Challenges related to effectively optimizing and managing fiscal budgets
Local health and human services government agencies are charged with making essential services available within their communities, including physical and behavioral healthcare, social programs, and other critical programs that are designed to meet a variety of basic and complex needs of its residents. Increased cost of services, staffing shortages, and loss of historical knowledge through staff attrition has left agencies struggling to complete their basic fiscal functions and manage the individual requirements of multiple funding streams needed to create budgets that effectively leverage and braid federal, state, and local dollars to hire and retain current staff, and meet the increasing costs for sustaining and, in many cases, increasing the capacity of essential services.
Combined with increasing administrative requirements related to policy and regulatory changes (despite a national movement toward decreasing administrative burden), additional oversight in the form of fiscal and program reviews and audits, and the implementation of new quality metrics for measuring and improving outcomes, local government fiscal departments are faced with unprecedented challenges with managing their budgets effectively to meet the needs of their communities while maintaining compliance with state and federal priorities and statutory and regulatory requirements.
Key budgeting issues facing health and human service agencies
With the myriad of challenges health and human services agencies face in their day-to-day operations, budgeting rises to the top. Here are five reasons why:
- Health and human service organizations rely heavily on state and federal funding to provide or contract essential services. However, funding levels can vary from year to year, or consist of one-time only funds, so agencies must be prepared to manage their budgets effectively and find replacement funding, even when funding levels are low.
- Agencies must stay abreast of ever-changing healthcare statutes, regulations, and policies. This can be particularly challenging for agencies without the resources to continuously scan and evaluate the latest federal and state rules, which may lead to loss of funding as a result of non-compliance with changes, as well as missed opportunities for newly available funding opportunities. It is essential to have the resources and effective strategies in place to obtain and maximize the use of state and federal funding when available.
- Agencies must be positioned to fund and respond to changing needs within the community. The needs may be specific to a particular population of service recipients, a result of demographic changes in the community, or based on significant health and safety issues impacting larger geographic areas. For example, the opioid epidemic has had a devastating impact on communities, placing significant financial strain on health and human services agencies.
- Individuals and families struggle to access essential services, including mental health treatment and support against the backdrop of stigma (self and community), cultural and other socio-economic barriers, lack of transportation, and limited availability of services in certain areas. Successfully braiding funds from state, federal and private grants, and donations is essential for community campaigns, outreach, and resources to overcome these challenges and barriers that are known to prevent access to services.
- Many agencies find themselves facing a shortage of qualified fiscal and service delivery professionals, especially in rural areas, where access to healthcare and other services can be limited. In addition, high staff turnover rates can result in a loss of institutional knowledge, reduced morale, and decreased productivity.
Health and human services agencies face a range of complex and interconnected challenges in their efforts to provide essential services to those in need. Addressing these challenges will require a coordinated and strategic approach, as well as sustained investment and support from federal, state, and local policymakers, as well as community members and other stakeholders.
Building a plan for funding and program success
Professional fiscal consulting services can play a critical role in helping these agencies achieve their goals. These services benefit agencies by providing the resources and knowledge to effectively create and implement strategic needs responsive budgets and value-based contracting. Having the capacity to accurately assess the needs of the community and allocate resources for services through value-based contracting, (that provides financial incentives for providers that meet quality and performance), is critical to the success of the agency’s purpose and goals. By focusing on the needs of the community and delivery of high-quality, outcomes-based services, agencies can ensure that they are using their resources effectively. Without this approach, agencies may find themselves allocating increasingly limited resources to programs and services that are not effective, while neglecting quality services that are proven to be effective.
Quality Governance
| Strategic Alignment |
What: Ensure linkage between planning and objectives How: Frequent communication, ongoing assessment, and high transparency |
|---|---|
| Value Delivery |
What: Ensure approach to project is high value, matches scope of work, and is delivered efficiently How: Continuously monitor approach/scope and ensure strong stakeholder engagement |
| Resource Management |
What: Ensure sufficient, competent, and efficient project resources How: Strategic/ongoing assessments that monitor deliverables for quality and timeliness |
| Risk Management |
What: Embed strong data and information security protections, project risk awareness, and develop risk mitigation strategies How: Follow data governance protocols, continuously monitor for risks and ensure rapid response, if needed |
| Performance Measurement |
What: Monitor ongoing project performance metrics; scope, schedule, quality, cost, and risk How: Identify deviations from plan and effectiveness of approach, assess/report impact, recommend remedial action |
Fiscal consulting services can also help agencies address workforce challenges fiscal departments are facing by providing support in areas such as workforce planning, recruitment, and retention. By developing effective strategies for retaining staff members and reducing turnover rates, agencies can ensure that they have the right people in place to deliver essential services to those in need.
Training is also a critical issue for health and human services agencies. Fiscal team members need to have the necessary skills and knowledge to ensure the procurement of quality services to individuals, children, and their families, and ongoing training is essential for keeping up with changes in statutes, regulations, policies, and best practices. Fiscal consulting services can provide support in areas such as staff development, training, and performance management. By investing in the professional development of staff members, agencies can improve the quality of their contracted services and ensure that they are meeting the needs of the community.
Continuous assessment, implementation, and monitoring
It is essential for agencies to realize that implementation is not a one and done process. Sustained change is a continuous process of identifying what worked well and what could be improved moving forward. The constant change of community circumstance, as well as state and federal priorities, requires agencies to continuously reevaluate service needs and outcomes. Fiscal and quality adjustments based on those evaluations are critical to the overall successful service provision.
There are several key phases in the continuous improvement process, they are:
- Engaging community stakeholders, service recipients, and staff
- Assessing local data to determine unmet service needs, as well as reviewing state and federal priorities and requirements
- Planning for resource deployment to address identified needs and priorities
- Implementing contracts for services that include funding for quality performance measures and achieving defined outcomes
- Monitoring and evaluating the contracted services outcomes
Data and service outcomes from the monitoring process are part of the information used to inform the next budget cycle. While these phases build upon the knowledge and information gained in the prior process, progress may not be linear. There may be times when it is important to return to a prior step to understand the need for adjustments to the plan moving forward.
Work with a trusted partner to help optimize spending
Professional fiscal consulting services can help agencies implement needs-responsive budgeting and value-based contracting by providing guidance on data analysis, stakeholder engagement, and other strategies for identifying community needs and allocating resources to providers that deliver quality and effective services. By working with experienced health and human services consultants, agencies can develop a clear understanding of the services and programs that are most important to their communities, and prioritize funding accordingly.
Whether it's addressing attrition issues, obtaining fiscal team members, or implementing needs-responsive budgeting and value-based contracting, fiscal consultants can provide the guidance and support that agencies need to manage their finances effectively and provide quality services to their communities.
CAI’s health and human services team has been providing proven solutions for state and local governments for many years. Our expertise includes technical assistance, training, and direct staff augmentation support for new and experienced fiscal officers and their fiscal team members.
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