Operations

Operations

What does it look like when effective budget and finance work has been well-established and realized in the daily operation?

 

Role Clarity

The ultimate responsibility for budget and finance plans rests with the agency’s executive team. Establishing the supporting culture and organizational structure at all levels of the agency are the responsibility of department, program and function heads, especially the finance function head. Designing, refining and monitoring key processes are the responsibility of middle management, and daily performance in alignment with the agency’s mission, values and plan priorities is the responsibility of supervisors and front- line staff. Multiple hats are common in smaller agencies.

 

Working in a Complex System of Authority

There are many complexities within federal/state/county environments, politics and regulatory and funding structures. For example, being in a state supervised and county administered system exponentially increases the number of conversations and negotiations that need to take place to promote both downward alignment and upward flexibility and innovation towards improved services and outcomes. Agency leaders in this complex system of authority determine when and how to align stakeholder interests with agency strategy. Getting to know federal-level and other stakeholders, federal regional office staff and legislators at the federal, state and local levels are all part of making this happen. Agency leaders are trusted and credible within this complex system, and they get timely and accurate information from stakeholders and are able to have open and honest conversations with them. National organizations like APHSA provide related guidance and connection to supportive peers.

 

Driving Cost Discipline Down to the Worker Level

Specific to budget and finance efforts, program staff members can be engaged to see these activities as strengthening the procurement and use of resources rather than as efforts in compliance or efficiency that may compromise outcomes for those being served. For example, communicating how much the agency spends annually per major budget line item helps staff feel “in the loop” and gives context to decisions throughout the year that relate to the budget. When paired with systems and protocols for making decisions in line with agency strategy, giving each team specific allocations for travel, flexible case funding, out of home care and equipment give frontline staff clear reasons to consider costs when making requests and decisions. In another example, one agency has placed fiscal staff within program areas, teaming with front-line and program staff to meet administrative demands on them while also providing their analysis of what is and is not working. Enlisting staff in creative problem solving to identify ways to use funds effectively and efficiently further reinforces a culture of empowerment and collective stewardship/accountability. It unifies everyone in a common purpose and enhances the credibility of leadership.

 

Communication

In effective agency operations the ongoing communication activities related to budget and finance reinforce the perception that the agency can be trusted and relied upon with its resources. A major part of the role of agency leaders is “selling” the desired programs and services. To do so, agency leaders understand the organization’s practice model, programs, data, trends and financing. Other examples of effective communication include:

  • Communicating openly with stakeholders about what’s working well and not well, why, and what the agency proposes to do about it. Successful communication efforts here result in:
    • Flexibility in developing and implementing budgets. 
    • Support for budget proposals and strategic priorities.
    • Support for reinvestment of savings versus taking savings back out of Child Welfare and into the general fund.
    • Quick and accurate access to breaking information (e.g., pending regulation changes, anticipated shifts in budget environment).
  • When asking questions of staff related to how resources are impacting outcomes, ask for documentation to gauge the level of confidence one should have in staff responses, while setting the tone for a culture of rigorous critical thinking (e.g., basing conclusions on data; using root cause analysis).

Data Collection and Analysis

Information is needed for baseline assessment, root cause analysis, ongoing monitoring of both broad change plans and targeted continuous improvement projects and communication with staff and stakeholders. For effective budget and finance work, information services and technology-related resources must be in place that:

  • Measure progress being made by each child, youth and family over time.
  • Include data about cost/benefit ratios and other analyses needed to support budget requests.
  • Provide data regarding resource return on investment that tells the story longitudinally or prospectively. For example: 
    • How do two different kinds of services trend out from the past to the future, such as use of center-based care versus therapeutic foster care? In the past, what have they respectively cost and what outcomes have they generated? How does that project into the future given trends in demographics of people served?
  • Include data about private provider and other partner services and impact. Are worker-friendly and accessible.

Finance Function Relationships with Other Functions and Vendors

Especially in large or complex agencies and systems of authority, the finance function’s connections and working relationships are critical. Related priorities include:

  • Having budget, contract and program departments coordinate and collaborate effectively. Program and budget departments have to operate hand-in-hand, with each understanding the inner workings of the other. Where the agency has control over its budget, having both fiscal and program staff as part of the development and monitoring processes. Having the finance function model a customer service mindset when doing budget and fiscal management work, such as in contract negotiations, staff reimbursement efforts, and consulting with senior leaders on the program side in general agency management. Balancing supporting the agency mission with the controls needed for audit compliance and, more importantly, reinforcing expected behaviors from agency staff.
  • Linking up what vendors submit for and how they're both affirmed and challenged in contracting and performance monitoring. Paying attention to internal biases regarding vendors, both overly positive and overly negative. Understanding the business practices and business models of vendor agencies in drafting Requests for Proposal (RFPs) and negotiating contracts so as to form win-win relationships and achieve positive outcomes.

Monitoring System Integrity

When those being served or front-line staff experience or observe actions by agency staff or private providers that are contrary to the agency’s mission and values, mechanisms must be in place to alert agency leadership. Policies and procedures should be created that align with the rules, regulations and audit requirements of various funding streams. The field of accounting has technical standards in place such as Generally Accepted Accounting Principles (GAAP), as well as professional standards to ensure competent, honest, open and consistent reporting of the agency’s financial situation. Staff training and communication programs should be in place to make sure that new and existing staff members understand these policies and procedures.

Providing staff and those served with direct access to an agency ombu sperson or executive when they observe misuse of agency funds is critical to protecting the agency’s integrity and trustworthiness.






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