WBA 4 a Essay

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ILM Level 5 Award in Management

D4 – Financial Management

M5.14 Understanding Financial Management

Contents Page
1. Task 1 – Explain finance within the context of your organisation 3 - 7 2. Task 2 – Understand the value of management accounting in your organisation 8 - 10

3. Task 3 – Explain the process of budget setting used in your organisation

11 - 12

4. Task 4 – Explain what techniques you could use for monitoring and controlling a budget in your area of operation.

13

5. Bibliography 14

6. Appendix A - Accountability Framework 15

7. Appendix B - Mandatory Financial Controls for Governors/Department Heads 16

8. Appendix C - Mandatory Financial Controls for Finance Managers 17 - 19

9. Appendix D – Stakeholder Analysis 20

10. Appendix E – SPS Key Performance Indicators 21

11. Appendix F – Business Control Process 22

12. Appendix G – Budget Cycle 23

M5.14 – Understanding Financial Management
Task 1 - Explain finance within the context of your organisation.
Explaining the use of source documents and the purposes of the main financial documents.
When a business or financial transaction occurs, a document known as a source document captures the key information of the transaction. The source document describes the basic facts of the transaction and as a minimum should include date, purpose and amount. When practical and beyond these minimum requirements the source document should include the name and address of the other party of the transaction. The source document is the initial input to the accounting process and serves as objective evidence that the transaction took place and supports subsequent audits. It is also important for these source documents to be used to account for any monies used in the operation of any organisation or business to ensure that it has sufficient funds available and as evidence for future budget planning.
As an organisation the Scottish Prison Service (SPS) use a number of source documents in 4 differing areas to provide evidence of financial transactions. Some of the documents used in each area are as follows –
PURCHASES
Tender register of quotes and tender bids – This is where a record of all tenders and bids are held to ensure appropriate allocation of contract is
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