Food-Service-Manual-for-Health-Care-Institutions

Food Service Manual for Health Care Institutions
306
of service delivery. Executive decisions about resource allocation require skill and insight backed
by appropriate financial information. Financial management, then, is concerned with accessing
information that helps managers make financial decisions whose ultimate purpose is to provide
high-quality nutrition and food services while maximizing revenues and minimizing costs.
To assist health care managers in meeting this challenge, their institutions’ accounting and
finance departments generate and distribute a variety of reports. Although these reports can be
useful in directing departmental operations, many times they fail to provide the detail necessary
to fully evaluate a department’s performance. In some cases, managers may not receive
reports soon enough to pinpoint areas where corrective actions are needed. For this reason, a
sound system of financial control and management is essential for the operation of an efficient
and effective food service department.
In this chapter, I discuss control of the system, the budgeting process, and financial management
as basic functions of an organization.
Financial Management Systems Model for
Health Care Food Service Operations
The ability of an operation’s financial management system to satisfy the information needs of
food service managers and decision makers can be evaluated by analyzing the current manual system
(as discussed in Chapter 10). As the basic operating device of systems analysis, the model is
effective in representing the elements of an actual system. A model is always less complex than
reality, but a good model has sufficient detail to approximate major characteristics of the actual
system. Therefore, models that incorporate desirable elements can be useful in systems evaluation.
Hoover’s prototype, a financial management systems model for health care food service
operations, consists of five essential elements. These same elements are used by all systems and
subsystems within a food service operation. They are control, input, processing, output, and
feedback. The model is illustrated in Figure 11.1, which also shows the components of each
element. Note that the processing element is further divided into three standard accounting
cycle steps: journalizing, posting, and making adjustments. Each element in the model is connected
by lines with arrows that depict the flow of financial information within the system.
Types of Control
Control activities are essential parts of the responsibilities of managers at all levels in an organization.
Control is the management function that ensures that planned goals and objectives are
being accomplished with the most efficient and effective use of the organization’s resources.
The types of control are determined by the resources concerned.
There are four types of control. Operations control deals with the organization’s physical
resources. These resources include supply inventories, equipment, and physical facilities.
Operations control oversees the actual production of goods or services within the organization.
Operations control is charged with determining whether the organization’s supplies, equipment,
and facilities are being used effectively and efficiently to produce a quality product or service.
Human resource control oversees the organization’s use of its employees. The organization’s
systems for selecting and placing its employees are examined through human resource
control. The organization’s employee training and development programs, its performance
evaluation system, and its compensation and benefits program are examined as well.
Information control deals with the effectiveness of the organization’s sales and marketing
activities. A second area covered by information control is the organization’s system for forecasting
the future demand for its products and services. The organization’s information control
system also oversees the effectiveness of the organization’s public relations program.
Finally, financial control watches over the organization’s financial health. Financial control
deals with budgets, revenues, liabilities, and overall assets. (Revenues are the payments the