A comparative study of expenditure control methods in government and privately owned hospitals. (a study of university of nigeria teaching hospital, enugu and toronto hospital onitsha)

Project Abstract

<p> This research work on A Comparative Study of Expenditure Controls<br>method in Government and private Hospitals is aimed at studying and<br>analysing the different methods of expenditure control that is being<br>adopted by these hospitals, their practical application and their level of<br>effectiveness. It is aimed at carrying out a comparative analysis of two<br>hospitals. To achieve the aim of this research, secondary data through<br>textbooks and journals were used to review some of the related literatures.<br>Equally, questionnaires, interview and observation, which sought to find<br>out facts needed for analysing, were used. The questionnaires were<br>analyzed by simple percentages while hypothesis were tested using chisquare<br>statistics. The findings of the analysis indicate among others that<br>the method of expenditure control used by both hospitals are not the<br>same; The daily control method for private hospitals and the vote card<br>method for Government Hospitals. The different methods of expenditure<br>control used by the two hospitals are effective, but with slight loopholes<br>associated with vote card method. I recommend among others that both<br>hospitals should adhere strictly to authorization procedure for drug<br>purchased and materials purchases. Both hospitals should exhibit high<br>degree of cash management and employ competent personnel for proper<br>and efficient expenditure control. <br></p>

Project Overview

<p> 1.0 INTRODUCTION<br>1.1 BACKGROUND OF THE STUDY<br>Expenditure control or cost control is part of management control process,<br>in every organisation.<br>This process is very important to any organisation be it profit making<br>organisation or non-profit making organisation. Thus, lack of this practice<br>in any organisation will cause misapplication of cash in cash disbursement<br>process and this will create a very big problem leading the organisation<br>into deficit and at an extreme case, the organisation might wind up. Many<br>researches have been conducted in the reason for winding up of<br>companies and organisation in which lack of expenditure control process<br>had found responsible.<br>Expenditure control has been defined as the process by which managers<br>utilize effectively and efficiently, the scarce resource in the achievement of<br>the organisational goals. At this juncture, let us look at expenditure and<br>control from separate perspective.<br>2<br>Expenditure is the total amount spent on the process of trying to achieve a<br>particular organisational goal. Control means to order, limit, instruct or rule<br>something or someone’s actions. It is used by either government officials<br>or organisation managers to make restrictions on wages increases,<br>immigrate credit and so on (which are all expenditure).<br>As regards, this research work, which is the comparative study of<br>expenditure control methods in government and privately owned Hospitals,<br>A study of the University of Nigeria Teaching Hospital Enugu (UNTH) and<br>Toronto Hospital and Maternity Onitsha; this implies a comparative study of<br>non-profit making organisations, since UNTH is government owned<br>Hospital while Toronto Hospital is privately owned Hospital as a category of<br>profit making organisation. Non-profit making organisations are<br>characterized by the following:<br>a) There is neither a conscious profit motive nor an expectation of<br>earning net income.<br>b) No profit of any excess of revenue over expenditure is distributed to<br>those who contributed support through taxes and voluntary<br>donations.<br>3<br>In profit making organisations, the reverse of these characteristics is the<br>case in the sense that their major objective is to maximize profit and<br>excess of revenue over expenditure are given to the owners of the<br>organisation.<br>Government owned hospitals pay more attention to services they render to<br>the public, as their major objectives is to provide services that fulfil a social<br>needs for those who do not have the purchasing power to acquire these<br>services themselves. Irrespective of the fact that privately owned hospitals<br>try to render good and quality services to the public, they pay more<br>attention to maximize of profit which their major objective.<br>Comparative study of expenditure control in Government and privately<br>owned Hospital which is major research question in this research work has<br>to with the different ways and methods by which expenditure is being<br>controlled in each of the hospitals so that they will not run into deficit or<br>liquidations.<br>According to Johnson (1976), the management control concept which<br>imbibes the expenditure control are the same both in profit oriented and<br>non-profit oriented organisations, but the implication of these concepts<br>4<br>differ in important respect. We will want to find out if also the expenditure<br>control methods are the same or differ in the two hospitals under study,<br>owning to the fact that one is profit oriented and the other is non-profit<br>oriented.<br>1.2 STATEMENT OF THE PROBLEM<br>The problems encountered by the Government and privately owned<br>Hospitals in expenditure control are as follows:<br>The problem of daily control method and the vote card method. The<br>problem encountered is to know the effective method to use in the<br>two hospitals. Here, the problem encountered is to check whether<br>the daily control method will be efficient and effective in the<br>Government owned hospitals or whether the vote card method is the<br>best.<br>Another problem encountered by the hospitals in expenditure control<br>is the problem of internal control. Internal control is the essential<br>feature of an organisation, be it profit making or non-profit making,<br>and it is expected to be well managed effectively and efficiently. Any<br>5<br>problem or limitation of the internal control will pose a problem to the<br>expenditure control of the organisation.<br>Therefore, the above problems encountered by the two hospitals are the<br>problems of expenditure control methods encountered by the government<br>and privately owned hospitals by the government and privately owned<br>hospitals that attracted the attention of the researcher.<br>The problem definition in this research work is to investigate and analyse<br>the different ways and methods by which expenditure is controlled in<br>government owned hospitals and privately owned hospitals so that they<br>will not run into deficit and liquidation. As a comparative study, two<br>hospitals has been selected for the study, they are: University of Nigeria<br>Teaching Hospital Enugu (UNTH) for government owned Hospitals, and<br>Toronto Hospital and Maternity Onitsha for privately owned hospitals.<br>In this research, we study the different methods of expenditure control<br>being adopted by these hospitals and their practical application and their<br>level of effectiveness.<br>This study will form a basis for our analysis which will help to answer some<br>research questions.<br>6<br>1.3 OBJECTIVES OF THE STUDY<br>This study is conducted to:<br>1. Ascertain the expenditure control method adopted by the<br>government and privately owned hospitals.<br>2. Establish whether government and privately owned hospitals are<br>operating the same of different system of accounting.<br>3. Compare the expenditure method or model adopted by the privately<br>owned hospitals with that of the government owned hospital if there<br>is a difference.<br>4. Ascertain the efficiency and effectiveness of these expenditure<br>control methods in the operation of the privately and government<br>owned hospitals.<br>5. Make recommendations based on the findings.<br>1.4 RESEARCH QUESTIONS<br>1. What expenditure control methods are adopted in the two hospitals?<br>2. Do privately owned hospitals and government owned hospitals<br>operate the same method of expenditure control?<br>3. Are there any similarities and differences in their method and<br>application?<br>7<br>4. How efficient and effective are they to their users?<br>1.5 FORMULATION OF HYPOTHESIS<br>In this study, we will have two main types of hypothesis; the null<br>hypothesis denoted by (H0) and Alternative hypothesis denoted by (H1).<br>The null hypothesis is constructed such that it can be accepted if the<br>alternative hypothesis is rejected.<br>Accordingly, the researcher would examine the following hypothesis.<br>HYPOTHESIS 1<br>H0: Government and privately owned hospitals do not adopt the daily<br>control method of expenditure control.<br>H1: Government and privately owned hospitals adopt the daily control<br>method of expenditure control.<br>HYPOTHESIS 11<br>H0: Government and privately owned hospitals do not use the same<br>method of expenditure control.<br>8<br>H1: Government and privately owned hospitals uses the same methods of<br>expenditure control<br>HYPOTHESIS 111<br>H0: The methods of expenditure control used by government and privately<br>owned hospitals are not effective and efficient.<br>H1: The methods of expenditure control used by government and privately<br>owned hospitals are effective and efficient.<br>1.6 SIGNIFICANE OF THE STUDY<br>Control has to be exercised over all aspect of a business organisation as a<br>guard against any form of derailment from the organisations objective.<br>Therefore, the need to install an effective and efficient expenditure control<br>method in any organisation be it profit making or non-profit oriented<br>cannot be over emphasised. This is because lack of this practice<br>(expenditure control) in any organisation (profit oriented or non-oriented)<br>will cause misapplication of cash in cash disbursement exercise. Thus may<br>create a very high problem which may lead the organisations into deficit<br>and in extreme cases, the organisation may wind up.<br>9<br>This defines why this research hopes to create awareness to management<br>team of government and privately owned hospitals in order to put in place<br>an effective control system.<br>It will also improve the various ways and methods by which expenditure<br>are being controlled in each of the hospitals.<br>Being a comparative study, it will be useful to policy formulations in health<br>related issues, hospitals management board and potential managers of the<br>hospitals.<br>1.7 SCOPE OF THE STUDY<br>The study is on the expenditure control method on government and<br>privately owned hospitals, as a comparative study, it will be limited to the<br>accounting sections of the hospitals, which deals with its income and<br>expenditure. However, other issue which has direct implication on the<br>control aspect will be treated.<br>1.8 LIMITATIONS OF THE STUDY<br>Like every other research work, a lot of things posed as limitations to the<br>research. They include:<br>10<br>a) Financial: The present economic constraint in the country makes it<br>difficult for some families to feed well. Parents are faced with the<br>difficulty of training their children, especially those who have children<br>in the university find it difficult to pay their fees much more<br>sponsoring the research project work. The researcher of this project<br>is not an exception. So also, she uses the limited resources within her<br>reach to make this research work a reality.<br>b) Time: The interval between chosen of project topic, the submission<br>of the project and the preparation for the degree exams is very<br>infinitesimal, but these are mandatory activities and hence, the<br>researcher was deprived of many other activities to ensure their<br>fulfilment.<br>c) Attitude of workers: owing to the fact that so many workers<br>(employees) are not aware of what research is all about and its<br>importance, they have non-challant attitude towards the researcher<br>making it difficult for her to get the information’s needed<br>1.9 DEFINITIONS OF TERMS<br>For the purpose of clarity, the following terms used in this context are<br>hereby elaborated.<br>11<br>Expenditure control: Management tools that guides and ensures<br>that company/organisational spending are in accordance with the<br>policy plans.<br>Misappropriation: To steal something that you have been trusted to<br>take care of and use it for your own personal benefit.<br>Comparative study: to examine the difference between two or more<br>things.<br>Deficit: Being run at losses.<br>Privately owned Hospital: Hospital owned and financed by an<br>individual or group of people.<br>Audit guidelines: These are basic principles and practices which<br>members are expected to adhere to in the conduct of audit work.<br>Government owned hospitals: Hospitals owned and controlled by<br>government either federal or state government.<br>Liquidation: To cause a business to fold up so that its assets can be<br>sold to pay its debts. <br></p>