Finkler,sFinancialsManagementsforsPublic,sHealth,sandsNot-for-ProfitsOrganizationss7e
©sCQsPress,s2023
,Chapters3:s Additionals Budgetings Concept 3-4
s
INTRODUCTION
Chapter 1 s TO
FINANCIALs
MANAGEMENT
QuestionssforsDiscussion
1-
1.sFinancialsmanagementsissthessubsetsofsmanagementsthatsfocusessonsgeneratingsfinancialsinfor
mationsthatscansimprovesdecisions.sThesdecisionssaresorientedstowardsachievingsthesvarioussgoals
sofsthesorganizationswhilesmaintainingsassatisfactorysfinancialssituation.sFinancialsmanagementsenc
ompassessthesbroadsareassofsaccountingsandsfinance.
1-2.sInsproprietary,sorsfor-
profit,sorganizations,sansunderlyingsgoalsisstosmaximizestheswealthsofsthesownerssofsthesorganizat
ion.
1-
3.sInspublicsservicesorganizations,sdecisionssaresorientedstowardsachievingsthesvarioussgoalssofsth
esorganizationswhilesmaintainingsassatisfactorysfinancialssituation.
1-
4.sAccountingsissassystemsforskeepingstracksofsthesfinancialsstatussofsansorganizationsandsthesfina
ncialsresultssofsitssactivities.sItshassoftensbeensreferredstosasstheslanguagesofsbusiness.sThesvocab
ularysusedsbysaccountingsisstheslanguagesofsnonbusinesssorganizationssasswell.
1-
5.sAccountingsisssubdividedsintostwosmajorsareas:smanagerialsaccountingsandsfinancialsaccountin
g.sManagerialsaccountingsrelatesstosgeneratingsanysfinancialsinformationsthatsmanagersscansusest
osimprovesthesfuturesresultssofsthesorganization.sThissincludesstechniquessdesignedstosgeneratesa
nysfinancialsdatasthatsmightshelpsmanagerssmakesmoreseffectivesdecisions.sMajorsaspectssofsman
agerialsaccountingsrelatestosmakingsfinancialsplanssforsthesorganization,simplementingsthosesplans,
sandsthensworkingstosensuresthatsthesplanssaresachieved.sSomesexamplessofsmanagerialsaccounti
ngsincludespreparingsannualsoperatingsbudgets,sgeneratingsinformationsforsusesinsmakingsmajorsi
nvestmentsdecisions,sandsprovidingsthesdatasneededstosdecideswhetherstosbuysorsleasesasmajors
piecesofsequipment.sFinancialsaccountingsprovidessretrospectivesinformation.sAsseventssthatshav
esfinancialsimplicationssoccurstheysaresrecordedsbysthesfinancialsaccountingssystem.sFromstimestos
times(usuallysmonthly,squarterly,sorsannually),sthesrecordedsdatasaressummarizedsandsreportedsto
sinterestedsusers.sThesuserssincludesbothsinternalsmanagerssandspeoplesoutsidesthesorganization.s
Thosesoutsiderssincludesthoseswhoshaveslentsorsmightslendsmoneystosthesorganizations(creditors)
,sthoseswhosmightssellsthingsstosthesorganizations(calledssupplierssorsvendors),sandsothersinterest
edsparties.sThesesinterestedspartiessmaysincludesthoseswithsasparticularsinterestsinspublicsservices
organizations,ssuchsassregulators,slegislators,sandscitizens.sFinancialsreportssprovidesinformationso
nsthesfinancialsstatussofsthesorganizationsatsasspecificspointsinstime,sasswellsassreportingsthespastsr
, Finkler,sFinancialsManagementsforsPublic,sHealth,sandsNot-for-ProfitsOrganizationss7e
esultssofsthesorganization‘ssoperationss(i.e.,showswellsits hassdonesfromsasfinancial©sviewpoint).
sCQsPress,s2023
1-
6.sFinancesfocusessonsthesalternativessourcessandsusessofsthesorganization‘ssfinancialsresources.s
Obtainingsfundsswhensneededsfromsappropriatessourcessandsthesdeploymentsofsresourcesswithin
sthesorganizationsfallsundersthissheading.sInsaddition,sfinancesinvolvessthesfinancialsmarketss(suchs
assstocksandsbondsmarkets)sthats providesasmeansstos generatingsfundssforsorganizations.
1-
7.sYes.sAchievingsthesgoalssofsthesorganizationsrequiressfinancialsplanning.sFinancialsmanagement
sprovidessinformationsforsmanagersstosusesinsmakingstheirsdecisions.sItshelpssmanagerssbysprovi
dingsinformationsonstheslikelysfinancialsimpactsofseachsproposedsalternative.sItsalsosprovidessinfo
rmationsaboutsfinancialsstability,sefficiency,sandseffectiveness.
1-
8.sClearly,swesmightsexpectssomespublicsservicesorganizationssthatsaresproprietary,ssuchsasssomes
hospitals,stosearnsprofits.sButswhatsaboutsotherspublicsservicesorganizationsssuchsasscharities?sTh
eysshouldsmakesasprofitsasswell.sProfitssprovidesassafetysmarginsagainstsunexpectedscosts,sprovid
esresourcesstos replacesbuildingssandsequipment,sandstosexpandsandsimprovesservices.
1-9.s Federalsgovernments(seestextsFigures1-1)
◼ Individualsincomestaxes
◼ Socialsinsurancestaxes
◼ Corporatesincomestax
Statesandslocalsgovernments(seestextsFigures1-4)
◼ Salessandsgrosssreceiptsstax
◼ Federalsgovernment
◼ Propertystaxes
◼ Individualsincomestaxes
Healthssectors(seestextsFigures1-6)
◼ Privatesinsurance
◼ Medicare
◼ Medicaid
◼ Othersgovernmentsprograms
Not-for-profits sectors(seestext)
◼ Privatespaymentssforsgoodssandsservices
◼ Governmentspaymentssforsgoodssandsservices
◼ Donations
1-
10.sFederalsgovernmentsspendingsexceededs$6strillionsins2020sandsstatesandslocalsgovernments sp
endingswassmoresthans$3strillionsins2018.sInscontrast,sthesGDPswass$21strillionsins2020.sForsmores
upstosdatesinformation,sexaminesthesstatisticalstablessofsthesmostsrecentsEconomicsReportsofsthe
, Chapters3:s Additionals Budgetings Concept 3-4
s sPresident,swhichsissavailablesonline.
1-
11.sThesreportedssurplussincludessbothsonsandsoffsbudgetsitems.sSocialssecuritystaxessrepresentsa
nsoffsbudgets items thats untils recentlys raiseds mores revenues thans wass spents ons socials securitys p
ayments.
Thessurplussinsthissareasoffsetsothersgovernmentslosses,sandsevensresultedsinsansoverallssurplussf
orsthesfederalsgovernment.sThississnoslongersthescase,sand,soverstime,strustsfundsresourcesswillsb
esusedsupstosprovidesbenefits.sAssthesfederalsgovernmentswillsnotshavesaccessstosthesexcesssreso
urcessfromssocialssecurity,sits willshavestos borrowsandsincreasesthestotalslevelsofsfederalsdebt,sunle
sssrevenuessorsspendingsareschanged.
1-
12.sSometimessgiftsscomeswithsstringssattached.sIfsthesconditionssofsthesgiftscreatesasburdensthat
sthesorganizationsdoessnotswantstosaccept,sorssomehowsrequiressthesorganizationstosworksinsopp
ositionstositssmission,s its mights turnsdownsthesgift.
1-
13.sThesWorldsBankshassdefinedsNGOssass"privatesorganizationssthatspursuesactivitiesstosrelievess
uffering,spromotesthesinterestssofsthespoor,sprotectsthesenvironment,sprovidesbasicssocialsservic
es,sorsundertakescommunitysdevelopment"s(WorldsBanksOperationalsDirectives14.70).sNGOssares
quitessimilarstosthesnot-for-profitsorganizations.sTheysaresprimarilysmission-
focusedsrathersthansprofit-sfocused.s NGOssfallsintosthreesmainscategories:scommunity-
based,snational,sandsinternational.
PLANNING
Chapter 2 s FOR
SUCCESS:B
s
UDGETING
QuestionssforsDiscussion
2-
1.sPlanningshelpssthesorganizationsbyscausingsitssemployeesstosthinksaheadsandsanticipateschan
ge.sThississdonesbysestablishingsspecificsgoalssandsobjectives,scommunicatingsthosesobjectivesst
osthesindividualsswhosmustsachievesthem,sforecastingsfuturesevents,sdevelopingsalternatives,ss
electingsfromsamongsalternatives,sandscoordinatingsactivities.sThesactivitiessaressummarizedsinsa
sdocumentscalledsasbudget.sThesbudgetsdescribesswhatsweshopestosachievesandsthesresourcesst
hatswillsbesusedstoscarrysoutsthesorganization‘ssactivities.
©sCQsPress,s2023
,Chapters3:s Additionals Budgetings Concept 3-4
s
INTRODUCTION
Chapter 1 s TO
FINANCIALs
MANAGEMENT
QuestionssforsDiscussion
1-
1.sFinancialsmanagementsissthessubsetsofsmanagementsthatsfocusessonsgeneratingsfinancialsinfor
mationsthatscansimprovesdecisions.sThesdecisionssaresorientedstowardsachievingsthesvarioussgoals
sofsthesorganizationswhilesmaintainingsassatisfactorysfinancialssituation.sFinancialsmanagementsenc
ompassessthesbroadsareassofsaccountingsandsfinance.
1-2.sInsproprietary,sorsfor-
profit,sorganizations,sansunderlyingsgoalsisstosmaximizestheswealthsofsthesownerssofsthesorganizat
ion.
1-
3.sInspublicsservicesorganizations,sdecisionssaresorientedstowardsachievingsthesvarioussgoalssofsth
esorganizationswhilesmaintainingsassatisfactorysfinancialssituation.
1-
4.sAccountingsissassystemsforskeepingstracksofsthesfinancialsstatussofsansorganizationsandsthesfina
ncialsresultssofsitssactivities.sItshassoftensbeensreferredstosasstheslanguagesofsbusiness.sThesvocab
ularysusedsbysaccountingsisstheslanguagesofsnonbusinesssorganizationssasswell.
1-
5.sAccountingsisssubdividedsintostwosmajorsareas:smanagerialsaccountingsandsfinancialsaccountin
g.sManagerialsaccountingsrelatesstosgeneratingsanysfinancialsinformationsthatsmanagersscansusest
osimprovesthesfuturesresultssofsthesorganization.sThissincludesstechniquessdesignedstosgeneratesa
nysfinancialsdatasthatsmightshelpsmanagerssmakesmoreseffectivesdecisions.sMajorsaspectssofsman
agerialsaccountingsrelatestosmakingsfinancialsplanssforsthesorganization,simplementingsthosesplans,
sandsthensworkingstosensuresthatsthesplanssaresachieved.sSomesexamplessofsmanagerialsaccounti
ngsincludespreparingsannualsoperatingsbudgets,sgeneratingsinformationsforsusesinsmakingsmajorsi
nvestmentsdecisions,sandsprovidingsthesdatasneededstosdecideswhetherstosbuysorsleasesasmajors
piecesofsequipment.sFinancialsaccountingsprovidessretrospectivesinformation.sAsseventssthatshav
esfinancialsimplicationssoccurstheysaresrecordedsbysthesfinancialsaccountingssystem.sFromstimestos
times(usuallysmonthly,squarterly,sorsannually),sthesrecordedsdatasaressummarizedsandsreportedsto
sinterestedsusers.sThesuserssincludesbothsinternalsmanagerssandspeoplesoutsidesthesorganization.s
Thosesoutsiderssincludesthoseswhoshaveslentsorsmightslendsmoneystosthesorganizations(creditors)
,sthoseswhosmightssellsthingsstosthesorganizations(calledssupplierssorsvendors),sandsothersinterest
edsparties.sThesesinterestedspartiessmaysincludesthoseswithsasparticularsinterestsinspublicsservices
organizations,ssuchsassregulators,slegislators,sandscitizens.sFinancialsreportssprovidesinformationso
nsthesfinancialsstatussofsthesorganizationsatsasspecificspointsinstime,sasswellsassreportingsthespastsr
, Finkler,sFinancialsManagementsforsPublic,sHealth,sandsNot-for-ProfitsOrganizationss7e
esultssofsthesorganization‘ssoperationss(i.e.,showswellsits hassdonesfromsasfinancial©sviewpoint).
sCQsPress,s2023
1-
6.sFinancesfocusessonsthesalternativessourcessandsusessofsthesorganization‘ssfinancialsresources.s
Obtainingsfundsswhensneededsfromsappropriatessourcessandsthesdeploymentsofsresourcesswithin
sthesorganizationsfallsundersthissheading.sInsaddition,sfinancesinvolvessthesfinancialsmarketss(suchs
assstocksandsbondsmarkets)sthats providesasmeansstos generatingsfundssforsorganizations.
1-
7.sYes.sAchievingsthesgoalssofsthesorganizationsrequiressfinancialsplanning.sFinancialsmanagement
sprovidessinformationsforsmanagersstosusesinsmakingstheirsdecisions.sItshelpssmanagerssbysprovi
dingsinformationsonstheslikelysfinancialsimpactsofseachsproposedsalternative.sItsalsosprovidessinfo
rmationsaboutsfinancialsstability,sefficiency,sandseffectiveness.
1-
8.sClearly,swesmightsexpectssomespublicsservicesorganizationssthatsaresproprietary,ssuchsasssomes
hospitals,stosearnsprofits.sButswhatsaboutsotherspublicsservicesorganizationsssuchsasscharities?sTh
eysshouldsmakesasprofitsasswell.sProfitssprovidesassafetysmarginsagainstsunexpectedscosts,sprovid
esresourcesstos replacesbuildingssandsequipment,sandstosexpandsandsimprovesservices.
1-9.s Federalsgovernments(seestextsFigures1-1)
◼ Individualsincomestaxes
◼ Socialsinsurancestaxes
◼ Corporatesincomestax
Statesandslocalsgovernments(seestextsFigures1-4)
◼ Salessandsgrosssreceiptsstax
◼ Federalsgovernment
◼ Propertystaxes
◼ Individualsincomestaxes
Healthssectors(seestextsFigures1-6)
◼ Privatesinsurance
◼ Medicare
◼ Medicaid
◼ Othersgovernmentsprograms
Not-for-profits sectors(seestext)
◼ Privatespaymentssforsgoodssandsservices
◼ Governmentspaymentssforsgoodssandsservices
◼ Donations
1-
10.sFederalsgovernmentsspendingsexceededs$6strillionsins2020sandsstatesandslocalsgovernments sp
endingswassmoresthans$3strillionsins2018.sInscontrast,sthesGDPswass$21strillionsins2020.sForsmores
upstosdatesinformation,sexaminesthesstatisticalstablessofsthesmostsrecentsEconomicsReportsofsthe
, Chapters3:s Additionals Budgetings Concept 3-4
s sPresident,swhichsissavailablesonline.
1-
11.sThesreportedssurplussincludessbothsonsandsoffsbudgetsitems.sSocialssecuritystaxessrepresentsa
nsoffsbudgets items thats untils recentlys raiseds mores revenues thans wass spents ons socials securitys p
ayments.
Thessurplussinsthissareasoffsetsothersgovernmentslosses,sandsevensresultedsinsansoverallssurplussf
orsthesfederalsgovernment.sThississnoslongersthescase,sand,soverstime,strustsfundsresourcesswillsb
esusedsupstosprovidesbenefits.sAssthesfederalsgovernmentswillsnotshavesaccessstosthesexcesssreso
urcessfromssocialssecurity,sits willshavestos borrowsandsincreasesthestotalslevelsofsfederalsdebt,sunle
sssrevenuessorsspendingsareschanged.
1-
12.sSometimessgiftsscomeswithsstringssattached.sIfsthesconditionssofsthesgiftscreatesasburdensthat
sthesorganizationsdoessnotswantstosaccept,sorssomehowsrequiressthesorganizationstosworksinsopp
ositionstositssmission,s its mights turnsdownsthesgift.
1-
13.sThesWorldsBankshassdefinedsNGOssass"privatesorganizationssthatspursuesactivitiesstosrelievess
uffering,spromotesthesinterestssofsthespoor,sprotectsthesenvironment,sprovidesbasicssocialsservic
es,sorsundertakescommunitysdevelopment"s(WorldsBanksOperationalsDirectives14.70).sNGOssares
quitessimilarstosthesnot-for-profitsorganizations.sTheysaresprimarilysmission-
focusedsrathersthansprofit-sfocused.s NGOssfallsintosthreesmainscategories:scommunity-
based,snational,sandsinternational.
PLANNING
Chapter 2 s FOR
SUCCESS:B
s
UDGETING
QuestionssforsDiscussion
2-
1.sPlanningshelpssthesorganizationsbyscausingsitssemployeesstosthinksaheadsandsanticipateschan
ge.sThississdonesbysestablishingsspecificsgoalssandsobjectives,scommunicatingsthosesobjectivesst
osthesindividualsswhosmustsachievesthem,sforecastingsfuturesevents,sdevelopingsalternatives,ss
electingsfromsamongsalternatives,sandscoordinatingsactivities.sThesactivitiessaressummarizedsinsa
sdocumentscalledsasbudget.sThesbudgetsdescribesswhatsweshopestosachievesandsthesresourcesst
hatswillsbesusedstoscarrysoutsthesorganization‘ssactivities.
