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Manual of Standards for Management of Hospital Finance Service.pdf
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Manual of Standards for Management of Hospital Finance Service
LIST OF ACRONYMS
1. AD Accounting Department 24. COD Cash Operations
Department
2. ADA Advice to Debit Account 25. COH Chief of Hospital
3. ADDO Aging of Due and
Demandable Obligations
26. CQI Continual Quality
Improvement
4 AFR Annual Financial Report 27. CRJ Cash Receipt Journal
5. AGDBs Authorized Government
Depository Banks
28. CRR Cash Receipt Record
6. AO Accountable Officer 29. CSC Civil Service Commission
7. AOM Audit Observation
Memorandum
30. DBM Department of Budget and
Management
8. APP Approved Procurement
Plan
31. DO Disbursing Officer
9. AR Accounts Receivable 32. DOH Department of Health
10. BAC Bids and Awards
Committee
33. DPCR Department Performance
Commitment Report
11. BAR Budget Accountability
Report
34. DSWD Department of Social
Welfare and Development
12. BCD Billing and Claims
Department
35. DV Disbursing Voucher
13. BD Budget Department 36. ER Emergency Room
14. BED Budget Execution
Documents
37. FAR Financial Accountability
Report
15. BPR Budget Performance
Review
38. FE Financial Expenses
16. BTr Bureau of Treasury 39. FMO Financial and Management
Officer
17. BURS Budget Utilization Request
and Status
40. FMS Finance Management
System
18. CAF Certification of Availability
of Funds
41. FS Finance Service
19. CAO Chief Administrative
Officer
42. GAA General Appropriation Act
20. CDC Cash Disbursement Ceiling 43. GAAM Government Accounting
and Auditing Manual
21. CDJ Cash Disbursement Journal 44. GAM Government Accounting
Manual
22 CO Capital Outlay 45. GARO General Allotment Release
Order
23. COA Commission on Audit 46 GAS Government Accountancy
Sector
21. xvi Manual of Standards for Management of Hospital Finance Service
46 GDB Government Depository
Bank
69. LGE Local Government
Executives
47 GFI Government Financing
Institution
70. LGU Local Government Unit
48 GJ General Journal 71. LOA Letter of Authorization
49 GJB General Journal Book 72. MAIP Medical Assistance to
Indigent Patient
50 GL General Ledger 73. MCC Medical Center Chief
51 GOCC Government-Owned and
Controlled Corporation
74. MDS Modified Disbursement
System
52 HFDB Health Facility
Development Bureau
75. MFO Major Final Output
53 HIMS Health Information
Management Service
76. MOB Management by
Objectives
54 HMO Health Maintenance
Organization
77. MOOE Maintenance and Other
Operating Expenditures
55 HOPSS Hospital Operation and
Patient Support Service
78. NBB No Balance Billing
56 HPDPB Health Policy
Development and
Planning Bureau
79. NC Non-Conformity
57 ICD International
Classification of Disease
80. NCA Notice of Cash Allocation
58 IPCR Individual Performance
Commitment Report
81. NCAA Non-Cash Availment
Authority
59 ISA International Solidarity in
Asia
82. NG National Government
60 ISO International
Organization for
Standardization
83. NGA National Government
Agency
61 JBR Journal of Bills Rendered 84. NGO Non-Governmental
Organization
62 JCD Journal of Checks
Disbursed
85. NKTI National Kidney and
Transplant Institute
63 JCI Journal of Checks Issued 86. NOH National Objectives for
Health
64 JE Journal Entry 87. OPCR Office Performance
Commitment Report
65 JEV Journal Entry Voucher 88. OPIF Organizational
Performance Indicator
Framework
66. LASA List of Allotments and
Sub-Allotments
89. ORS Obligation Request and
Status
67. LCP Lung Center of the
Philippines
90. PAGCOR Philippine Amusement and
Gaming Corporation
68 LDDAP List of Due and
Demandable Accounts
Payable
91 PAP Program, Activity and
Project
22. xvii
Manual of Standards for Management of Hospital Finance Service
92. PCF Petty Cash Fund 112. RAOD Registry of Allotments,
Obligations and
Disbursements
93. PCV Petty Cash Voucher 13. RAPAL Registry of Appropriation and
Allotments
94. PCMC Philippine Charity
Sweepstakes Office
114. RBUD Registry of Budget
Utilization and Disbursement
95. PDCA Plan, Do, Check and
Act
115. RCA Revised Chart of Account
96. PEM Public Expenditure
Management
116. RCD Report of Collections and
Deposits
97. PETDO Professional Education
Training and
Development Office
117. RROR Registry of Revenue and
Other Receipts
98. PGS Philippine Governance
System
118. RTH Return to Hospital
99. PHC Philippine Heart
Center
119. RVS Relative Value Scale
100. PHIC Philippine Health
Insurance Corporation
120. SAAODB Statement of Appropriations,
Allotments, Obligations,
Disbursements and Balances
101. PI Performance Indictor 121. SAAODBOE Statement of Appropriations,
Allotments, Obligations,
Disbursements and Balances
BY Object of Expenditures
102. PMS Performance
Management System
122. SABUDB Statement of Approved
Budget, Utilizations,
Disbursements and Balances
103 PPE Property, Plant and
Equipment
123. SARO Special Allotment Release
Order
.104. PPMP Proposed Procurement
Management Plan
124. SL Subsidiary Ledger
105. PPSAS Philippine Public
Sector Accounting
Standards
125. SOA Statement of Account
106. PS Personnel Service 126. SPMS Strategic Performance
Management System
107. PWD Person With Disability 127. TWG Technical Working Group
108. QFS Quantified Free
Service
128. UACS Unified Account Code
Structure
109. QMS Quality Management
System
129. UHC Universal Health Care
110. QRROR Quarterly Report of
Revenue and Other
Receipts
130 WFP Work and Financial Plan
111. RAL Responsibility,
Accountability and
Liability
23. xviii Manual of Standards for Management of Hospital Finance Service
# LIST OF TABLES PAGE/S
1
Proposed Staffing Standards for Level 3
Government Hospital with 200 to 1,500 Beds
25
2
Qualification Standards and Level of Competence
Required
26-28
3 Procurement Process 50
4 SPMS Five-Point Rating Scale 198
5
Main clauses and requirements under ISO
9001:2015
203-204
# LIST OF FIGURES PAGE
1.1 Basic Organizational Structure for Level 1 Hospital 18
1.2
Basic Organizational Structure for HOPSS in a Level
1 Hospital
19
1.3 Basic Organizational Structure for Level 2 Hospital 20
1.4
Basic Organizational Structure for HOPSS in Level 2
Hospital
21
1.5 Basic Organizational Structure for Level 3 Hospital 22
1.6 Organizational Structure for FS in Level 3 Hospital 23
1.7
Proposed Organizational Structure for FS in Level 3
Hospital
23
2.1 Financial Management Strategic Process Map 44
2.2 Supply Management from Acquisition to Disposal 48
3.1 Budget Cycle 80
4.1
Basic Organizational Structure for Government-
Owned and Controlled Specialty Hospitals
119
4.2
Organizational Structure of Finance Service in the
GOCC Specialty Hospitals
120
5.1 Budget Process in LGU Hospital
146
6.1 Basic Steps in Risk Management (ISO 31000:2018
Standards)
186
24. xix
Manual of Standards for Management of Hospital Finance Service
# LIST OF FIGURES PAGE
6.2 List of Common Identified Risks in Finance Service 187
6.3 Four Quadrants of Risk (COSO-ERM:2017) 188
6.4
Identified Common Financial Risks using the Four
Quadrants
188
6.5
Sample of Risk Management Plan for Finance
Service
190
7.1
Repetitive four-stage PDCA cycle model for
continuous improvement
202
25. xx
Manual of Standards for Management of Hospital Finance Service
TABLE OF CONTENTS
PART CONTENTS PAGE
Authorization i
Messages ii
Foreword iv
Preface v
Acknowledgement vii
List of Acronyms xv
List of Tables and Figures xviii
PART 1
Chapter 1 Introduction
1.1 Background 1
1.2 Purpose and Intent of the Manual 2
1.3 Coverage of the Manual 3
1.4 Structure of the Manual 3
1.5 Contents of the Manual 3
Chapter 2 Hospital Finance Service : An Overview
2.1 The DOH Policy Framework 6
2.2 The Hospital Finance Service: Statement of Vision,
Mission and Objectives
8
Chapter 3
Legal Frameworks, General Policies and Guiding
Principles
3.1 General Policies on Government Financial
Management System
11
3.2 Guiding Principles in Government Accounting 13
Chapter 4
Finance Service: Organizational Structure and
Staffing Requirements
4.1 Organizational Structure 17
4.2 Human Resource in the Finance Service 24
Chapter 5 Space and Equipment Requirements
5.1 Applicable Laws, Rules and Regulations 29
5.2 Standard Space Requirements 31
26. xxi
Manual of Standards for Management of Hospital Finance Service
PART CONTENTS PAGE
5.3 Equipment Requirements 37
Chapter 6
Finance Service Roles, Accountability and
Responsibilities
6.1 Major Key Roles of Financial Service in Hospital
Operation
39
6.2 Key Responsibilities of Finance Service 40
6.3 Public Accountability and Stewardship in the Finance
Service
42
6.4 Process Approach in Finance Service 43
6.5 Activities to Achieve Good Financial Management 45
6.6 Integrative Approach to Financial Management 46
6.7 Interrelation of Financial Management Process with
Critical Hospital Operation Process
47
6.8 Statutory and Regulatory Standards 53
Part II
Chapter 7
Financial and Management Officer: Head of Finance
Service
7.1 Interested Parties 56
7.2 Duties and Responsibilities 56
7.3 Guiding Principles 58
7.4 Core Process 59
7.5 Reportorial and Documentary Requirements 61
Chapter 8 Accounting Department
8.1 Interested Parties 62
8.2 Guiding Principles 63
8.3 Duties and Responsibilities 64
8.4 Core Processes 65
8.5 Process Flow 66
8.6 Reportorial and Documentary Requirements 74
Chapter 9 Budget Department
9.1 Interested Parties 77
9.2 Guiding Principles 78
27. xxii
Manual of Standards for Management of Hospital Finance Service
PART CONTENTS PAGE
9.3 Duties and Responsibilities 78
9.4 Core Processes 80
9.5 Process Flow 83
9.6 Reportorial and Documentary Requirements 88
Chapter 10 Cash Operations Department
10.1 Interested Parties 90
10.2 Guiding Principles 91
10.3 Duties and Responsibilities 92
10.4 Core Processes 93
10.5 Process Flow 98
10.6 Reportorial and Documentary Requirements 104
Chapter 11 Billing and Claims Department
11.1 Interested Parties 105
11.2 Guiding Principles 106
11.3 Duties and Responsibilities 107
11.4 Core Processes 108
11.5 Process Flow 113
11.6 Reportorial and Documentary Requirements 117
Chapter 12
Financial Management System in Government-
Owned and Controlled Specialty Hospitals
12.1 Organizational Set-up 119
12.2 Finance Services Department 120
12.3 Interested Parties 121
12.4 Accounting Division 122
12.5 Billing and Claims Division 127
12.6 Budget Division 133
12.7 Cash Operation or Treasury Division 138
Chapter 13
Financial Management System in Local
Government Hospitals
13.1 Organizational Set-up 144
13.2 Financial Management System for Local
Hospitals
144
28. xxiii
Manual of Standards for Management of Hospital Finance Service
PART CONTENTS PAGE
13.3 Interested Parties 145
13.4 Core Processes and Process Flow 145
13.5 Reportorial and Documentary Requirements 152
PART III
Chapter 14
Good Governance and Social Responsibility in
Hospital Finance Service
14.1 Concepts and Principles 153
14.2 Good Governance in Finance Service for Public
Sector
156
14.3 Social Responsibility in the Hospital Finance
Service
158
14.4 Implementation of Universal Health Care Law 161
14.5 Institutionalization of Malasakit Centers and
Programs in the Hospitals
163
14.6 Declaration of the Rights of the Patients 165
Chapter 15 Revenue and Cost Management
15.1 Sources of Healthcare Funds 171
15.2 Cost Accounting and Management 172
Chapter 16 Quantified Free Services and Discounts
16.1 Quantified Free Service Defined 178
16.2 Purpose of Setting up the Quantified Free
Services
179
16.3 Computation of Quantified Free Services 180
16.4 Recording of Quantified Free Services 181
16.5 Policy Recommendations 182
16.6 Goals 183
Chapter 17 Financial Risk Management
17.1 Importance of Risk Management in Finance
Service
185
17.2 Basic Steps in Risk Management 186
17.3 Risk Management Plan 189
17.4 Challenges/Barriers of Risk Management 190
Chapter 18 Finance Service Continuous Quality Improvement
18.1 Framework 191
29. xxiv
Manual of Standards for Management of Hospital Finance Service
18.2 Performance Management 195
18.3 Performance Management: Strategies, Tools and
Approaches
196
18.4 Accreditation 200
PART CONTENTS PAGE
PART IV
A Glossary of Terms 205
B Appendices
B.1 Summary List of Accounting Books,
Registries, Records, Forms and Reports
216
B.2 Common Forms Used in Finance Service
(Samples)
B.2.1 Accounting Forms 227
B.2.2 Budget Forms 284
B.2.3 Cash Operations Forms 321
B.2.4 Billing, Claims and Other Forms 354
B.3 Finance Self-Assessment Tool
364
C Issuances
C.1 RA 11223 and its Implementing Rules and
Regulations
384
C.2 RA 11463 Malasakit Centers Act
402
C.3 COA Circular 2020-001 408
C.4 COA Circular 2004-007 411
C.5 Administrative Order No. 2020-0034 413
C.6 Reporting Tool of Financial Data on Revenues
and Expenses 426
30. Manual of Standards for Management of Hospital Finance Service 1
CHAPTER 1
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1.1 Background
With the financial challenges in managing hospital operations, the Department of Health
(DOH) recognized the need for more effective, efficient and transparent financial
management system for hospital administration, a system that will serve as enabling
mechanism for the DOH mandate of overseeing and coordinating the implementation of
the different programs of the hospital. Thus, the DOH through the Health Facility
Development Bureau (HFDB) issued Department Personnel Order (DPO) No. 2016-4941
in 2016, and created a Technical Working Group (TWG) composed of selected Financial
and Management Officers, Accountants, Administrative Officers (Budget Officers/Cash
Management Officer/Billing Officer), and other selected hospital finance management
officers to draft and formulate the Manual of Standards for Management of Hospital
Finance Service
In 1999, during the implementation of the Health Sector Reform Agenda. One of the
organizational changes identified was the institutionalization of Financial and Procurement
System. One of the strategy was the strengthening of the Hospital Financial System,
including separation of the Finance Service from the Administrative Service.
The Manual was once incorporated in the 2008 edition of the Manual of Organization and
Management of the Administrative and Finance Service for the Hospitals. However, in
2013 DOH and Department of Budget and Management (DBM) issued the Revised
Organizational Structure and Staffing Standards for Government Hospitals, wherein DOH
hospitals were restructured and a separate Finance Service (FS) was established.
Concomitantly, the need to establish a common standard for the finance management
system had been duly recognized with the implementation of the Quality Management
System (QMS) using ISO 9001 standards and application of the latest Commission on
Audit (COA) rules and regulations.
As basis, TWG reviewed and revisited the 2008 Manual vis-à-vis the latest issuances of the
DOH, DBM, COA, and other pertinent documents relevant to the current trends in hospital
administration and financial management system. These substantiated the contents of the
Manual of Standards for Management of Hospital Finance Service that the TWG
developed.
31. 2 Manual of Standards for Management of Hospital Finance Service
Introduction
1.2 Purpose and Intent
This Manual shall serve as reference and guide for hospital administrators, Financial and
Management Officers, and staff in the operations and management of hospitals with the
objective of ensuring the efficient and effective delivery of quality health care services. It
aims to provide a single and definitive source of the policies and procedures governing the
core processes involved in effectively and efficiently management of hospital resources
from its conceptualization to its termination.
Specifically, the Manual intends to:
1.2.1 Ensure compliance with laws, rules and regulations in financial transactions,
thereby, providing reasonable assurance that the hospital funds (from all
sources) are properly utilized;
1.2.2 Ensure strict adherence to the official documentary requirements relative to
key financial processes such as but not limited to:
1.2.2.1 Grant and liquidation of cash advances,
1.2.2.2 Post-Transaction Payments, and
1.2.2.3 Requisition, recording, monitoring, reconciliation and reporting of
Property, Plant and Equipment (PPE) and supplies;
1.2.3 Assist in complying with Audit Observation Memorandum (AOM) and
Notices of Suspension and Disallowances pertinent to rules and regulations
prescribed by COA;
1.2.4 Use as guides in the timely liquidation of cash advances and ensure reconciled
balances of supplies and PPE Accounts;
1.2.5 Guide all the interested parties in the financial processes in managing hospital
resources;
1.2.6 Identify the accountability, responsibility and obligation of all the finance and
hospital personnel in charge in the implementation of the processes described
herein; and
1.2.7 Identify and manage the financial risks that will affect the sustainability and
liquidity of the hospital.
The intent of this Manual is to facilitate improved financial decision-making by providing
the key officers and financial management staff with an “easy to understand” guide to the
basic principles of healthcare accounting, reimbursement, and finance.
This Manual shall include finance documentary reports, which can be used as reference as
it illustrates general points and principles.
32. Manual of Standards for Management of Hospital Finance Service 3
Introduction
1.3 Coverage of the Manual
This Manual shall cover all the major financial management processes including financial
policies and procedures applicable and necessary to the following offices under the FS in
the hospital setting:
1.3.1 Financial Management Officer: Head of the Finance Service
1.3.2 Accounting Department (AD)
1.3.3 Budget Department (BD)
1.3.4 Cash Operations Department (COD)
1.3.5 Billing and Claims Department (BCD)
The mandated functions of each department define the key financial processes that will be
discussed and presented in this Manual.
References shall be made to other related policies and procedures developed for the
processes in the other offices of the hospital, in particular, the procurement and human
resource development management processes.
1.4 Structure of the Manual
This Manual has been structured in a manner that will make it possible to be used as
reference to formulate amendments as and when required. In the discussion of the particular
section, it shall contain the following structure:
1.4.1 Policy Objective refers to the brief description of the primary purpose and
objectives of the specific office.
1.4.2 Policy Statement refers to the key guiding rules and principles relating to the
specific office.
1.4.3 Procedures refer to the particular office stating the step by step actions in
fulfilling the requirements of the policy statement.
1.4.4 Key Control Processes refer to the discussion of the policy framework,
processes and procedures, and applicable flowcharts indicating the line of
authority and level in the organization and the documentary requirements,
required for each office in the FS.
1.4.5 Responsibility Matrix shall provide the roles and responsibilities of the
different positions aligned in each office of the FS.
1.5 Contents of the Manual
This Manual shall be divided into three (3) parts containing major parts, as follows:
33. 4 Manual of Standards for Management of Hospital Finance Service
Introduction
Part I covers the introduction and discussion of the basic principles and concepts to be
used as basis for the implementation of an effective financial management in public
services. It shall include the following six (6) major chapters:
Chapter 1 shall cover the introduction stating the short background, coverage, structure,
contents, purpose and intent of the Manual.
In Chapters 2 and 3, the discussion covers the basic principles and concepts to be used as
basis in the implementation of an effective financial management in public healthcare
institutions. It shall include the following:
Overview covering the Statement of Vision, Mission, Objectives and Core Values
of the Department of Health and Finance Service; and
Legal framework, general policies and guiding principles in financial
management.
Chapters 4 and 5 illustrate the basic organizational structure for the Finance Service at all
levels of hospital service capability – Levels 1, 2 and 3. It also includes as reference the
space and equipment requirements to operate the different units under the FS.
Chapter 6 discusses the different roles, accountabilities and responsibilities of the FS in the
operations of the hospital. It also provides concepts and principles to effectively and
efficiently manage the Finance Service as to:
Responsibility, accountability and liability over Government funds and property;
Disbursement of public funds;
Benefits of and activities to achieve good financial management;
Integrative approach to financial management; and
Integration of financial management processes with critical hospital operations
processes
Part 2 covers the discussion of the functions, standard policies and procedures of the Core
Processes of the different departments/sections/units under the Finance Service; and the
Role of the Financial Management Officer II as Head of the Finance Service. It shall also
cover the chapter discussing the Finance Management System in Specialty Hospitals and
Local Government hospital:
Chapter 7 identifies the roles, duties and responsibilities of the Financial and Management
Officer II, or the head of the Finance Service, in the performance of their mandated
functions, by setting standard policies and procedures, and the strategic process map
indicating the general supervision of the different units under the Service.
Chapters 8, 9, 10 and 11 discuss and define the different functions, governing general
policies, interested parties (both internal and external), accountabilities, duties and
responsibilities, major core processes and the reportorial and documentary requirements of
the following departments under the FS: Accounting, Budget, Cash Operations, and Billing
and Claims.
34. Manual of Standards for Management of Hospital Finance Service 5
Introduction
Chapter 12 discusses the financial management system in Government Owned and
Controlled Specialty Hospitals. It also includes general policies, financial transaction flows
and processes including the system’s reportorial and documentary requirements.
Chapter 13 covers the discussion of the financial management system in hospitals under
the Local Government Units.
Part 3 shall provide the user with reference in handling the management and operation of
the Finance Service. It shall cover the discussion of concepts and principles in good
governance, social responsibility, performance based evaluation and financial risk
management. It also includes revenue and cost management, and quantified free services
and discounts to set a common standard in handling the resources of the hospital.
Chapter 14 discusses Good Governance and Social Responsibilities in Hospitals in
accordance with the DOH mandate and objectives in the implementation of Universal
Health Care in the Philippines.
Chapter 15 provides the guidelines, principles and formula in setting rates, cost
management and revenue enhancement for hospitals.
Chapter 16 discusses the purpose of setting up, computation and recording of Quantified
Free Services (QFS) and Discounts.
Chapter 17 identifies the common financial risks, risk management and its impact to
effectively and efficiently manage the Finance Service.
Chapter 18 discusses the strategies, tools and resources in establishing performance
management system in Finance Service and programs for Continuing Quality Improvement
of the Quality Management System as to processes in delivery of services.
In the Appendices, the following are included which can be used as reference of the user
of this Manual:
1) Glossary of Terms - common financial terms are defined based on the DBM and
COA standards
2) Illustrative Chart of Accounts
https://www.coa.gov.ph/phocadownload/userupload/Issuances/Circulars/Circ2020/
COA_C2020-001_Annexes/Annex_A-Vol_III_RCA.pdf
3) List of Book of Accounts
4) Common Forms Used based on GAM for NGAs
5) RA 11223 Otherwise known as Universal Health Care Act
6) RA 11463 Otherwise known as Malasakit Center Act
7) Other Pertinent issuances and references
35. 6 Manual of Standards for Management of Hospital Finance Service
CHAPTER 2
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2.1 The DOH Policy Framework
The Department of Health is the leading agency holding the over-all technical authority
on health as it is a national health policy-maker and regulatory institution. The DOH
plays three major roles in health sector, namely:
Leadership in Health
Enabler and capacity builder; and
Administrator of specific services.1
The DOH is also the provider of special tertiary health care services and technical
assistance to health providers and stakeholders.
The DOH has set the policy framework in setting the standards, policies, objectives and
plans, as follows:2
A. Vision – The DOH envisions “Filipinos as among the healthiest people in
Southeast Asia by 2022, and Asia by 2040”.
B. Mission – The DOH shall lead the country in the development of productive,
resilient, equitable and people-centered health system.
C. Core Values – The DOH shall embody at all times professionalism,
responsiveness, integrity, compassion and excellence in carrying out its tasks and
responsibilities.
D. Goals – The F1 + 1 for Health aims to ensure better health outcomes, a more
responsive health system, and a more equitable health care financing.
1 From the DOH Website
2
From AO No. 2018-0014 dated May 30, 2018
36. 7
Manual of Standards for Management of Hospital Finance Service
Hospital Finance Service: An Overview
E. Strategic Pillars – The DOH shall organize health sector initiatives into four (4)
pillars, namely: Financing, Service Delivery, Regulation, Governance, plus a
cross-cutting initiative on Performance Accountability.
DOH adheres to the highest values of work, and has adopted the following Core Values:
Professionalism – The DOH performs its functions in accordance with the
highest ethical standards, principles of accountability and full responsibility.
Responsiveness – The DOH provides accessible, affordable and quality health
care services to the public.
Integrity – The Department believes in upholding truth and pursuing honesty,
accountability and consistency in performing its functions.
Compassion and respect for human dignity – While DOH upholds the quality
of life, respect for human dignity is encouraged by working with sympathy and
benevolence for the people in need
Excellence – The DOH continuously strives for the best by fostering innovation,
effectiveness and efficiency, pro-action, dynamism and openness to change.
The DOH Four (4) Strategic Pillars have its own objectives, sub-pillars and key
interventions, as follows:
a. Strategic Pillar 1: Financing - The objective is to secure sustainable investments
to improve health outcomes and ensure efficient and equitable use of health
resources. It shall be governed with the following key interventions:
Efficiently mobilize and equitably distribute more resources for health
Rationalize health spending
Focus financial resources towards high impact interventions
b. Strategic Pillar 2: Service Delivery – The objective is to ensure the availability of
essential quality health products and services at appropriate levels of care. It shall
be governed with the following key interventions:
Increase access to quality essential health products and services
Ensure equitable access to quality health facilities
Ensure equitable distribution of human resources for health (HRH)
Engage Service Delivery Network (SDN) to deliver comprehensive
package of health services
c. Strategic Pillar 3: Regulation - The objective is to ensure high quality and
affordable health products, devices, facilities and services. It shall be governed
with the following key interventions:
Harmonize and streamline regulatory systems and processes
Develop innovative mechanism for equitable distribution of quality and
affordable health goods and services.
37. 8 Manual of Standards for Management of Hospital Finance Service
Hospital Finance Service: An Overview
d. Strategic Pillar 4: Governance – the governance pillar aims to strengthen
leadership and management capacities, coordination, and support mechanism
necessary to ensure functional, people-centered and participatory health systems.
It shall be governed with the following key interventions:
Strengthen sectoral leadership and management
Improve organizational development and performance
Improve processes for procurement and supply chain management to
ensure availability and quality of health commodities
Ensure generation and use of evidence in health policy development,
decision making and program planning and implementation
e. “PLUS” Performance Accountability across all pillars. The objective of the
Performance accountability is to use systems that would drive better execution of
policies and programs in the DOH while ensuring responsibility to all
stakeholders. It shall be governed with the following key interventions:
Institute transparency and accountability measures at all levels
Shift to outcome-based management approach
2.2 The Hospital Finance Service: Statement of Vision, Mission and Objectives
DOH together with the hospital administrators as policy makers acknowledge the
importance of strengthening the financial management systems in hospitals and other
healthcare facilities. One major strategy in this regard is the review of the organizational
structures of support services in the hospital setting.
Prior to the Revised Organizational Structure and Staffing Standards for Government
Hospitals, support services were directly supervised by the Administrative Service.
Different departments providing finance services – Accounting, Budget, Cash Operations
and Billing and Claims – reported directly to the head of the Administrative Service. With
the 2013 revision, the Finance Service (FS) was established as a separate division for
Level 3 hospitals.
The primary objectives in the establishment of a Finance Service in health care
institutions are:
Strengthen the capacity to effectively and efficiently manage public funds as
Stewards of Resources;
Be financially stable to sustain the implementation of the different programs
projects and activities; and
Ensure that the programs are within the bounds of laws and regulations.
The FS also aims to provide an effective financial management system in hospital
operations, providing leadership in delivering proactive financial services including sound
financial controls and effective and efficient use of resources.
38. 9
Manual of Standards for Management of Hospital Finance Service
Hospital Finance Service: An Overview
The FS shall be recognized as an integral component in the healthcare organization
providing the highest level of service consistent with the local and international standards,
statutory laws and regulations. Thus, the Finance Service envisioned:
“To be Recognized as an Excellent Provider of Finance Services to the Health
Care Institution, Compliant to Local and International Financial Standards”
For its mission, the FS aims for the provision of the following:
Effective, efficient and transparent financial support services;
Appropriate, accurate and reliable financial reports compliant to local and
international standards; and
Proactive continuing professional development and capacity building to develop
the competency of finance personnel.
The FS’s Shared Core Values shall be:
I INTEGRITY
A ACCOUNTABILITY
C COMPETENCY
C CUSTOMER DRIVEN
T TRANSPARENCY
To realize the vision-mission, the Service shall nurture these values through:
P
Provide valued service to customers, stakeholders and other interested parties in
courteous and responsive manner
R Respect beliefs and values of others in service delivery
O Optimize the use of resources through responsible stewardship
V Value all employees through empowerment, development and recognition
I Instill accountability and sustainability in using resources
D Direct openness and transparency in all its dealings and operations
E
Espouse the virtues of truth, integrity, honesty, tolerance, competence and
professionalism
R
Reinforce and strengthen teamwork and meritocracy
39. 10 Manual of Standards for Management of Hospital Finance Service
Hospital Finance Service: An Overview
Financial management is more than just keeping accounting records. It is an essential part
of organizational management, and it can neither be seen as a separate task nor a mere
minor function performed by a small group. Financial management involves planning,
organizing, controlling and monitoring of financial resources in order to achieve the
quality objectives set by any organization, and it involves a range of financial tactics and
strategies.
Sound financial management shall involve medium to long-term strategic planning and
short-term operations planning. Effective financial management results from a sound
organizational plan, which addresses a well-defined set of objectives agreed, developed,
evaluated and cascaded to all the interested parties of the organization.
40. Manual of Standards for Management of Hospital Finance Service 11
CHAPTER 3
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3.1 General Policies on Government Financial Management System
This Manual shall be guided with the relevant legal framework covering government
financial management systems. The hospital’s Finance Service shall be guided by the
Philippine Constitution as well as by principles, specifically those by the COA, such as but
not limited to COA Circulars, the GAM for NGAs, the DBM and its budget circulars, the
General Appropriations Act for the fiscal year, and other special laws issued by the CSC,
the DOH, and other government agencies.
As a general rule, management of government finances is governed by Section 29, Article
VI of the Philippine Constitution: “No money shall be paid out of the Treasury except in
pursuance of an appropriation made by law.”1
All laws, rules and regulations issued by
implementing bodies strictly adhere to this Constitutional provision.
This Constitutional provision also establishes the need for all government entities to
undergo the budgeting process, including budget legislation, to secure funds needed to
carry out their mandate and to implement their programs, activities and projects (P/A/Ps)
accordingly. Section 32 of the Administrative Code of the Philippines states that, “All
moneys appropriated for functions, activities, projects and programs shall be available
solely for the specific purposes for which these are appropriated.”2
This emphasizes the
need for judicious planning of P/A/Ps and for establishing strong financial controls to
ensure that funds are made available solely for the duly approved P/A/Ps.
Section 2 of Presidential Decree (P.D.) No. 1445 (Government Auditing Code of the
Philippines) states that, “All resources of the government shall be managed, expended or
utilized in accordance with laws and regulations, and safeguarded against loss or wastage
through illegal and improper disposition, with a view to ensuring efficiency, economy and
effectiveness in the operations of government. The responsibility to ensure that such policy
1
From the 1987 Constitution of the Philippines
2
From the Administrative Code of the Philippines
41. 12 Manual of Standards for Management of Hospital Finance Service
Legal Framework, General Policies and Guiding Principles
is faithfully adhered with rests directly with the chief or head of the government agency
concerned.”3
To strictly adhere to the foregoing stated policies, Section 5, Chapter 2 (General Provisions,
Basic Standards and Policies) of GAM for NGAs also provides the fundamental principles
as promulgated under Section 4 of PD 1445, Government Auditing Code of the Philippines,
to be strictly adhered to by Finance Service staff and those implementing the P/A/Ps, to
wit:
3.1.1 No money shall be paid out of public treasury or depository except in pursuance
of an appropriation law or other specific statutory authority.
3.1.2 Government funds or property shall be spent or used solely for public purposes.
3.1.3 Trust funds shall be available and may be spent only for the specific purpose for
which the trust fund was created or the funds received
3.1.4 Fiscal responsibility shall, to the greatest extent, be shared by all those
exercising authority over the financial affairs, transactions and operations of the
government agency.
3.1.5 Disbursements or dispositions of government funds or property shall invariably
bear the approval of the proper officials or person in authority.
3.1.6 Claims against government funds shall be supported with complete
documentation.
3.1.7 All laws and regulations applicable to financial transactions shall be strictly
adhered to.
3.1.8 Generally accepted principles and practices of accounting as well as of sound
management and fiscal administration shall be observed, provided that they do
not contravene to existing laws and regulations.4
The GAM for NGAs is prescribed by COA pursuant to Article IX-D, Section 2 par. (2) of
the 1987 Constitution: “The Commission on Audit shall have exclusive authority, subject
to the limitations in this Article, to define the scope of its audit and examination, establish
the techniques and methods required therefor, and promulgate accounting and auditing
rules and regulations, including those for the prevention and disallowance of irregular,
unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of
government funds and properties”.5
(Chapter 1, Section 1, GAM for NGAs)
3
Section 2, Auditing Code of the Philippines, Presidential Decree No. 1445
4
From the Government Accounting Manual
5
From the 1987 Constitution, as cited from the Government Accounting Manual
42. Manual of Standards for Management of Hospital Finance Service 13
Legal Framework, General Policies and Guiding Principles
3.2 Guiding Principles in Government Accounting
Section 3, Chapter 2 of the GAM for NGAs provides the Responsibility, Accountability
and Liability (RAL) over government funds and property, and the following are specifically
stated therein:
3.2.1 Responsibility over Government Funds and Property
3.2.1.1 It is the declared policy of the State that all resources of the government
shall be managed, expended or utilized in accordance with laws and
regulations, and safeguarded against loss or wastage through illegal or
improper disposition, with a view to ensuring efficiency, economy and
effectiveness in the operations of government. The responsibility to take
care that such policy is faithfully adhered to rests directly with the chief
or head of the government agency concerned. (Sec. 2, P.D. No. 1445)
3.2.1.2 Fiscal responsibility shall, to the greatest extent, be shared by all those
exercising authority over the financial affairs, transactions, and
operations of the government agency. (Sec. 4(4), P.D. No. 1445)
3.2.1.3 The head of any agency of the government is immediately and primarily
responsible for all government funds and property pertaining to his
agency. Persons entrusted with the possession or custody of the funds or
property under the agency head shall be immediately responsible to him,
without prejudice to the liability of either party to the government. (Sec.
102, P.D. No. 1445)
3.2.2 Accountability over Government Funds and Property
3.2.2.1 Every officer of any government agency whose duties permit or require
the possession or custody of government funds or property shall be
accountable therefor and for the safekeeping thereof in conformity with
law. Every AO shall be properly bonded in accordance with law. (Sec.
101, P.D. No. 1445; Section 50, Chapter 9, Subtitle B, Book V,
Executive Order (E.O.) No. 292)
3.2.2.2 Transfer of government funds from one officer to another shall, except
as allowed by law or regulation, be made only upon prior direction or
authorization of the Commission or its representative. (Sec. 75, P.D. No.
1445)
3.2.2.3 When government funds or property are transferred from one AO to
another, or from an outgoing officer to his successor, it shall be done
upon properly itemized invoice and receipt which shall invariably
support the clearance to be issued to the relieved or outgoing officer,
subject to regulations of the Commission. (Sec. 77, P.D. No. 1445)
43. 14 Manual of Standards for Management of Hospital Finance Service
Legal Framework, General Policies and Guiding Principles
3.2.3 Liability over Government Funds and Property
3.2.3.1 Expenditures of government funds or uses of government property in
violation of law or regulations shall be a personal liability of the official
or employee found to be directly responsible therefor. (Sec. 103, P.D.
No. 1445)
3.2.3.2 Every officer accountable for government funds shall be liable for all
losses resulting from the unlawful deposit, use, or application thereof
and for all losses attributable to negligence in the keeping of the funds.
(Sec. 105(2), P.D. No. 1445)
3.2.3.3 No Accountable Officer shall be relieved from liability by reason of his
having acted under the direction of a superior officer in paying out,
applying, or disposing of the funds or property with which he is
chargeable, unless prior to that act, he notified the superior officer in
writing of the illegality of the payment, application, or disposition. The
officer directing any illegal payment or disposition of the funds or
property shall be primarily liable for the loss, while the Accountable
Officer who fails to serve the required notice shall be secondarily liable.
(Section 106, P.D. No. 1445)
3.2.3.4 When a loss of government funds or property occurs while they are in
transit or the loss is caused by fire, theft, or other casualty or force
majeure, the officer accountable therefor or having custody thereof shall
immediately notify the Commission or the auditor concerned and, within
30 days or such longer period as the Commission or auditor may in the
particular case allow, shall present his application for relief, with the
available supporting evidence. Whenever warranted by the evidence,
credit for the loss shall be allowed. An officer who fails to comply with
this requirement shall not be relieved of liability or allowed credit for
any loss in the settlement of his accounts. (Sec. 73, P.D. No. 1445)
3.2.4 Proper Management of Revenues
Finances are not merely focused on monitoring the utilization of released funds, but they
also involve the proper management of revenues. Section 4, Chapter 2 of the GAM for
NGAs provides the following fundamental principles to govern all revenues accruing to
NGAs.
3.2.4.1 Unless otherwise specifically provided by law, all revenues accruing to an entity
by virtue of the provisions of existing law, orders and regulations shall be
deposited/remitted in the National Treasury (NT) or in any duly authorized
government depository, and shall accrue to the General Fund (GF) of the NG. (Sec.
65(1), P.D. No. 1445)
44. Manual of Standards for Management of Hospital Finance Service 15
Legal Framework, General Policies and Guiding Principles
3.2.4.2 Except as may otherwise be specifically provided by law or competent authority,
all moneys and property officially received by a public officer in any capacity or
upon any occasion must be accounted for as government funds and government
property. (Sec. 42, Chapter 7, Title I(B), Book V, E.O. No. 292)
3.2.4.3 Amounts received in trust and from business-type activities of government may
be separately recorded and disbursed in accordance with such rules and regulations
as may be determined by a Permanent Committee composed of the Secretary of
Finance as Chairman, and the Secretary of Budget and Management and the
Chairman, COA, as members. (Sec. 65(2), P.D. No. 1445)
3.2.4.4 Receipts shall be recorded as revenue of Special, Fiduciary or Trust Funds or
Funds other than the GF, only when authorized by law as implemented by rules
and regulations issued by the Permanent Committee. (Sec. 66, P.D. No. 1445)
3.2.4.5 No payment of any nature shall be received by a collecting officer without
immediately issuing an official receipt in acknowledgement thereof. The receipt
may be in the form of postage, internal revenue or documentary stamps and the
like, officially numbered receipts, subject to proper custody, accountability, and
audit. (Sec. 68(1), P.D. No. 1445)
3.2.4.6 Where mechanical devices (e.g. electronic official receipt) are used to
acknowledge cash receipts, the COA may approve, upon request, exemption from
the use of accountable forms. (Sec. 68 (2), P.D. No. 1445)
3.2.4.7 At no instance shall temporary receipts be issued to acknowledge the receipt of
public funds. (Sec. 72, GAAM Volume I)
3.2.4.8 Pre-numbered ORs shall be issued in strict numerical sequence. All copies of each
receipt shall be exact copies or carbon reproduction in all respects of the original.
(Sec. 73, GAAM Volume I)
3.2.4.9 An officer charged with the collection of revenue or the receiving of moneys
payable to the government shall accept payment for taxes, dues or other
indebtedness to the government in the form of checks issued in payment of
government obligations, upon proper endorsement and identification of the payee
or endorsee. Checks drawn in favor of the government in payment of any such
indebtedness shall likewise be accepted by the officer concerned. At no instance
should money in the hands of the CO be utilized for the purpose of cashing private
checks. (Sec. 67(1) and (3), P.D. No. 1445)
3.2.4.10 Under such rules and regulations as the COA and the Department of Finance
(DOF) may prescribe, the Treasurer of the Philippines and all AGDB shall
acknowledge receipt of all funds received by them, the acknowledgement bearing
the date of actual remittance or deposit and indicating from whom and on what
account it was received. (Sec. 70, P.D. No. 1445)
45. 16 Manual of Standards for Management of Hospital Finance Service
Legal Framework, General Policies and Guiding Principles
3.2.5 Hospital Income Retention
DOH, DOF and DBM Joint Circular No. 2003-1, “Guidelines on the Retention and Use of
Hospital Income” provides that all national government hospitals under the DOH shall be
authorized to retain and utilize their income provided that no amount of said income shall
be used for the payment of salaries and other allowances.
Other specific general policies as stated in the GAM for NGAs governing the policy
framework, processes, policies and procedures of the different departments under the
Finance Service shall be discussed in the succeeding chapters.
46. Manual of Standards for Management of Hospital Finance Service 17
CHAPTER 4
4.1 Organizational Structure
Joint Circular No. 2013-1 dated September 23, 2013 between the DBM and the DOH,
prescribed the revised standards on organizational structure and staffing pattern of
government hospitals. The Circular covered only government general hospitals classified
by DOH as Level 1, Level 2 and Level 3, excluding Special Hospitals or other health
facilities per DOH Administrative Order No. 2012-0012, “Rules and Regulations
Governing the New Classification of Hospitals and Other Health Facilities in the
Philippines.” It provided the framework for categorization of hospitals as basis in
determining the number and levels of positions appropriate for each hospital capability
level and bed capacity.
Level 1 and Level 2 hospitals have four basic organizational units: Office of the Chief of
Hospital, Medical Service, Nursing Service, and Hospital Operations and Patient Support
Service (HOPSS). Internal management functions are combined under one organizational
unit, the HOPSS, which subsumes both administrative and finance services.
A Level 3 hospital shall be provided with an additional division-level entity, the Finance
Service, to handle accounting, budgeting, billing and claims and cash operations. Given the
need to attain financial sustainability of hospitals, Finance Service shall be tasked to
improve revenue generating capacity and to seek and focus on optimal financing, allocation
and control of all resources of the healthcare organization.
For clear distinction, illustration of organizational structure is presented for each different
level of hospitals.
47. 18 Manual of Standards for Management of Hospital Finance Service
Finance Service Organizational Structure and Staffing Requirements
4.1.1 Level 1 Hospital with 25-, 50- and 75-Bed Capacity
The Organizational Structure of the HOPSS for Level 1, as shown in Figure 1.1, showed
that the supervision of the finance service departments, Accounting, Budget, Billing and
Claims and Cash Operations is under the Head of HOPSS.
Figure 1.1 - Basic Organizational Structure for Level 1 Hospital
48. Manual of Standards for Management of Hospital Finance Service 19
Finance Service Organizational Structure and Staffing Requirements
The minimum Administrative and Finance functions as shown in Figure 1.2 performed in
a Level 1 hospital are usually done by a single unit. Usually, the flow of transactions for
this type of hospital is governed by the Local Government Code of the Philippines.
However, Level 1 retained hospitals under the supervision of the DOH Regional Office,
shall follow the finance transactional flow issued for national government.
Figure 1.2 - Organizational Structure for HOPSS in a Level 1 Hospital
49. 20 Manual of Standards for Management of Hospital Finance Service
Finance Service Organizational Structure and Staffing Requirements
4.1.2 Level 2 Hospitals with 100-, 150- and 200-Bed Capacity
For Level 2, there are also three major services similar to Level 1 Hospitals as
shown in Figure No. 1.3.
For Level 2 hospitals under the Local Chief Executives (LCE) of cities and provinces, the
supervision of the Finance Service remains under the Head of the HOPSS or a designated
unit by the LCE. For DOH-retained Level 2 hospitals, direct supervision is under the DOH
Regional Office and shall follow the financial transactional flow issued for national
government.
Figure 1.3 - Basic Organizational Structure for Level 2 Hospital
Office of the Medical
Center Chief
Integrated Hospital
Operations &
Management Program
Medical Service Nursing Service
Hospital Operation &
Patient Support
Service
50. Manual of Standards for Management of Hospital Finance Service 21
Finance Service Organizational Structure and Staffing Requirements
As shown in Figure 1.4, the supervision of the Accounting, Billing and Claims, Budget,
and Cash Operations for Level 2 hospitals is still under the Head of the HOPSS.
Figure 1.4 - Organizational Structure for HOPSS in Level 2 Hospital
51. 22 Manual of Standards for Management of Hospital Finance Service
Finance Service Organizational Structure and Staffing Requirements
4.1.3 Level 3 Hospitals with 200-, 300-, 400- and 500-Bed Capacity
The basic organizational standard was modified to showcase the distinction of
the major role of the Administrative Management Functions as implemented by
HOPSS and the Finance Management Functions as implemented by FS.
Finance Service has been created to form part of the basic organizational
structure, as shown in Figure 1.5.
Figure 1.5 - Basic Organizational Structure for Level 3 Hospital
Office of the Medical
Center Chief
Integrated Hospital
Operations &
Management Program
Professional, Educational
and Training
Medical Nursing
Non-Medical
Medical Service Nursing Service
Hospital Operation
& Patient Support
Service
Finance Service
52. Manual of Standards for Management of Hospital Finance Service 23
Finance Service Organizational Structure and Staffing Requirements
The supervision of the Finance Service in Level 3 hospitals shall be under the FMO II, for
National Government Hospitals or designated Officers for Local Government Hospitals.
The proposed organizational structure for FS in Level 3 hospital shall be:
Figure 1.6 - Organizational Structure for FS in Level 3 Hospital
Figure 1.7 - Proposed Organizational Structure for FS in Level 3 Hospital
53. 24 Manual of Standards for Management of Hospital Finance Service
Finance Service Organizational Structure and Staffing Requirements
It shall be applicable for Level 3 hospitals either as teaching and training or as a medical
center. Each department shall be further sub-divided into several units/sections based on
its nature, functions and relationship within the hospital set-up and operation.
4.2 Human Resource in the Finance Service
DBM-DOH Joint Circular No. 2013-1 provided the standard staffing requirement for
general hospitals. Guidelines in the staffing pattern for the FS are determined based on the
assigned classification, bed capacity and organizational structure, as follows:
4.2.1 The number and level of positions prescribed for each hospital category shall
be the maximum that will be allowed for the various organizational units.
However, hospitals may adopt a lesser number and lower levels of positions
and/or merge different staff offices in the internal management and support
units, depending on their financial capability.
4.2.2 Hospitals that qualify for the next higher category shall adopt the corresponding
Organizational Structure and Staffing Pattern (OSSP) herein prescribed.
However, the hospital management has the option to adopt a leaner OSSP by
merging the prescribed organizational units or using lower-level positions. If
the authorized bed capacity of a hospital falls between two of the specified bed
capacities in the standard staffing pattern, the higher set of standards shall be
applied if the number of beds is in excess of one half of their difference.
4.2.3 In addition to the hospital administrator, there will be required assistants, clerks,
bookkeepers, cooks, engineers, attendants, nurse aide, orderlies, janitors,
maintenance crew and others so that the total hospital personnel shall be
approximately be two and one half for each occupied bed.
4.2.4 Staffing Requirements
It was concurred that pending the approval of the submitted proposed standard
staffing pattern for the FS, the ideal number of staff to respond to expanding
needs in providing quality service has been indicated as below.
54. Manual of Standards for Management of Hospital Finance Service 25
Finance Service Organizational Structure and Staffing Requirements
Table 1: Proposed Standard Staffing Pattern for Finance Service
55. 26 Manual of Standards for Management of Hospital Finance Service
Finance Service Organizational Structure and Staffing Requirements
4.2.5 Eligibility and Competency Requirements
In levelling up the quality of performance in all the units under the Finance
Service, the qualification standards and level of competence required shall be
as follows:
Table 2: Qualification Standards and Level of Competence Required
56. Manual of Standards for Management of Hospital Finance Service 27
Finance Service Organizational Structure and Staffing Requirements
Table 2: Qualification Standards and Level of Competence Required
57. 28 Manual of Standards for Management of Hospital Finance Service
Finance Service Organizational Structure and Staffing Requirements
Table 2: Qualification Standards and Level of Competence Required
58. 29
Manual of Standards for Management of Hospital Finance Service
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5.1 Applicable Laws, Rules and Regulations
Some of the Finance Service Departments are providing direct frontline services to
external clients. These are the Billing and Claims, and Cash Operations. There is also
a direct interface with the different units in the hospital. In order to provide an
effective, accurate, timely and efficient services to external clients, the space to be
provided to the frontline services department shall be accessible and near the other
frontline services of the hospital.
Hospitals and other health facilities shall be planned and designed to observe
appropriate architectural standards, to meet prescribed functional requirements, and to
conform to applicable codes as part of normal professional practice. References shall
be made to the following:
5.1.1 P. D. 1096 – National Building Code of the Philippines and its
Implementing Rules and Regulations
5.1.2 P. D. 1185 – Fire Code of the Philippines and Its Implementing Rules
and Regulations
5.1.3 P. D. 856 – Code on Sanitation of the Philippines and Its Implementing
Rules and Regulations
5.1.4 B. P. Blg. 344 – Accessibility Law and Its Implementing Rules and
Regulations
5.1.5 R. A. 1378 – National Plumbing Code of the Philippines and Its
Implementing Rules and Regulations
59. 30
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Manual of Standards for Management of Hospital Finance Service
5.1.6 R. A. 184 – Philippine Electrical Code and Its Implementing Rules and
Regulations
5.1.7 Manual on Technical Guidelines for Hospitals and Health Facilities
Planning and Design. Department of Health, Manila, 1994 with updated
edition for 250-Bed Level 3 Hospital, 2017
5.1.8 Signage Systems Manual for Hospitals and Offices. Department of
Health, Manila. 1994
5.1.9 Health Facilities Maintenance Manual. Department of Health, Manila.
1995
5.1.10 Manual on Hospital Waste Management. Department of Health, Manila.
Revised 2013
5.1.11 RA 10070 – An Act Establishing an Institutional Mechanism to Ensure
the Implementation of Programs and Services for Persons with
Disabilities in Every Province, City and Municipality, amending
Republic Act 7277, otherwise known as the “Magna Carta for Disabled
Persons, as amended and for other Purposes.
5.1.12 National Structural Code of the Philippines 2015 and Its Implementing
Rules and Regulations
5.1.13 RA 4226 - Hospital Licensure Act and its Amendments and
Implementing Rules and Regulations
5.1.14 Administrative Order No. 2012-0012 dated July 18, 2012 – Rules and
Regulations Governing the New Classification of Hospitals and Other
Health Facilities in the Philippines, as amended
60. 31
Space and Equipment Requirements
Manual of Standards for Management of Hospital Finance Service
5.2 Standard Space Requirements
In the planning and design of a Hospital and other health facilities, the following shall
be observed:
5.2.1 A hospital and other healthcare facilities shall provide and maintain a safe
environment for patients, personnel and the general public. The building shall
be of such construction so that no hazards to the life and safety of patients,
personnel and public exist. It shall be capable of withstanding weight and
elements to which they may be subjected.
5.2.2 Interconnectivity of frontline services shall provide the clients with a one-stop
shop traffic flow. A business center comprising of the billing and claims,
cashier, medical social service, admitting departments would be ideal to allow
for a more efficient process flow of transactions among departments.
5.2.3 There shall be effective visual aids (e.g. citizen’s charter) and devices (e.g.
queuing system) arranged to provide information, orientation, direction,
identification, prohibition, warning and official notice considered essential to
the optimum operation of a hospital and other health facilities.
5.2.4 For business offices, the required space area shall be 5.02 sq. m /staff. Work
area per staff includes space for one desk and one chair and allocable space for
common area (ex. reception area, pantry, comfort room and records/storage
area). (Source: Guidelines in the Planning and Design of a Hospital and other
Health Facilities 2004).
61. 32
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Manual of Standards for Management of Hospital Finance Service
For illustration, refer to the diagrams as follows:
62. 33
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Manual of Standards for Management of Hospital Finance Service
63. 34
Space and Equipment Requirements
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64. 35
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65. 36
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Manual of Standards for Management of Hospital Finance Service
66. 37
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Manual of Standards for Management of Hospital Finance Service
5.3 Equipment Requirements
There are basic equipment requirements based on the service capability of the
different departments under the Finance Service. The requirements for finance service
and its sub-units may vary depending on the levels of the hospital. Below are the lists
of basic equipment.
5.3.1 Information and Communication Technology (ICT) Equipment / Semi
Expendable Office Equipment
5.3.1.1 Computer unit with UPS, printer and bundled with latest version of
Operating System (OS) software
5.3.1.2 Computer server (File and Web) bundled with latest operating system
software
5.3.1.3 ENGAS Operating System
5.3.1.4 Laptop/Notebook computer and LCD projector and monitor for multi-
media presentation
5.3.1.5 Video/digital camera for documentation
5.3.1.6 Audio Visual System for training/public health information
5.3.1.7 Closed Circuit Television (CCTV) system
5.3.1.8 Queue Management Device System for frontline services (Cashier
and Billing)
5.3.1.9 Telecommunication System both Local Area Network (LAN) and
external network system
5.3.1.10 Other IT devices and peripherals
5.3.2. Office Equipment / Semi Expendable office equipment
5.3.2.1 Typewriter
5.3.2.2 Calculator/Adding machine
5.3.2.3 Duplicating Machine/Photocopier
67. 38
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Manual of Standards for Management of Hospital Finance Service
5.3.2.4 Fax Machine
5.3.2.5 White Board/Cord Board
5.3.2.6 Multi-purpose Scanner with feeder
5.3.2.7 Paper Shredder
5.3.2.8 Barcode Scanner/Reader
5.3.2.9 Counting Machine/Money Counterfeit Detector
5.3.2.10 Cash Register
5.3.2.11 Biometric Attendance System
5.3.3. Furniture and Fixtures / Semi Expendable office equipment
5.3.3.1 Office Table (executive, managerial and clerical)
5.3.3.2 Chair (executive, managerial and clerical)
5.3.3.3 Computer Table (dual for computer and printer)
5.3.3.4 Computer Chair
5.3.3.5 Filing Cabinet (open shelves and cabinet type -4-5 layers)
5.3.3.6 Conference Table and Chairs
5.3.3.7 Air-conditioning /Ventilation units (electric fan and exhaust fans)
5.3.3.8 Cash Vault (size depending on capacity) in all designated collection
section/units
5.3.3.9 Push Cart
5.3.3.10 Ladder (adjustable)
5.3.3.11 Emergency lights
5.3.3.12 Fire Extinguisher (based on BFP requirements)
5.3.3.13 Signages
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Manual of Standards for Management of Hospital Finance Service
CHAPTER 6
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Finance Service is one of the major systems in the hospital administration and
operation. The system is being performed by four major departments namely
Accounting, Budget, Billing and Claims and Cash Operation, each with its own set of
objectives, functions, policies, and procedures. The level of support services varies
based on the level of category of the hospital.
Financial management in a hospital setting is the process of seeking the optimal
financing, allocation, and control of all resources of the healthcare organization. It is
through the accumulation of financial data and its results, the month-end and year-end
accounting and statistical reports are prepared. Financial reports and statements are
useful in planning, organizing, directing and controlling the activities of any
organization.
6.1 Major Key Roles of Financial Service in Hospital Operation
6.1.1 Financial Accounting – to provide summary accounts to top
management, external users and regulatory bodies. It involves the
recording of all monetary transactions and the production of summary
financial statements that reflect the performance and financial status of
the organization. The Accounting Department is primarily responsible
for Financial Accounting.
6.1.2 Cost Accounting - to provide data for effective budget planning and
projection of short, medium and long term plans. It involves detailed
analysis on suitable cost drivers and evaluation of costs incurred in
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Finance Services Roles, Accountability and Responsibilities
Manual of Standards for Management of Hospital Finance Service
relations to activities conducted. It also involves the defining of costs as
direct materials, direct labor, fixed overhead, variable overhead and
period costs. It entails the setting of equitable rates for all the services
provided in the hospital.
6.1.3 Management Accounting – to provide financial information internally to
top management for an effective and efficient decision making and
strategic planning to achieve the set goals and objectives. This includes
budgets and plans, costing and financial appraisal of programs and
activities.
6.1.4 Financial Resources Management – to ensure the organization has
adequate funds and resources to meet all of its current obligations and
financially support future plans and programs. It includes the sourcing of
funds to meet the organization’s needs. It shall also involve planning for
long-term capital requirements – such as, new facilities and equipment –
and deciding on capital investments and how they should be financed.
6.1.5 Risk Management – to identify related risks that arise from operation and
clinical activities. Internal controls are used to analyze, manage and
mitigate risk.
6.2 Key Responsibilities of Finance Service
The primary role of financial management in any healthcare organization is to manage
financial resources and risks in a way that helps to achieve the financial goals of the
hospital. If the institution has a strong and organized financial management plans,
they are able to provide efficient and quality healthcare service to all their patients.
The basic activities involved in financial management in any healthcare organizations
include the following core processes:
6.2.1 Financial Planning Process - Financial Planning is the process of evaluating
and managing utilization of financial resources optimally for the achievement
of the organization’s goals and objectives. Burden with limited resources,
sound budgeting and financial planning in healthcare organizations is crucial to
maintain the standard of cares and sustain operations. (Source: Financial
Management for Hospital Administration, GR Kulkami, et al, 2009)
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Finance Services Roles, Accountability and Responsibilities
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Comparative Benchmarks - Benchmarking is a process of learning good
practices from other organizations, implementing the practices and
setting measurable standards to track progress. Regular reviews will
enable the Top Management to identify opportunities for savings and
ways to fill budget gaps.
Accurate and High Performing Budgeting - Setting of budget for each
department shall be based on benchmarks and past performance. Low
performing departments may be given targeted cost per workloads goals
and be evaluated more often to monitor improvements.
Establishing Accountability - Setting clear objectives and identifying
person responsible in achieving the targets shall instill accountability into
the process. Improving financial planning means that each department is
required to meet its target within the allotted budget and be actively
involved in tracking the progress of any given program or activity.
Monitoring Variances and Achieving Balances - By tracking the
expenses during the implementation of programs, immediate corrective
actions can be taken to noted variances before cost centers get out of
control. While reducing costs is a primary objective, delivery of quality
healthcare services and continually improving quality, customer’s
satisfaction and employees’ fulfillment shall not be taken for granted.
For example, if incurred expenses suddenly increase for an outsourced like
CT-Scan/MRI, the management may decide to plan for the hospital’s
expansion of services and invest in procuring the equipment required to do
the procedure. Considering that this plan entails a long-term investment
decision, thorough analysis and feasibility study are necessary. Will the
procurement of CT-Scan/MRI equipment be the right solution? Will this
increase the hospital’s income, or will this eat up the hospital’s budget for
its operating costs? Cost benefit analysis of the gains and losses shall be
done based on the budget available in the hospital’s coffer. The
management may adopt an alternative way of having this diagnostic
procedure available in the hospital, looking at other outsourcing
arrangements in the end.
6.2.2 Financial Risk Management – this comprises the clinical and administrative
systems, processes and reports employed to detect, monitor, assess, mitigate,
and prevent risks. By employing risk management, the healthcare organization
can ensure patient safety; reduce medical errors that may jeopardize the
hospital’s ability to achieve its mission and protect the hospital against any
financial liability. The head of Finance Service shall be responsible in
managing and mitigating financial risks from occurrence.
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Finance Services Roles, Accountability and Responsibilities
Manual of Standards for Management of Hospital Finance Service
6.2.3 Financial Decision Making. Financial analysis is part of the financial
decision making process. It may involve analyzing of financial problems that
the hospital faces and deciding which course of action should be taken. When
making financial decisions, the head of FS shall take into consideration the
following elements:
Nature and riskiness of the business operation
Capital structure desired
Length of time the assets will be needed
Cost of alternative financing
Availability of resources and its prioritization
6.3 Public Accountability and Stewardship in the Finance Service
The Finance Service processes shall be guided with all the laws, rules and
regulations issued by implementing bodies shall strictly have adhered thereto.
Cognizant with the well-established tenet, “Public office is a Public Trust”, the
Department of Health is committed to promoting the highest level of
responsibility and accountability among its officials and personnel by ensuring
among others responsible stewardship of public resources. Finance Service
ensures that said thrust be properly implemented and monitored.
Public accountability and stewardship require that expenditure incurred and
revenues received be classified, accounted for and reported upon in the same way
as they were initially authorized. This is achieved through the preparation of
financial statements using the same classification and format as the Annual
Estimates. However, in addition, Management should be able to monitor actual
performance, detect variations from plans, and take corrective action to achieve
the intended results. This can only be achieved with the development and use of
management accounting and management information.
Healthcare Institution with an effective and organized financial management plan
shall be able to provide efficient and quality healthcare to its patients.
The works of Finance Service shall be guided by:
The existing government budgeting, accounting and auditing rules and
regulations shall govern the financial transactions and operations of the hospital.
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The highest standard of honesty, objectivity and consistency shall be observed
in keeping the Books of Accounts.
The existing government directives on patient’s rights, benefits and privileges,
whenever applicable, shall be incorporated in the patient’s billing and claims.
Cash flow shall be properly monitored to alert management of the available
money to sustain hospital operation.
The legal framework, general policies and guiding principles are discussed in Chapter
3 of this Manual.
6.4 Process Approach in Finance Service
Finance Service has established its Strategic Process Map indicating the
interrelationship of processes to meet the customer’s requirements. The process
as defined in the standards set in ISO 9001:2015 refers to the set of interrelated or
interacting activities that use inputs to deliver an intended result.
Each department under Finance Service has its respective mandated functions.
The process approach includes establishing the organization’s processes to
operate as an integrated and complete system. (Source: ISO Whitepaper: The
Process Approach in ISO 9001:2015 involves:
6.4.1 The management system integrates processes and measures to meet
objectives.
6.4.2 Processes define interrelated activities and checks, to deliver intended
outputs.
6.4.3 Detailed planning and controls can be defined and documented as
needed, depending on the organization’s context.
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Finance Services Roles, Accountability and Responsibilities
Manual of Standards for Management of Hospital Finance Service
To illustrate:
ACCOUNTING
DEPARTMENT
Hospital Core Process
BUDGET
DEPARTMENT
Customer
Requirements
BILLING AND
CLAIMS
DEPARTMENT
CASH
OPERATIONS
DEPARTMENT
FINANCE
SERVICE
Internal Support Services
MMD, EFMD,
Procurement, HRM,
HRD, General Services,
IHOMU
Customer
Satisfaction
Continual Quality Improvement
Process
Internal Audit/Management
Review
Budget
Planning,
Allotment.
Obligation,
Monitoring
and Control
Processing of
SOA,
PhilHealth and
other Claims,
Credit and
Collection
Collection and
Disbursement
Processing of
Payments.
Financial
Statements and
other financial
reports
Internal
Clients:
Hospital
Employees
External
Clients:
Patients,
suppliers,
regulatory
agencies
External Support
Outsource Service
Provider
Support Process
FINANCE SERVICE PROCESS MAP
Figure No. 2.1: Financial Management Strategic Process Map
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Finance Services Roles, Accountability and Responsibilities
Manual of Standards for Management of Hospital Finance Service
6.5 Activities to Achieve Good Financial Management
The benefits of high-quality government financial management are substantial. These
benefits can be achieved through the application of the typical financial management
activities such as:
6.5.1 Enhanced fund sourcing
6.5.1.1 Identification of the most effective revenue sources.
6.5.1.2 Proper management of the collection of revenues and other receipts
6.5.1.3 Management of the receipt of external resources, including loans
and official development assistance, through proper procedures and
controls, which comply with requirements of lenders and donors.
6.5.2 Optimized resource allocation decisions to achieve hospital’s priority
objectives
6.5.2.1 Planning and prioritization of investments and their funding.
6.5.2.2 Systems establishment and management to identify policy priorities,
cost and benefits of decision alternatives, presenting information
and implementing monitoring and reporting on outcomes.
6.5.3 Improved financial management and expenditure control through more
effective processes and control mechanisms
6.5.3.1 Planning and budgeting systems for revenues and expenditures.
6.5.3.2 Establishment of systems for preparing, reviewing and consolidating
medium-term financial plans and budgets.
6.5.3.3 Implementation and monitoring of policies.
6.5.4 Increased financial viability of inflows and outflows
6.5.4.1 Anticipating the liquidity needs of the hospital for deploying
surpluses to achieve maximum use of liquid funds.
6.5.5 Improved technical efficiency in managing and utilizing resources
6.5.5.1 Ensuring that expenditures and other resources are applied to the
maximum advantage of government.
6.5.5.2 Directing resources to high priority through cost benefit analysis.
6.5.6 Enhanced transparency and accountability of government, providing better
historic information as a guide to the future
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Finance Services Roles, Accountability and Responsibilities
Manual of Standards for Management of Hospital Finance Service
6.5.6.1 Recording and accounting for the financial transactions, assets
and liabilities of government
6.5.7 Good management of public funds and assets, resulting in reduction in
the levels of corruption and leakages
6.5.7.1 Protecting and enhancing the right of government to receive
maximum benefits for its money’s worth.
6.5.7.2 Carry out the necessary financial transactions of government,
e.g. bills to settle, staff to pay and revenues to collect.
6.5.7.3 Ensuring better government’s financial reputation among
customers, investors etc.
6.6. Integrative Approach to Financial Management
The government financial management is a circular process made up of several
interrelated systems, as follows:
6.6.1 Strategic and operational planning
6.6.2 Budgeting for recurrent expenses and funds derived from income
6.6.3 Fund release and cash management
6.6.4 Accounting and monitoring
6.6.5 Internal and external audit; and
6.6.6 Feedback and reporting.
Integration of these subsystems is important for decision making, control and
monitoring. Developments in information technology made the integrated
approach to financial management possible.
The benefits from integration of these subsystems are substantial. The information
outflows from one component are inflows to another component. Recognition of
the linkages and commonality can improve performance within each sub-
component, and hence of the system as a whole. By treating the system as a
whole, more effective procedures, information flows, training, and systems tools
can be developed. Modern information technology makes it both more feasible
and the gains greater, to treat financial management as a single system.
The sources of inputs and outputs of the different departments under the Finance
Service may come from all the internal and external source such as other services,
departments, sections and units in the hospital as internal clients; and patients,
suppliers, external service providers, DOH, DBM, COA and other government (local
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Finance Services Roles, Accountability and Responsibilities
Manual of Standards for Management of Hospital Finance Service
and national), government owned or controlled corporations, even those non-
government organizations and other professional groups.
6.7 Interrelation of Financial Management Process with Critical Hospital Operation
Process
The management and operation of a healthcare institution is also like managing an
industry. The difference is healthcare industry is the delivery of quality healthcare
services to people. It has to effectively and efficiently manage the inventories of its
resources such as medical supplies, drugs and medicines, reagents, medical and
laboratory equipments and other inventories necessary in the delivery of quality
healthcare services.
To illustrate the interrelation of financial management process with hospital
operation process, critical support and operating processes have been identified.
6.7.1 Property, Plant, Equipment and Supplies Requisition, Recording,
Monitoring, Reconciliation, Retention, Disposal and Reporting
This process involves the end-user/program managers as the requisitioning
agent, Material Management, Procurement, Bids and Awards Committee
(BAC), Finance Service (Budget and Accounting Department), and Disposal
Committee.
6.7.1.1 Provision of policies, procedures, guidelines and documentary
requirements for the requisition, procurement, recording,
monitoring, reconciliation and reporting of PPE and Supplies.
6.7.1.2 Ensuring the reconciliation of balances of PPE and supplies as per
physical inventory and as per financial records.
6.7.1.3 Promoting greater accountability and better controls over agency
assets and resources.
Property, Plant and Equipment (PPE) as defined are tangible assets that are
purchased, constructed, developed or otherwise acquired; held for use in the
production or supply of goods or services or to produce program outputs; for
rental to others; for administrative purposes; expected to be used during more
than one reporting period and not intended for resale in the ordinary course of
operations (Chapter 10, Section 2.k., GAM for NGAs)
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Finance Services Roles, Accountability and Responsibilities
Manual of Standards for Management of Hospital Finance Service
To illustrate:
The physical inventory of Property Plant and Equipment (PPE) and supplies serves as
basis for preparing accounting reports. The Accounting and Material Management
Departments shall reconcile their records at the end of each month. Conduct of
physical inventory shall be undertaken at least two (2) times a year (June and
December) and PPE once a year (every December). Likewise, the inventory of
supplies and materials in stock shall be made monthly.
END-USER/PROGRAM
MANAGER
PLANNING – Determination of
Requirements
MATERIAL
MANAGEMENT
Verification – if for
replacement/ or for
acquisition
BUDGET/
ACCOUNTING
DEPARTMENT
Availability of Funds/
Funding Source
PPE Requisition and Planning
PROCUREMENT/
BAC Preparation of
Procurement
Management Program
Plan (APP) for
approval of the Head
of the Hospital
PROCUREMEN
T/BAC Conduct
of Public
Bidding/Procure
ment process
MMD/End-user
Acceptance of
Delivery/
Recording/Reporting/
Issuance of AR to
End-user/Submission
to Accounting
ACCOUNTING
DEPARTMENT
Recording/Processing of
Payment/Journal entry
Procurement Process, Recording and Reporting
MMD/INVENTORY
COMMITTEE/
ACCOUNTING
Conduct physical
inventory/reconciliation
with record
ACCOUNTING
DEPARTMENT
Adjustment entries/
Retention/Depreciation/
Drop-off/write-off
DISPOSAL
COMMITTEE
Conduct disposal through
public auction/
Submission of report
PPE Retention and Disposal
Figure 2.2: Supply Management from Acquisition to Disposal
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Finance Services Roles, Accountability and Responsibilities
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6.7.2 Procurement Process
Procurement refers to the process of acquisition of goods, services and contracting for
Infrastructure Projects by the procuring entity.
It is the declared policy of the State to promote the ideals of good governance in all its
branches, departments, agencies, subdivisions, and instrumentalities, including
government-owned and/or controlled corporations and local government units in the
Procurement of Infrastructure Projects, Goods and Consulting Services, regardless of
source of funds, whether local of foreign, subject to the provisions of Commonwealth
Act No. 138. Any treaty or international or executive agreement affecting the subject
matter of this Act, to which the Philippine government is signatory, shall be observed.
(Government Procurement Reform Act, Republic Act No. 9184, January 10, 2003)
All the procuring entity in the government shall be governed by the following policies:
6.7.2.1 Transparency in the procurement process and in the implementation of
procurement contracts.
6.7.2.2 Competitiveness by extending equal opportunity to enable private
contracting parties who are eligible and qualified to participate in public
bidding.
6.7.2.3 Streamlined procurement process that will uniformly apply to all
government procurement. The procurement process shall be simple and
shall be made adaptable to advances in modern technology in order to
ensure an effective and efficient method.
6.7.2.4 System of accountability where both the public officials directly or
indirectly involved in the procurement process, as well as in the
implementation of procurement contracts and the private parties that deal
with government are, when warranted by circumstances, investigated and
held liable for their actions relative thereto.
6.7.2.5 Public monitoring of the procurement process and the implementation of
awarded contracts with the end in view of guaranteeing that these
contracts are awarded pursuant to the provisions of this Act and its
implementing rules and regulations, and that all these contracts are
performed strictly according to specifications.
6.7.2.6 No government procurement shall be undertaken unless it is in
accordance with the Annual Procurement Plan (APP) of the procuring
entity.
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Finance Services Roles, Accountability and Responsibilities
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To illustrate:
Activities Person in Interest Processes
1. Procurement Planning –
this entails the forecasting
of the needed operating
requirements (PPE and
supplies) for inclusion to
the agency proposed
budget. This is usually
done every first quarter of
the preceding year before
the Fiscal year.
End-users, Program
Managers and other
operating units
Prepares the Project Procurement
and Management Plan (PPMP),
indicating the resources
requirements for every targeted
programs and activities.
Division Chief Concerned
of the operating units
Consolidates the submitted PPMP
and forwards the same to the
Budget Department
Budget Department Reviews to ensure that the
submitted PPMP conforms to the
Hospital’s thrusts and targeted
objectives. It also ensures that the
submitted PPMP conforms to the
proposed budget. Then forwards
the same to BAC for
consolidation into APP
Bids and Awards Committee
Secretariat
Consolidates the submitted PPMP
duly reviewed by the Budget
Department into the hospitals APP
for approval of the head of the
agency.
Head of the Agency Approves the submitted APP.
Bids and Awards Committee Processes the Public biddings of
items included in the APP.
2. Acquisition of Supplies,
services and contracting of
infrastructure projects
through Public Bidding
Procurement Department
BAC, End-users and
program managers
concerned
Budget Department
Accounting Department
Strictly adheres to the provision of
RA 9184 otherwise known as the
Reformed Procurement Act in the
conduct of the procurement
process including the timelines set
therein
As a general rule, all procurements shall be undertaken through competitive or public bidding.
Competitive Bidding refers to a method of procurement which is open to participation by any
interested party. This consists of the following processes:
a. Advertisement
b. Pre-bid conference
c. Screening of bid eligibility
d. Evaluations of bids
e. Post-qualification
f. Awarding of contract, the specific requirements and mechanics are defined in the IRR of
RA 9184. This was undertaken by the Bids and Awards Committee.
In some instances, alternative method of procurement can be resorted to in cases wherein there are
already two failed biddings; purchase of items has already been consumed and additional items are
needed; there is an unforeseen contingency requiring immediate purchase; and other conditions as
stated in the provisions under Rule VI, IRR of RA 9184.
Table 3: Procurement Process
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Finance Services Roles, Accountability and Responsibilities
Manual of Standards for Management of Hospital Finance Service
6.7.3 Human Resource Management and Development Processes
Human resource management is a process, which contains four main activities,
namely:
Hiring and selection of qualified people
Development of people
Motivation of people
Maintenance of human resources
Civil Service Commission provides the policies, rules and regulations in
managing the human resources and established the standards for the recruitment,
skills development higher levels of motivations, and ensuring the level of
commitments including disciplines and performance evaluation and monitoring.
While financial management is about making financial decisions based on data
collected and processed, human resource management is about placing of right
person at the right place and right time. Human resources are considered one of
the major assets of the organization, and their development into a high
performance team is necessary. High performance can be achieved with provision
of continual learning development programs, career advancement opportunities
and measures for enhancing on-the-job satisfaction. Human resource development
entails the integration of employees’ individual goals with the organizational goal,
which may result in increased productivity and high performance result. The
organization compensates its employees adequately for the purpose of improving
employees’ competencies to respond to needs and standards and achieve goals.
6.7.4 Infrastructure and Asset Management
Infrastructure asset management refers to the integrated, multidisciplinary set of
strategies in sustaining public infrastructure assets such as buildings, water
treatment plan, sewer lines, roads, utility grids, bridges and railways (Wikipedia).
Generally, the financial process focuses the later stages of the facility’s life cycle
specifically in its maintenance, rehabilitation and replacements. The fundamental
goal is to preserve and extend the service life of long-term infrastructure assets.
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The basic premise of infrastructure asset management is to intervene at
strategic points in an asset’s normal life cycle to extend the expected service
life, and thereby maintain its performance. While each improvement raises
an asset's condition curve, each rehabilitation resets an asset's condition
curve, and complete replacement returns condition curve to new level or
upgraded level. Therefore, strategically timing these interventions will aid in
extending an asset's life cycle.
Essential processes and activities for infrastructure asset management include
the following:
6.7.4.1 Maintaining a systematic record of individual assets (an
inventory)—e.g., acquisition cost, original service life, remaining
useful life, physical condition, repair and maintenance consistency.
6.7.4.2 Developing a defined program for sustaining the aggregate body of
assets through planned maintenance, repair and replacement.
6.7.4.3 Implementing and managing information systems in support of these
systems.
These processes and activities are interrelated and interdependent aspects that
usually cross organizational boundaries including finance, engineering and
operations.
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6.8 Statutory and Regulatory Standards
These enacted laws, regulations and issuances serve as guide and reference in
monitoring compliances of the different process owners in the performance of the
mandated function in the hospitals.
For Hospital operations and management, the following statutory and regulatory
standards shall be observed:
Laws, Regulations and
Issuances Title
Description
Republic Act (R.A.)
No. 11223
Universal Health Care Act, “An Act Instituting
Universal Health Care Law for All Filipinos,
Prescribing Reform in the Health Care System and
Appropriation of Funds Therefor”
R.A. No. 11463 Malasakit Center Act, “An Act Establishing
Malasakit Centers in all DOH Hospitals in the
Country and in the Philippine General Hospital
(PGH), providing Funds Therefor and for Other
Purposes”
R.A. No. 10173 Data Privacy Act of 2012, “An Act Protecting
Individual Personal Information in Information and
Communication Systems in the Government and the
Private Sector Creating for this purpose a National
Privacy Commission, and for Other Purposes”
R.A. No. 4226 Hospital Licensure Act, "An Act Requiring the
Licensure of All Hospitals in the Philippines and
Authorizing the Bureau of Medical Services to Serve
as the Licensing Agency"
R.A. No. 9184 Government Procurement Reform Act, "An Act
Providing for the Modernization, Standardization
and Regulation of the Procurement Activities of the
Government and for Other Purposes"
R.A. No. 6541 National Building Code of the Philippines, "An Act
to Ordain and Institute a National Building Code of
the Philippines"
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Finance Services Roles, Accountability and Responsibilities
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R.A. No. 6713 Code of Conduct and Ethical Standards for Public
Officials and Employees, "An Act Establishing a
Code of Conduct and Ethical Standards for Public
Officials and Employees, to Uphold the Time-
Honored Principle of Public Office Being a Public
Trust, Granting Incentives and Rewards for
Exemplary Service, Enumerating Prohibited Acts
and Transactions and Providing Penalties for
Violations Thereof and for Other Purposes"
R.A. No. 10912 Continuing Professional Development Act of 2016,
"An Act Mandating and Strengthening the
Continuing Professional Development Program for
All Regulated Professions, Creating the Continuing
Professional Development Council, and for Other
Related Purposes"
R.A. No. 11058 "An Act Strengthening Compliance with
Occupational Safety and Health Standards and
Providing Penalties for Violations Thereof"
R.A. No. 6541 National Building Code of the Philippines, "An Act
to Ordain and Institute a National Building Code of
the Philippines"
R.A. No 11210 105-Day Expanded Maternity Leave Law, "An Act
Increasing the Maternity Leave Period to One
Hundred Five (105) Days for Female Workers with
an Option to Extend for an Additional Thirty (30)
Days Without Pay, and Granting an Additional
Fifteen (15) Days for Solo Mothers, and for Other
Purposes"
COA Circular No. 2017-
004
Guidelines on the Preparation of Financial
Statements and Other Financial Reports and
Implementation of the Philippine Financial
Reporting Standards by Government Corporations
Classified as Government Business Enterprises and
Philippine Public Sector Accounting Standards by
Non-Government Business Enterprises
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Finance Services Roles, Accountability and Responsibilities
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DOH Administrative
Order No. 2012-0012
Rules and Regulations Governing the New
Classification of Hospitals and Other Health
Facilities in the Philippines (as amended)
Other Issuances Affecting the internal and external processes in Finance Service
and hospital operations
BIR Issuances and revised forms
PhilHealth Issuances and revised list of requirements
Civil Service Commission Issuances
DOH Issuances
COA Issuances
DBM issuances
GPPB Issuances in Implementing RA 9184
GSIS issuances including the insurance of hospital Physical plants and
assets
BTr Issuances
HDMS Issuances
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Manual of Standards for Management of Hospital Finance Service
CHAPTER 7
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The Finance Service shall oversee the financial status of the hospital by providing
financial projections and directly providing assistance in all strategic and tactical
matters as they relate to budget management, cost benefit analysis, forecasting needs,
and securing of possible other funding sources. The Finance Service is headed by the
Financial and Management Officer (FMO) II. The FMO shall be reporting directly to
the Medical Center Chief. The FMO shall be coordinating with the Chief Medical
Professional Staff, Chief Nurse, Chief Administrative Officer and all the department
heads pertaining to the strategic plans and goals of the hospital.
7.1 Interested Parties
Internal Top Management –
Medical Center Chief
Chief Medical Professional Staff
Chief Administrative Officer
Chief Nurse
All Department Heads
Hospital Committee
Employees
External Department of Health
Commission on Audit
Civil Service Commission
Legislative Bodies
Department of Budget and Management
Bureau of Internal Revenue
Bureau of the Treasury
Other National Government Agencies and
Government Owned and Control Corporation
Patients/relatives
Service providers, private and other interested parties
7.2 Duties and Responsibilities
The head of the Finance Service shall be primarily responsible for managing the
hospital’s finances, including financial planning, management of risks, record
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FMO: Head of Finance Service
Manual of Standards for Management of Hospital Finance Service
keeping and financial reporting. The FMO shall be responsible for instilling
discipline among the finance service staff to strictly adhere to the guiding
principles in managing resources.
Specifically, the head of Finance Service shall be responsible to perform the
following duties and responsibilities:
7.2.1 Policy and Regulation
7.2.1.1 Set goals, objectives, strategic and tactical action plans in
mobilizing hospital resources;
7.2.1.2 Be proactive in terms of recommending new policies or revising
existing ones in order to improve the financial operation of the
hospital;
7.2.1.3 Formulate, institutionalize and administer internal financial
policies for approval of the head of agency;
7.2.1.4 Ensure compliance to existing statutory laws, rules and regulations;
and;
7.2.1.5 Coordinate with the chief of the hospital or medical center on the
implementation of financial policies and procedures as it affects the
medical operations of the facility.
7.2.2 Planning and Organization
Assist in the conduct of the hospital’s strategic planning activities to
help analyze the hospitals financial strengths and weaknesses and
propose the corresponding financial action plans aligned with the
hospital’s major strategies.
7.2.3 Financial Management
7.2.3.1 Supervise, direct and control the activities of all offices under
Finance Service;
7.2.3.2 Responsible for the accuracy and integrity of all financial data;
7.2.3.3 Ensure timely reporting of hospital financial performance and
condition;
7.2.3.4 Identify and implement corrective actions for any non-conformity
within the Finance Service;
7.2.3.5 Monitor compliance to COA Audit Observation and
Recommendation and DOH Internal Audit Service (IAS) findings;
7.2.3.6 Implement efficient cash flow monitoring and financial planning;
7.2.3.7 Ensure proper allocation and optimize utilization of hospital
resources;
7.2.3.8 Provide financial advisory services to management and other
interested parties; and
7.2.3.9 Ensure viability and sustainability of hospital resources.