Budget and Finanace

Budget and Finanace

Public child welfare agencies are continuously challenged by the tension between maintaining fiscal control and accountability for public dollars, and advancing outcomes for the children, youth and families they serve. Managing this tension requires effective budget and finance practices. Making successful investments in children, youth and families, sustaining stakeholder support for these investments, and driving the cost-effective use of resources down to the individual worker level is central to the vision and mission of child welfare.

 

Consideration of budget and finance within public child welfare agencies includes determining the desired outcomes and how to:

  • Align and allocate resources to achieve those outcomes 
  • Administer, monitor and evaluate resource impact on outcomes 
  • Maintain stakeholder commitment
  • Manage associated risks and opportunities

There are frequently differences between what an agency aspires to do and what it can actually do with its available resources. Agencies must be both working within their current resource limits as well as influencing these limits to move in a positive, evolutionary direction over time.

 

It is not unusual for public agencies to experience major funding cuts during a recessionary period, just when the services are needed most. It is important for agencies to anticipate such cycles, and encourage states and counties to develop contingencies such as reserve funds that can be used in tough economic times.

 

The ways in which resources are allocated and monitored shapes and develops an agency’s culture over time. The way in which leaders talk about resources will drive how staff, people served and stakeholders view the agency’s mission and goals. Leaders must develop the case for a healthy “return on investment” (ROI) from resources, as children’s safety and well-being are at stake. Agency leaders must establish and clearly articulate the following principles:

  • Desired outcomes for those served, in addition to or instead of outputs such as number of cases handled or number of services provided.
  • The critical importance of impacting broader social outcomes such as education, public health and safety, and workforce readiness.
  • Prevention can be more cost effective than remediation. For example, sending children to residential facilities carries a much greater cost than building an ongoing service array in the children’s community. Likewise, foster care (and the associated mental trauma) is far more expensive than teaching parents effective strategies and intensive in-home treatment programs.
  • Some outcomes are worth a significant resource investment even when only a few children are affected, such as in the case of a reduced incidence of child abuse.
  • Although most budget cycles are annual, the return on many of the most important investments in children, youth and families are only seen in the longer term. ROI measures must therefore include longitudinal trend analysis.
  • The overall resource investment must be balanced between long-term investments and “quick win” efforts that improve outcomes for children who are presently experiencing abuse and neglect.

This guidance will assist agencies to use resources in ways that lead to ever-improving agency performance and capacity for helping to improve the lives of children, youth and families.

This Guidance Provides Answers to These and Other Questions:

  • What is budget and finance; why is it important, and how does it impact those we serve?
  • What comprises an effective budget and finance plan for agency leadership?
  • What specific processes should agencies use for budgeting, fiscal management and financing?
  • How should an agency communicate about budget and finance to obtain or maximize its resources? How can budget and finance positively or negatively impact the agency’s culture?
  • What are some of the common risks associated with administering resources, and how should these risks be proactively managed?
  • How can agencies navigate a complex system of stakeholders to get the resources they need? How can budget and finance functions add the most value to agencies?
  • How do budget and finance activities impact agency disparity and disproportionality?

Why Is This Critical Area Important to the Field of Public Child Welfare?

  • Well-respected and credible fields are transparent about what resources they have, and how they are using them to thebest effect, in accord with their overall strategy and practice model and in collaboration with their stakeholders. Approaching resources in this way results in agencies that:
    • are more flexible and adaptable in their practices
    • maintain strategic focus, strengthen staff and program performance accountability establish cultures of continuous improvement
    • enjoy greater staff and stakeholder buy-in
  • In the absence of effective budget and finance practices, an agency is likely to engage in regulatory and fiscal compliance as an end in itself, make across-the-board versus well-targeted allocations and cuts, or follow the idiosyncratic direction of leadership as its primary way of determining and allocating its resources. This typically leads to performance stagnation, a lack of strategic focus or non-strategic change and disruptions such as vital resources being taken away when most needed. A resulting mentality to hoard resources and protect the status quo can be very debilitating to agencies over time. There is strong public support for efforts that result in safer, more secure, healthier and better-adjusted children. The child welfare field must be clear and persuasive that agencies are able to make this happen. Effective agencies do this in large part through demonstrating how resources make a difference in the lives of those being served, in ways that are lasting and result in a good return on the investment of those resources. This is crucial to building public trust and enhancing the perceived value of the field’s work.

How Will Outcomes Be Achieved For and With Children, Youth and Families?

  • Effective agencies procure and allocate available resources to those activities with the greatest impact on outcomes for children, youth and families. This enables agency leadership to make strategic decisions to build agency capacity and improve its services within realistic resource constraints. An effective agency administers and monitors how resources are being used in ways that enable the agency to make ongoing adjustments based on outcomes and other current realities. These agencies make the best case possible for the resources needed. They can identify emerging resource opportunities and proactively manage risks to resource procurement, allocation and use.
  • Effective agencies establish the policies, procedures, and decision-making guidelines from which staff may operate with greater discretion, resulting in an organization that is driving efficiency and cost-effectiveness at all levels. This leads to stronger and better-aligned program and staff values and accountability, a greater degree of internal and external collaboration (including between the agency’s finance function and program staff) and greater service flexibility and innovation.
  • Cost and improvement monitoring and quality assurance processes should be guided and supported by the right data and analysis tools and methods. These techniques must establish whether or not what the agency is doing with resources is resulting in the desired outcomes for children, youth and families and meets the multitude of requirements by which most funding sources are bound. Without good data the agency may:
    • Make changes that do not result in the desired outcomes
    • Fail to capture lessons learned that make it easier to achieve desired outcomes over time
    • Realize reductions in necessary funding





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