System Audit for Small Hospitals: The Other Systems


The objective of this system is to plan, execute and appropriately pay for the various works that are necessary at the hospital. The works manager is the most important person in this system. The process is as follows:

  1. As always the first step is to plan the necessary works for the quarter. This is carried out by the appropriate head of the Departments (Form 1).
  2. The indent for the work is then made by respective departments in need and reviewed by the Works manager who plans the details of the work and the budget (Form 2).
  3. The work and the approximate budget are then presented to the appropriate committee and approved (Form 2). The finance manager should be a part of approving body.
  4. The Works Manager then prepares the authorization for work and the work contracts (Form 3). This has all the necessary details like the person to whom the contract is given, the number of persons working, the target date, budget, etc.
  5. On completion of the work the Works manager and the Finance Manager, inspect and approve the payment for the works.
  6. The payment authorization procedure is then followed for both the works carried out and the goods purchased.
  7. The list of work carried out is presented every weekend to the administrative committee for ratification (Form 4).


The objective of this process is to ensure that payments are made only after sufficient verification of the goods received or the works carried out. Like the previous sections routine payments are made only when budgeted and allocated money is available. The Finance Manager prepares the authorization which is approved by the Administrator.

  1. In the main stores once the Goods Received (GR) number is given and the number pasted on the goods or items the original bill with the GR stamp and number, the original purchase order is sent to the Finance Manager (Form 5).
  2. Using one of these numbers the Finance Manager verifies the details from the computer with the necessary details like the various quotes, the telephonic negotiations, etc. and forwards it to the Administrator and makes the authorization for payment for the concerned bill (with voucher numbers) (Form 6).
  3. The Administrator once again checks and approves payment and prints out and gives the authorization for payment and to whom the payment should be made.
  4. The cashier then makes the necessary payment to the person submitting the authorization.
  5. Similar authorization is generated for the works carried out by the Finance Manager after inspection of the work carried out (with voucher numbers for payment). The Administrator similarly checks the details and gives the authorization for payment print out to the concerned person who goes to the cash counter and collects the payment.
  6. When payments are made through cheques the Finance Manager sends the authorization to the accountant to make the cheques.


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