design and implement computerized financial management system

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The University of Nigeria Teaching Hospital (UNTH) Ituku/Ozalla Enugu, has come a long way. The Hospital began early in the 20th century as a standard general Hospital for Africans built by the colonial administrators.  It later metamorphosed into a general hospital on the attainment of Nigeria’s independence in the 1960’s. However, at the end of the Nigerian civil war in 1970, the then government of East Central State transformed it into a Specialist Hospital with effect from July 1, 1970. At this time, the hospital had a total of 50 doctors, 10 wards, and 300 beds and a chest bay of 60 beds.  There are also 350 nurses working in the Hospital.  Today, the situation has changed dramatically.  The bed capacity of the hospital in the permanent site is over 500 beds and the number of its personnel (both professional and non-professional) has increased tremendously.

Financial management can be regarded as the process which ensures that financial resources are obtained economically and used efficiently and effectively in the accomplishment of the desired goals. These processes involve monitoring and analyzing public institutions financial conditions, general and special account, management budgetary procedures, financial statements and reports, payroll/income tax calculation and salary payments, and managing cash flow.

Price to the emergence and introduction of computer all these processes and activities were done manually. The expansion of the University of Nigeria Teaching Hospital UNTH, Enugu just like any other public institution, will not only intensity but also diversify the financial operations thereby making the activities increasingly difficult and wearisome. The volume of transaction has already increased to a level that requires automation. Convincingly, the field of data processing was not easy to get by and so over the years (in the field of data processing with utmost speed), mankind has searched for the extra-ordinary. At such time came the emergence of the computer which is widely used virtually in all areas of human endeavor.

The increase in the use of computer in both public and private institutions of the world economic is an undisputable conclusion for efficiency, speed and accuracy of its operations in achieving results. However, the manual processes and procedures of financial resources allocation and utilization is our contemporary days has been confronted with consistent problems of errors and wastage of time which are traceable to human mistakes and shortcomings. The establishment of a sustainable, manageable, reliable and flexible financial management system for UNTH to curb these problems inherent in the existing system is the bases of this project work. Such a financial management system will support all operational accounting procedures as well as financial management. Financial management system was introduced so that unauthorized access or abuse of important information will be eliminated.

What motivated or propelled me to write this project is because of so many reasons; firstly, much time is spent on analyzing and ascertaining the accuracy and approval of financial statements and accounts which in turn affects decision making and policy formulation, and documents could be physically damaged or lost due to insecurity issues, and finally, Sensitive records is at high tendency to be compromised by an unauthorized person.

• Statement of the Problems

Some problems faced in the financial management activities includes;

1. Time wastage: a lot of times are usually wasted using manual based financial management operation to register employee salary, income, expenses and document all financial record. The more the number of employee salary/ income/ expenses the more time it takes.
2. The consistent prevalence of errors in calculations carried out on financial reports which are traceable to human mistakes and shortcoming.

• Improper handling of financial statement, reports and records as a result of the problem of space for storage and retrieval purposes which led to many files been misplaced.

1. The interval or time consumed in analyzing and ascertaining the accuracy and approval of financial statements and accounts which in turn affects decision making and policy formulation.
2. It is very cumbersome to manually reconcile all employee salary/ income/ expenses information from different files sources into their work sheet.
3. Loss of record: Information and records stored in cabinets could be physically damaged or due to lack of backup or lost due to theft.

• Aim and Objectives of the Study

The aim of this research work is to design and implement computerized financial management system that will work towards the elimination of ineffective mode of operation in manual based financial management system.

The objectives of this study are as highlighted below;

1. To develop software called financial management system that will replace the manual based financial management system.
2. To ensure that accurate, faster and reliable calculations are carried out on reports without any suspicious of any sought.

• To enhanced method of record keeping which is less stressful and easy to replicate.

1. To eliminate the error involved with the manual method of checking, and updating employee salary/ income/ expenses information.
2. To save the time wasted with manual based financial management system.
3. To ensure that financial records are properly stored thereby preventing them from getting lost since these records will be used in the future especially when making or planning for budget.

1.4 Significance of the Study

The significance of the study is linked to the key attributes of a computer system i.e. speed, accuracy, efficiency and reliability. Public institutions are always expected to compute and fetch employee salary report/ income report/ expenses’ report/ profit or loss report in a short time frame and with little or no mistake since there are other students waiting to be attended to. Thus the significance of this study is to increase the speed, and accuracy for all financial reports for the public institution. Afterwards, further development can be made on the project work in accordance to the rapid development in information technology in the near future.

1.5 Scope of the Study

The scope of this project is limited to the development of a financial management system for public institution, UNTH Enugu considering the financial management system. It is expected that this project will be successful enough to draw interest from other public institutions.

1.6 Limitations of Study

Some of the constraints that may have in one-way or another affected the outcome of this work include:

1. Lack of adequate fund to finance the project: this was one of the limitation to this work because much money is needed to carry out a detailed research work which is not easily borne by every student.
2. The limited knowledge of ASP.net and Visual Basic programming was great challenge to this project. However, more research was made to complete this project successfully.
   

1.7 Definition of Terms

Accounting: Accounting or accountancy is the measurement, processing, and communication of financial and non-financial information about economic entities such as businesses and corporations (Needles and Marian, 2015).

Analyst: This is a person or professional who studies the problem encountered by a system and creates means of solving them by introducing a better system.

Basic Salary: It is the amount paid to an employee before any extras are added or taken off such as reductions because of salary sacrifice schemes or an increase due to overtime or a bonus.

Budgeting Procedures: This refers to the practices which involves processes, institutional arrangements, documentation, norms and conventions governing budget preparation, approval, implementation, appraisal and review.

Business: it is an organization or enterprising entity engaged in commercial, or professional activities.

Capital Account: This is a system that monitors financial resources used in buying long lasting materials e.g. equipment, buses etc.

Computer: It is an electronic device operating the control of instructions stored in its memory that can accept data (input) manipulate the data according to a specified rules (processing) produces result output and stores the result for future use.

Data processing: is defined as the entire process of converting or manipulating data into definite meaningful information (Adigwe and Okoye, 2015).

Data: It is the facts collected for decision making they are facts that are kept to be processed to get more information.

Database Management System (DBMS): it is software which controls the flow of data and checks and checks on how data are stored.

Database: is an organized /unique collection of related files. It is a collection of schemas, tables, queries, reports, views and other object.

Documentation: material that provides official information or evidence that serves as record; written specifications and information that describes the product.

Electronic Data Processing Equipment (EDP): it is a machine that performs the work of data manipulation.

Expenses Account: It is an account that records expenses made in the company or business organization.

Finance: the management of money and other assets.

Financial Control: it refers as the processes which makes sure that financial resources used in running an organization are obtained and efficiently utilized in the accomplishment of set objectives or desired goals.

Financial Management: It refers as the area or function in an organization which is concerned with profitability, expenses, cash and credit, so that the “organization may have the means to carry out its objective as satisfactorily as possible;” the latter often defined as maximizing the value of the firm for stockholders.

Gross Pay: It is an individual’s total earnings throughout a given period before any deduction are made.

Income Account: It is an account that records income or revenue generated in a company or business organization.

Information: is a processed data that can be read and understand.

Internal Check: It refers to the allocation of authority and work in such a manner as the afford checks on the routine transactions of day-to-day work by means of the work one person being proved independently by another, or the work of a person being complementary to that of another.

Management Information System (MIS): Information system that generates accurate timely and organized information so that manager and other user can make decision, solve problem supervise activities and track progress.

Management: Management is the function that coordinates the efforts of people to accomplish goals and objectives by using available resources efficiently and effectively. It includes planning, organizing, staffing, leading or directing, and controlling an organization or a system to accomplish a goal.

Net Pay: This is the final salary amount that will be given to the employee after the deductions.

Net Pay: This is the final salary amount that will be given to the employee after the deductions.

Payment Receipt: it referred to as a receipt for payment, is an accounting document that a business provides its student as proof of full or partial payment toward a product or service.

Payroll: this as the sum of all financial records of salaries for employees, wages, bonuses and deduction.

Profit/ Loss Account: It’s an income statement that shows a company’s revenue and expenses over a particular period of time, typically either one month or consolidated months over a year.

Public Institution: This is any entity established or controlled by the federal government, a state government, a local government or municipality, including but not limited to an institution of higher education or a public higher education research institution.

Salary Account: This is a system that maintains or records all the account paid to workers at the various levels of management and sections of the institution.

Salary: it is a fixed amount of money or compensation paid to an employer in return for work performed or it refers to the remuneration of crewing to the employee work at administrative management or clerical level for monthly or annual pay period.

Security: This helps to prevent unauthorized users from illegally accessing certain data within the database, it protects your data/ files.

Software: These are set of logically related instructions given to the computer to perform some specific task.

Special Project Account: This system monitors all expenditure incurred in the execution of defined projects by the institution.

System: Is the collection of hardware and software, data information procedure and people.

Transaction: it is a business event that has a monetary impact on an entity’s financial statements, and is recorded as an entry in its accounting records.

Turnover: This represent the total amount of money or capital generated by an organization or commercial form over a specified period of time.

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