Question

As a healthcare Manager, you are often the one to control the entire operations of the business and making sure that the business is receiving revenue for services given. What are some internal controls that you would use to monitor and control business activities?

Answer 1

Monitoring Internal Control

In January 2009 COSO issued Guidance on Monitoring Internal Control Systems. This publication was intended to provide in depth input on how to apply the monitoring component of the original COSO framework. It is essential for all parties working with internal control to understand how a monitoring framework and foundation can improve the effectiveness of business processes.

Internal control processes have raised questions and issues since the creation of the Sarbanes-Oxley Act of 2002. Management is required to assess internal control systems and provide quarterly certifications. Further, external auditors are required to audit management’s assessment in conjunction with an audit of the financial statements. The framework for establishing internal control systems was developed by COSO (known as the Committee of Sponsoring Organization of the Treadway Commission). The original framework, Internal Control – Integrated Framework was introduced in 1992 and clarified with the issuance of guidance for smaller companies in 2006.   

CONTROL BUSSINESS ACTIVITYES

Controls are the intelligent processes, procedures, and safeguards that protect your company from uninformed or inappropriate decisions or actions by any team member.

When you build a business versus a job, you want your team to have the authority to get tasks done without running everything past you. You need them to exercise their judgment and use their discretion.

But you also need to empower them with the feedback, ground rules, and double checks they need to do their best work. This is where business controls come into play.

Building strong internal controls is not about you, the business owner, being in control, but rather enhancing and giving control to your business. The best controls make the default behavior the right behavior. And they empower your team to get better results with less effort by giving them immediate feedback and a more defined playing field.

Controls are not about you being a traffic cop hiding in the bushes to leap out and give an unwary team member a speeding ticket, rather, you want your controls to be more like a speedometer or cruise control system that helps individual team members autonomously do better work. Your controls, which are really just a specialized subset of your business systems, help your team members do better work.