1. MANAGINGFINANCIALRESOURCESIN HEALTH AND SOCIALCAREORGANISATION.
NAME: GEORGE NUHU ALHASSAN STUDENT NO. P1004940
GROUP: 84B
Summary
1.1
From the CollinsEnglishDictionary(2012),cost meansthe amountof moneyrequiredforsomething;
so, basicallyCostingPrinciple canbe saidto be the systemusedindeterminingthe costof for example
labour, material oremployeesinanorganisation. Knowledge of thishelpsmanagerswhenpreparing
theirbudgets. Costisdividedintotwoparts: Directcost and Indirectcost. A directcost iscost that is
traceable toa particularobjectorperson,forexample the costof a loaf of breador the rent of a shared
accomodation. Anindirectcost(sharingorapportioncost) cannot be traced to a givenobject. Costing
has alsobeenclassifiedasfixedorvariable. A fixedcostisfixedforaparticularperiodof the license
regardlessof the numberof residentsforinstance inacare home whilsttoiletries, light, andthe carers
are variable since the amountspentonthese varieswiththe numberof residentsinthe care home.The
NHS hasapprovedof 6 costingprinciplesandthese are asfollows;
• STAKEHOLDERS INVOLVEMENT
• CONSISTENCY
• DATA ACCURACY
• MATERIALITY
• CAUSALITYAND OBJECTIVITYand,
• TRANSPARENCY
The stakeholdersinvolvement requiresinputfromawide range of stakeholders(the manager,
accountant,service user,representatives) including nonfinance staff whoare involvedinthe decisions
regardingespeciallyfinance of anorganisation.Theyall have aninterestinthe overallprogressof the
organisationandtherefore mustmake decisionstogetherforthe bettermentof the organisation.
Transparencyisthe nature wherebythe costingdocumentsare processedtransparently.Thrershould
be a clearand auditable costtopreventfraud.Transparentcosthas twobenefits:a) showingan

2. assumptionandsource data to enduserswill improvethe creditabilityof the outputandthismayhelp
to deliverthe desiredchange andb) a transparentauditwill facilitate reconciliationandassurance
processes(www.gov.uk)
REFERENCES LIST
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/283450/ApprovedCos
tingGuidanceFeb2014.pdf