The Budget and Finance Plan

Effective agencies explicitly link their budget, fiscal and financing work to desired outcomes for children, youth and families. For example, if an outcome goal is reducing children in care, an agency may fund wrap-around services that are hard to fund through traditional federal funding streams or they may invest in early intervention to prevent kids from coming into care. Effective agencies do this through establishing a budget and finance plan that aligns agency resources to the agency’s overall strategic plan.

A budget and finance plan supports the overall strategic plan by providing the answers to a range of questions about how an agency will make its strategic priorities happen through obtaining and judiciously using its resources. It spells out the related work to be done in a way that is comprehensive and concrete, yet still flexible to the unfolding realities of any complex environment. Constructing such a plan is an excellent way for new leaders with budget and finance responsibility to become fully oriented to the agency and its environment.

Resource limits play a double role in a budget and finance plan. The agency should be both working within their realistic limits and influencing those limits to shift in a positive direction over time. For example, the plan might lay out initiatives within current resource guidelines and also include an initiative to make a better case for increased or reallocated resources over time.

In smaller agencies with a limited finance function, these plans may actually merge into one, whereas in large complex agencies there may be multiple “nested” plans at different levels and within different functions of the overall organization. In either case, senior finance staff should participate at every step of agency strategic planning.

As you read the following, please link to the Budget and Finance Plan, a basic planning template that includes all the sections and questions that an agency should address:

• Direction Set by the Agency Strategic Plan
• Current Resource and Capacity Constraints
• Revenue and Resource Maximization Strategies
• Required Policies and Procedures
• Data, Measures and Related Methods
• Risk Management
• Participation of Staff and Stakeholders
• Finance Function-Specific Projects and Work Priorities
• Timeframes, Milestones and Governance

Other important characteristics of effective budget and finance planning include:

Linkage to Other Change Plans
In most agencies the budget and finance plan would be developed in accord with a broader agency strategic planning activity. It may also be setting the pace for other planning that links to agency strategy, such as the plans of private providers working under contract for the agency. In some systems of care the budget and finance plan may be part of broader and well-integrated community planning, where resources are shared or where financing is a collaborative effort. In both state and locally administered jurisdictions, planning should be occurring at the local, regional and state-wide levels. The important thing is not to develop the agency’s budget and finance plan in a vacuum.

To implement and support the agency’s strategic plan, a number of other high-level agency plans should be put in place concurrently:

• Administrative Practices (e.g., facilities, major procurement and vendor management)
• Information Services and Technology
• Workforce and HR (e.g., staff development, staffing)
• Communication (both internal and external)
• Research

Addressing Disparity and Disproportionality
Eliminating disparity through identifying and addressing its root causes should be a critical priority within an agency’s strategic plan. Budget and finance planning and the activities that stem from it can impact this critical priority in a number of ways:

• Inclusion of staff and management in the budget process help create a culture of transparency, inclusion and empowerment.
• Participation in the budget and finance area promotes creative problem solving born of contributions from more diverse individuals and perspectives.
• Strategic budget and finance activities make it clear to those served, staff and stakeholders what common ground they share.
• Budget and finance plans that are based on what outcomes they will impact will result in more fair and consistent quality of access and utilization of care.
• Resource ROI analyses should consider how segments of people served are receiving services in relation to other segments, including those where disparity is a concern.

< Back to Budget and Finance Strategy