Free Custom «Operating and Capital Expenditure Budget» Essay Paper

Free Custom «Operating and Capital Expenditure Budget» Essay Paper

 

HEALTH CARE BUDGET  
EXPECTED INCOME AND EXPENDITURE FOR THE COMING YEAR  
   
INCOME USD.
Patient bills 297,277
Income from the government 7,085
Fees levied in the labs 4,820
   
Charges on ambulance rents 26,766
Moneys from seminars and workshops 1,345
Funds from international bodies 145,000
TOTAL INCOMES 482,293
   
   
EXPENSES  
Next  anniversary 12,750
Welfare 10,050
Utility 2000
Communication 3,300
Library 1000
Transport 8,010
WHO Remission (15% contribution) 50,027
Stationery 4,368
staff Allowance and salary 171,000
Rents on the premise 9,777
Registration renewal 31,500
Guest Speaker 9,500
Public Address 300
cleaning 8,269
Equipment and drug purchase 130,000
Bank Charges 1,000
Miscellaneous 11,100
TOTAL EXPENSES 463,951
Surplus/ (Deficit) 18,342
NET TOTAL 482,293
   

Assumptions

It is assumed that this institution has steady clients who have discovered the need for the services offered at the station. The total income expected is 482,293 USD. The institution will use 463,951 for its expenses and in turn save 18, 342. All the moneys are set in USD.

The major drawback of internal control system is cost. The cost should not exceed the benefits. Designing and establishing an effective internal control system may take a longer duration of time and resources. Moreover the effectiveness of the internal control system is measured by the internal and external auditors. The audit fees are always very high that some companies may not afford.

Internal control does not provide absolute results of meeting the goals and objectives set. In case the company decides to provide reasonable assurance of doing so, they will strain on cost and benefit analysis. Therefore the company may provide only what they can afford which will limit the internal control system.

The third limitation of internal control is caused by the mistakes that are likely to occur during implementation of the whole process. The checks and balances put in place may not be met in the organization. Correction of the mistakes may be a long process that may not be met. The management may override the existing internal control leading to ineffectiveness. This is always very common in the most fraud schemes. In these schemes, the management can manipulate the financial accounts without being noticed (Anderson, 2008).

 

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