The paper "Financial Management for Warwickshire and Great Manchester Fire Rescue Authority" is a perfect example of a finance and accounting case study. Public financial management is established to oversee proper utilization of public funds through the provision of adequate internal control systems to put checks and balances on an operation to minimize costs and improve services to the services. The council ensures that public money is safeguarded, properly accounted for and used economically, efficiently and effectively. Procedures and policies are put in place to address areas of high risks like the financial risks which normally the organization is exposed to.
These management controls help people in charge to implement adequate measures in making better decisions for the smooth running of the organization. Financial management ensures funds are available to finance the services as per the requirement and proper control is made to minimize excessive expenditure with sound investment decision being made. The report addresses financial management control practices of Warwickshire fire and rescue authority by analyzing their financial statement as well as discussing major financial risks areas with their impact on the organization operation. this report shall conclude on the findings as to whether the FRS finance operation shows a fair view and how they minimize the risks of their operations.
The finance manager is supposed to set the report to the receipt to the public domain. 1.0 Setting the operational boundary Budgetary control is part of an organizational tool for planning and control of cost and it forms part of the responsibility accounting in an organization. The analysis is made for revenue and cost in areas of concern to measure the performance of the budget.
Budgetary control provides a formal basis of monitoring the progress of the organization as a whole towards the achievement of the objectives specified in a planning budget Terry (2003, P. 189) A budget is prepared based on anticipated revenue income and expected expenditure and capital investment decisions. Referring to the operational boundary of Warwickshire fire and rescue authority, the main sources of revenue funds to finance the operation of the council comes from government grants. These are from council tax income, government grants, government revenue support grants and business rates. 1.2 Main consideration FRS Based on the operational boundary figures, the main cash flow indicated comes from grants and out of it, the expenditure is already allocated against such a grant.
This is mostly the kind of budget in operation in the non-profit making organization where their work is basically to provide services to the public. However, by setting such operational boundaries, the management is concerned with making sure that heading actual spending does not exceed the budget authorized cash limit. This is effectively indicated on the operational boundary figures where they have set authorized limit headroom over and above the operational boundary to allow any emergency cash movements which is not within the budgeted control figures.
According to the figures given, FRS has tried to maintain its accounts within a reasonable margin of safety. In the report, on the audited financial statement, this is well illustrated on the council’ s revenue budget where the general fund balance had a carried forward balance of ₤ 8.9 million for the following period (page 27 of financial statement).
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