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Questionnaire Internal Control

Questionnaire Internal Control

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Published by: kristine1229 on Jul 06, 2010
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10/25/2012

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TECHNICAL REPORT NO. UKR-7
Internal Control and Cash ManagementManual and QuestionnairesNovember 1995
 
TECHNICAL REPORT UKR-7
Internal Control and Cash ManagementManual and QuestionnairesNovember 1995
Prepared by:Bradford C. Else, MIM CPASubmitted by the Zdrav
 Reform
Program to:AID/ENI/HR/HPAID Contract Number: CCN-0004-C-00-4023-00
 
EXECUTIVE SUMMARY
The need for enhanced internal control is a natural part of managing new streams of revenues at ahealth care facility. In addition, as operating margins tighten, the need to optimize controls over assets and cost management increases. This manual, along with its supporting questionnaires, isoffered for those health care managers at Polyclinic No. 2 in L’viv, Ukraine, who are beginningthe process of establishing useful and meaningful internal control procedures. Although theseconcepts are rather far-reaching for the polyclinic at this time, it is important and useful to present such concepts early on in the clinic’s reform program. The facility will have to “migrate”to more advanced internal controls as policy and economic progress deems their role andusefulness appropriate. Internal control over cash and other crucial operating assets ultimately promotes efficient and effective delivery of health care.
1.OVERVIEW OF INTERNAL CONTROL IN HEALTH CAREORGANIZATIONS
While internal control has many purposes, its chief aim within the health-care-facility setting istwofold: It is intended to provide health care managers with measurable assurances of (1) their facility’s effective and efficient operation, and (2) the reliability of the facility’s financial reports,which are sent to various external organizations in support of applicable laws and regulations. Inaddition, internal control seeks to minimize the risks of unauthorized acquisition, use, or disposition of assets. In other words, internal control also seeks to prevent fraud or minimallyidentify and detect fraud in a timely manner.Examples of internal control include the following:
Proper control procedures for the receipt, storage, and use of drug and medical supplyinventories (for example, periodic inventories, unannounced audits, and procedural testing).
Effective control procedures for the collection, recording, and accounting of cash from user fees. (For example, the individual handling the cash should not also keep the organization’s books.)
2.CREATING AN INTERNAL CONTROL STRUCTURE
Creating an effective internal control structure is a primary concern of most health careorganizations seeking to improve their operations. Specifically, the internal control structurerefers to the policies and procedures established to provide reasonable assurance that theorganization’s objectives will be achieved. The following five components are key toestablishing an effective internal control structure.1.
Creating an organization that promotes an environment of control.
Management’s attitudehas a significant influence on the effectiveness of an organization’s internal control structure.A management team with a cavalier attitude regarding its fiduciary responsibilities is likely tohave difficulty establishing a working system of internal control. Likewise, managers whofail to give written policies to employees whom it holds responsible for control are offering a

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