Budget Development and Finance
Processes and tools for allocating resources to current operations and new initiatives need to be tied directly to strategic goals and objectives. Too often they are tied instead to historical trends or basic compliance with stakeholder expectations.
The budget is a strategic document and process that proposes a funding plan and, when agreed to by all key stakeholders, appropriates funding to the agency. The related process is generally determined and spearheaded by an outside OMB department. It is generally a lengthy process that involves both the executive and legislative branches of government. It involves determining revenues and expenditures, and results in a comprehensive budget plan. Specific process points in the agency’s budgeting work include:
Financing requires processes that implement the budget plan on the revenues side, determine how the budget will be funded from federal, state, local and/or private sources and determine how revenue can be maximized to serve programs. Specific process points in the agencies’ financing work include:
Fiscal management requires processes that implement the budget plan on the expenditure side and determine how funding is administered within the agency once it is appropriated. Specific process points in the agency’s fiscal work include:
Data Collection and Analysis
Processes must be in place that yield three types of data to support budget and finance work: Monitoring agency fiscal health, financial results and capital resources.
Characteristics of these data include:
Budgeting, fiscal and financial management are ongoing roles of agency leaders within the context of an unfolding strategic and change planning cycle. These roles require systematic decision-making methods that also establish the basis for group input and group decision-making.
When the budget and finance planning and processes are open and inclusive of all levels of the organization, stakeholders and partners, the result is more buy-in and commitment versus resistance or confusion, and more innovative and realistic tactics and initiatives. Effective agencies use comprehensive communication mechanisms to keep those served, staff and stakeholders informed and to build their understanding, buy-in and participation.
Quality Assurance (fiscal accuracy and timeliness)
Whether focused on the accuracy and timeliness of fiscal and financial data and reports or other vital processes within the agency, effective quality assurance (QA) processes use criteria for satisfaction and measures of quality that are directly related to agency strategy, and they examine all of the relevant, informative points in the process being evaluated. Knowing what you need to accomplish in your operational processes, what steps are involved, who is responsible for each step, and what standards of timeliness and accuracy apply are the critical questions to answer before establishing a QA process. Employing a continuous improvement methodology when QA problems arise is essential to learning from and solving related problems.
Whether an agency uses a balanced scorecard, Performance Improvement Plan (PIP) review or similar approach, agency performance management relies on supportive data and analysis from the fiscal and financial perspective. For example, agency PIPs typically define the Child and Family Services Review (CFSR) performance standards, measure current agency performance against those standards, and list a set of actions for addressing any current gaps between these standards and measures. When applying budget and finance tools, agencies enhance their standard PIPs by also identifying the relative costs and benefits of financial investments for the various remedies selected to close CFSR gaps. This is in line with the best intentions of the CFSR and PIP process.