(c) Internal Control
Internal control includes organisational plan and all the procedures adopted by the implementing agency to safeguard its assets, control the preciseness and the accuracy of its accounting documents, promote the efficiency of its operations and follow through the policies prescribed by management. The main reference documents for internal control are:
(1) Business plan
(2) Written operational procedures
(3) Budget
(4) Financial ratios.
Each month/quarter the manager of the scheme should write a report evaluating the activities. This report is for internal use only and should be presented to the board of directors.
(d) Auditing
An audit is an extremely necessary exercise for the scheme. A comprehensive audit should be conducted once a year. If possible an independent auditor should be contracted to complete the audit, depending on the volume of business, timing and resources. The board should select a recognised auditing body. In the event of having difficulty in contracting an independent auditor, the report from the manager should be as comprehensive as possible and cover all the areas that would have been covered by an independent audit.
Management auditing examines the operating procedures and methods of the scheme, including its internal controls, assessing their cost effectiveness and efficiency. In management auditing, the examination is not limited to financial records and procedures. It also includes the organisational structure, information technology, marketing strategy and administrative policies.
Financial auditing is the independent examination of the financial statements of an enterprise by an appointed auditor. The audit report produced by the auditor would be used by the board of directors, members, providers, state structures and other organisations.
Key Aspects of Effective Human Resource Management
Human resource management is an essential element of the strategy of an organisation. It helps to determine the staffing needs of an organisation, recruiting and placing personnel and providing training, development, motivation, support and supervision to the human assets of an organisation.
Based on the nature and volume of work, staffing number and pattern is determined. During the first year of activity of the scheme, it may not be possible to hire staff. However, once the funds are available, it should be well thought before hiring the staff that how tough is the job to be performed, the level of qualification needed and the capacity of the organisation to remunerate the staff. Other aspects of human resource management include:
• Standardized recruitment process
• Appointment and placement
• Conducting orientation and training
• Providing challenging responsibilities and autonomy on taking decisions
• Conducting staff performance appraisal
• Reward and continuous appreciation
• Training and development
• Support and supervision
• Discipline
• Benefit package
• Health and safety
4. Cautions for the Management of the Health Micro-Insurance Scheme:
The social objective of the health micro-insurance scheme no way relieves it from the requirements of efficient management. The management of an insurance scheme is technically difficult and hence, rigorous and efficient management is important on two accounts:
(1) Trust: Good management encourages the trust of the members. This is particularly important in a health micro-insurance scheme where the members are required to pay regular contributions without drawing immediate benefits. Since the benefits materialise according to the need which can be after several months, the members must be sure that the scheme will be in a position to help them when during such times. Efficient management will also help keep the confidence level of the service providers. They must be sure that the scheme will always be able to pay the invoices for treatment provided to beneficiaries.
(2) Viability of the Scheme: A health micro-insurance scheme manages itself against risk of illness. It is a financial instrument which is relatively complex to manage: by definitions, the concept of risk involves a degree of uncertainly and this, as well as the coverage of risks, often involves adverse selection, moral hazard, over-prescribing etc. A scheme must therefore equip itself with budgeting and control mechanisms, accounting and financial tools and strict and efficient monitoring to meet any eventuality and be in a position to fulfil its commitments towards its members and service providers.
