
TOTAL
Observations:
Signatures:
83
Amount
Collected
Difference
Financial Management: Manage Revenue and Expenditures
Participant Guide
ACTIVITY 3 - PREPARE FINANCIAL REPORT
PERFORMANCE CHECK 4
STOP
Do not begin the Performance Check until the facilitator has given you the instructions!
You will work individually to complete the Performance Check.
1. Use the following sample forms in the back of your Participant Guide to prepare a report on
budgeted versus actual expenditures:
a blank Budgeted versus Actual Expenditures Report form
a sample budget
information about money spent during July - December 1996
2. Discuss whether you should adjust the amount budgeted for the next budgeting period and how
you would do it, if needed.
3. Let a facilitator know when you have completed the Performance Check.
84
Participant Guide
Financial Management: Manage Revenue and Expenditures
Report on Budgeted versus Actual Expenditures
District:
Health Unit:
Date:
Category of Expenditure
Amount
Budgeted
TOTAL
Observations:
Signatures:
85
Amount Spent
Difference
Financial Management: Manage Revenue and Expenditures
Participant Guide
Amount Spent During July - December 1996
resupply of essential drugs and supplies
3,300
resupply of information tools
90
fuel for cold-chain and sterilization
130
workplan activities
140
fuel for outreach activities
45
salaries
1,320
office supplies
25
furniture
15
allowances
720
vehicle maintenance
240
cleaning supplies
5
building maintenance
15
replacement cost
25
water
10
electricity
30
miscellaneous
20
86
Participant Guide
Financial Management: Manage Revenue and Expenditures
BUDGET FORM
Bamali
Health Unit:.
District:
Budget for the Period: 01 I July / 96
URD
31 / January / 97
To:
1) Total Amount to be Budgeted
Cash and Bank Book
$5.900
Date 75 June 1996
Expected Revenue
$5.900
Total
$295
2) Reserve funds
3) High priority costs
3.1
Essential Drugs/Supplies (D)
3.2
Information Tools (I)
3.3
Fuel for cold-chain and sterilization (F)
3.4
Fuel for outreach activities (FO)
3.5
Workplan activities
3.5.1
3.5.2
3.5.3
Storage of drugs
$120
3.6
Electricity (E)
$20
3.7
Water (W)
$10
3.8
Salaries (S)
$1.320
Total high priority costs
4) Low priority costs
4.1
Workplan activities
4.1.1 Outreach
4.2
Allowances (A)
4.3
Office supplies (O)
4.4
Vehicle maintenance (V)
4.5
Cleaning supplies (C)
4.6
Building maintenance (M)
4.7
Furniture (FU)
4.8
Replacement cost (RC)
4.9
Miscellaneous (MS)
$20
$875
Total Low priority costs
5) Total high plus low priority costs
Signature
Signature
Committee Chairperson
Health Unit Head
Conchetta____
Panala____
Date Budget Approved: 18/ July 196
Signature
Committee Treasurer
Mkamwe____
87
Signature
District Medical Officer
Taluli___
Financial Management: Manage Revenue and Expenditures
Participant Guide
PLENARY DISCUSSION 4
While you are waiting for the plenary discussion, think about the following
questions:
What is the most difficult part of preparing the report?
Who is most likely to use the report at your health unit?
Would you share the results of the report with the community? If yes,
what information do you think they should know?
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