Costing and Statistics Section
Cost Allocation is an essential factor in nearly every organization and in every facet of accounting, particularly in a very large organization where diverse affairs are dealt with by independent departments. Scarcity of funds and management of available or allocated funds are the two major factors usually facing in a healthcare system. Unless there is a properly established Costing Division, management will not be made aware of the organization is running profitably or spending the available/allocated fund in an economically in a viable manner.
No organization can survive for long without proper management of its available running fund. BDF Royal Medical Services as a health service organization and the management of its running fund is insignificant for its day to day activities. BDFRMS Costing Department is the first in this kind in the Kingdom of Bahrain which is established in the year 1996 under the patronage H.E. Shaikh Lt. Gen (Dr.) Mohammed Bin Abdulla Al Khalifa, (Chairman Supreme Council for Health, former Under Secretary to Ministry of Defence and former Director of BDF Royal Medical Services) supervised by University of Bahrain. Later with immense support from the former Director of Medical Services Lt. Gen. (Dr) Ali Al Khalifa, (May Allah Almighty bless his soul) the methodologies and concepts provided by the university were put into practice. By day to day discussions and critical thinking, many of the methodologies were reviewed and changed according to the international standards. The calculations and Statistical formulae used in the costing reports were praised and evaluated by the WHO personals, ISO, ACHSI and international auditing firms like KPMG and several individuals.
Aim & Objectives
The Costing Division aims to provide useful financial and statistics information to the top-managers so that executive decision-making and management operations may be improved and the use of allocated funds will be optimized.
The Cost Department plays a major role in controlling hospital budget. It indicates all the variations to the top management and is responsible for keeping records associated with the accounting and patient treatment activities. To attain the greatest usefulness, the cost department must not only record but also analyze all costs of treatment, purchasing, and administration for use by management in planning and control. Their duties include financial planning, reporting and controls, short and long term business strategy, investments, hedging, mergers and acquisitions, cash management, internal risk management, corporate finance, auditing and accounting. Financial Controls GAAP standards of accounting principles, all of which are implemented with view toward compliance, fraud and theft prevention.
In addition, as the functions of Costing Department, it issues significant control reports and other decision making data to executives, superintendents and department heads, which assist in controlling and in improving costs and operations of the organization. The need for the prompt issuance of reports and statements must alert the accountant to modern developments and techniques in the field of communications.
Information transmittal problems have too often been overlooked and reported to IT Department. An analyzed statistical information is available with Costing Department which is providing to publish in the annual reports. The analysis of patient information and costs and the preparation of reports are greatly facilitated through proper sectioning of functions generally listed under the Costing department. The performance of the functions of the costing department involves the past, present, and future. All related functions of Costing Department should be well executed by the costing team in order to attain faith of the Management
By analyzing various IT generated reports cost accounting staff can provide considerable internal reports by calculating the profitability of various products, product lines, services, customers, sales, regions, stores, and so forth. The areas of analysis may change on a regular basis, so that management can view different aspects of the business, with an emphasis on improving financial results.