Full Project-APPRAISAL OF TECHNIQUES FOR EXPENDITURE CONTROL IN GOVERNMENT OWNED HOSPITALS

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CHAPTER ONE
INTRODUCTION
1.1  BACKGROUND OF STUDY
In all organization, except possibly the tinniest, there is a process called expenditure or as used in the most commercial organizations , cost control process. Expenditure control has been defined as the process by which managers use effectively and efficiently the scare resources of the enterprises in the accomplishment of the organizational objectives. Most studies of the expenditure control techniques have been done in business organizations and most of the new control techniques applied in not – for – profit public corporations were developed in these organizations. Most description of the management expenditure control processes therefore tend to assume, usually implicitly but sometimes explicitly, that the process of expenditure control is taking place in a business enterprises. The research report in contrast, is a study of expenditure control in government owned not for profit organization. Its thesis is that the basic control concepts are the same in both profit oriented and non-profit organization but that because of the special characteristics of non-profit organizations, the application of the techniques developed in profit oriented organization are subject to certain modifications before they can be effectively applied especially to the non-profit organizations owed by the government. Many business persons, as well as many accountants approach not for profit organizations expenditure control with a certain amount of trepidation because of lack of familiarity with such accounting. There is no real reason for this uneasiness because except for the few special characteristics, non-profit organization expenditure control follow many of the same principles followed by commercial enterprises. One of the special characteristic lies in the reason for their existence.
In over simplified terms, it might be said that the ultimate objectives of a commercial organization is to realize net profit for the stockholders. As such the decisions made by their management are intended to increase (or at least maintain) profits, and success is measured to a significant degree by the amount of profit that these organization earn. Were as the ultimate objective of a government owned non-profit organization is to meet some socially desirable need of the community. The primary concern of the government in relation to its not-for-profit organizations is to inquire whether resources are being used in a manner consistent with goals of alocative efficiency and stabilization of the economy. The role that transcends the narrow concerns of the shareholders and arises from the government functions as a protector of the consumers interest. Thus, the decision made by the management of these organizations are intended to result in the best possible service within the available resources and their success is primarily measured by how much service they render and by how well they render it.
1.2  STATEMENT OF THE STUDY
The need for effective management of resource in government owned not-for-profit organizations cannot be over emphasized. This is because while goal attainment is an important index of public service efficiency, the government can no longer pretend that the question of cost is secondary. This has necessitate in government instructing public service organization to “count down costs” as it embarks on its programmes. No wastage of financial resources should therefore, be permitted. It is therefore essential, that expenses should not be incurred more than is just necessary. Extensive expansion within limited supply of funds necessitates an optimum utilization of expenditure control system designed in a manner that can allow for maximum utilization from minimum resources. Also available financial resources can only be managed optimally it there exist effective techniques for expenditure control. This study is thus conducted in order to appraise and review some of the available techniques for control of expenditure opened to government owned non profit organization and its applicability to those owned by the Nigerian Government especially hospitals.
1.3  OBJECTIVE OF THE STUDY
The study is being carried out in order to:
1. Examine some of the techniques for control of expenditure applied by government financed and controlled not profit organization.
2. Highlight the main obstacles and limitations of each of the examined techniques.
3. Advance some of the techniques that may be appropriate for use in government owned hospitals.
4. Recommend to management team of such organization a means of improving the techniques already in use in the hospitals

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