Should Service Chiefs Be Accountable for Budgets?

It’s time-tested question and debate among VHA Directors, ADs, and CFOs:

Should Service Chiefs be accountable for tracking and managing financial performance throughout each year? 

Is it fair to ask Service Chiefs to worry about budget and finance amid many competing priorities and responsibilities?

Related questions include:

Should Service Chiefs have the authority to make resource decisions that may impact your Station’s overall financial position? 

Should financial performance be a factor in Service Chief’s annual performance plans?

These are critical questions for each VAMC Leadership and Fiscal team to consider.

The answers have significant implications for your Station’s overall planning, budgeting, and governance approach as well as organizational culture, recruitment, and retention.

Let’s explore some of the common arguments for and against delegating financial accountability to the Service levels.

Arguments For Financial Accountability

  • Building business acumen and retaining financial responsibility are within the scope of a Service Chief’s job description.
  • Financial accountability mirrors private sector best practices.
  • Service Chiefs best know their most pressing needs and how to prioritize resource decisions.
  • Leadership and fiscal do not have the bandwidth to micromanage ongoing resource decisions.
  • Delegation increases flexibility while reducing bureaucracy.

Arguments Against Delegating Accountability 

  • Service Chiefs (especially clinical) do not have time to keep up with finances and budget performance.
  • They lack the training and administrative support needed to achieve desired levels of business acumen.
  • Delegating may lead to runaway expenditures and ultimately increase financial risk.
  • Fiscal staff have a better understanding of spending patterns and trends.
  • There is a lack of tools available that Service Chiefs can easily use to plan, monitor, and project budgetary and financial performance.

Is there a right answer?

Each VAMC must evaluate its financial position, readiness, capabilities, and tools to determine the most effective and realistic approach to delegation and financial accountability.

However, with VHA modernizing, implementing new systems, featuring transparency, and fully committing to High Reliability, there is an inevitable trend toward delegating financial authority and expecting Service Chiefs to be accountable for financial performance. 

For those Stations that wish to move in this direction, it is critically important to understand the governance structure (to include processes, decision making authority, and tools) that must be in place to effectively administer a delegated model.

For example, Stations will need to commit to establishing Service-level budgets each year, clearly communicate any limits on spending authority, implement regular financial performance reviews among Services and Budget Analysts, and re-design Resource Board to fit within a delegated structure.

4Cast Supports a Transition to Financial Accountability

4Cast, a VHA-specific SaaS solution used by 25 VAMCs since 2016, is specifically designed to help Service Chiefs gain insight to financial performance and guide informed, proactive resource decision making.

One way 4Cast accomplishes this by is providing Service Chiefs with easy-to-read Resource “Monitoring” Graphs and Charts using your Station’s Payroll and HR data.

Here is just one example of 4Cast Monitoring tools, in this case a simple graph showing a Service’s current Overtime usage and Projected Overtime for the rest of the Fiscal year in relation to the Service’s budget target.

This graph, along 4Cast’s ability to drill down to detailed OT by Employee, enables Service Chiefs to quickly and proactively assess Overtime utilization and determine if action must be taken to bring spending in line with budgetary targets.

Want to See 4Cast But Don’t Have Time for a Demo?

We’ve created a simple and concise “Self-Guided Tour” of 4Cast that you can review in just a few minutes.  The Tour is organized into five posts, each taking less than two minutes to review.

Contact Us today if you’d like to discuss how we can introduce 4Cast to enhance your planning and budgeting in FY22.

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