Flexible Use of Resources

Although budgets often in aggregate come down from outside the agency (e.g., from OMB), there generally is some flexibility in the use of funds; sometimes more than agency leaders think. Agencies should shift funds in one motion through rebalancing and reinvestment strategies versus removing resources from one allocation area, only to see them reduced from the total resource base. For example, an agency may be able to:

Reallocate resources from a higher-unit cost to a lower-unit cost effort, where the impact on a unit basis is expected to be the same but the quantity of service can now be increased.
Take personnel-related savings, such as from delays in hiring or vacant positions, and reinvest them in other staffing areas.
Maintain fiscal accountability while also being responsive to emerging agency priorities that require resources not included in the approved budget, such as a natural disaster.
Develop micro budgets for “small business centers” within the agency where control of resources and expenses are highly flexible and driven by ROI.

In Catawba’s Duke Endowment Project, the mission of ensuring better lives for children who experience the public child welfare system is coupled with the flexibility of a private funding source. The budget is created bi-annually to support the project but the flow of funds is determined upon programmatic need. Program personnel have the flexibility (as well as the accountability) to use the funding to support personnel, operations, contracts, etc. as they deem necessary and in timeframes that are not tied to the specific fiscal year.

Reallocate funds from personnel to operating budget, or vice versa.

North Carolina’s Catawba County Department of Social Services employs all of the above through its reinventing government philosophy. They have the freedom to move funds within “expenditure line items” as well as programmatic cost centers. This provides the agency the ability to quickly address issues that arise (funding or programmatic) while also allowing it to be proactive in implementing best practices. As a result, different departments and functions within the agency are more willing to:

Agree to move funds to more stressed areas of the agency, knowing the favor will be reciprocated if ever needed
Save money versus thinking it must be spent or lost
Be proactive and implement best practices
Embrace an environment of continuous improvement and work toward more efficient ways to provide services

< Back to Budget and Finance Strategy

Additional Sections:

Budget, Fiscal Management and Financing
Structural Complexity

Influencing the Agency Culture
The Budget and Finance Plan