Financial Management - Hands holding cogs

Meeting demands with limited resources

In public sector health organisations, financial management involves maximising patient care outcomes within the resources available. Both the present and future pressure on healthcare means funding will not be able to meet ever-increasing demands. It is important that all managers assist in utilising funds in the most effective and efficient manner. Managers throughout health can use innovation, creativity and process development to improve efficiency.

Activity Based Funding (ABF)

Under the National Health Reform Agreement, COAG 2011, ABF is the preferred approach to funding public hospital services. ABF is currently used effectively in a number of countries to allocate money to hospitals. This complements reforms initiated by the NSW Government to improve the funding and management of public health services. ABF is a method of allocating funds based on the level of activity or services provided. Under ABF, LHD and SHNs are essentially paid for the work they perform, within agreed targets.

Delegations, accountability and governance

Delegations of authority in an agency establish who is empowered to make decisions and take action on behalf of an organisation. Delegations are a critical tool for good corporate governance, as well as a key mechanism for setting the tone and culture of an organisation.

Regard should be taken of the NSW Health CORE values of Collaboration, Openness, Respect and Empowerment when determining and developing delegations. Clear, well-maintained delegations are essential for internal control and management. They enable devolution of decision making to appropriate managers while maintaining effective oversight of the operations.

Budgeting and reporting

Australian public sector reporting entities are required to prepare financial statements under the Financial Management and Accountability Act 1997 (FMA Act), the Commonwealth Authorities and Companies Act 1997 (CAC Act) or the Corporations Act 2001.


HETI Online offers a range of  e-learning courses to develop your skills in Financial Management.

Log into HETI Online  to learn more about:

  • Activity Based Funding
  • Documentation and Activity Based Funding for Clinicians

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