Budgeting, Fiscal Management and Financing

Budgeting, Fiscal Management and Financing

Terms such as accounting and finance are commonly used to describe the overall work in this domain. For the purpose of creating a more specific and strategically based terminology, here are summary descriptions for three distinct but linked areas of agency work in this domain:



Budgeting is a strategic financial planning process that proposes a funding plan and, when agreed to by all key stakeholders, appropriates funding and resources to the agency as a whole. The methods by which this occurs vary by jurisdiction (e.g., zero- based versus experience-based budgeting; state-level budgeting versus local-level budgeting reviewed by the state). The process is generally determined and spearheaded by an outside office of management and budget (OMB) department to which the agency is accountable in the broader governmental structure within which it operates. Budgeting is generally a lengthy process that involves both the executive and legislative branches of government. It involves determining revenues, expenditures and other resources, and results in a comprehensive budget plan.



Once a budget is in place, financing is the process that implements the budget on the revenues side, determining how the budget will be funded from federal, state, local and/or private sources. A critical aspect of this area of work is revenue maximization: determining how revenue can be maximized to serve vital agency programs. Agencies often miss opportunities to maximize their revenues from all federal sources, including federal block grants and foundations that are interested in supporting certain agency efforts.


Fiscal Management

Once a budget is in place, fiscal management is the process that implements the budget on the expenditure side, determining how funding is administered within the agency once it has been appropriated. Bookkeeping and audit compliance are commonly used to describe important technical aspects of fiscal management. Related processes include staff reimbursement for expenses, management of payments to vendors and management of service delivery. Within fiscal management lie countless opportunities to strengthen the relationship between the overall budget and how specific use of budgeted resources will best serve the needs of children, youth and families and improve outcomes (e.g., performance-based contracting and flexible use of funds across a continuum of services) and to strengthen the cost/benefit consciousness at the case worker and administrative staff levels.


The agency’s budgeting, fiscal management and financing functions should reflect its overall strategy. Examples of how effective agencies do this include:

  • Using flexible funding streams (e.g., TANF block grant) to support specific services central to the agency’s practice model. For example, one agency uses TANF funds to support substance abuse treatment, peer mentoring and case management for substance abusing moms who are at risk of having their children removed.
  • Using the budget process to support the agency’s strategy and vice versa:
    • The strategy is a communications document that makes a business case for investment by public or private funders.
    • The budget is a policy document that identifies and funds the priorities of the executive and legislative branches of government.
    • Understanding the full flexibility of each funding stream and using that full measure of flexibility to advance the agency strategy.
  • Collaborating with partner agencies in the system of care, informing each other’s budget proposals and weaving together financing systems in alignment with a system-wide strategy. Examples of related public agency collaborations include those:
    • With other public agencies to maximize revenues and impact from federal funding streams that are accessible tosome programs/agencies and not others (e.g., Medicaid 90-10 money for IT investment and child welfare fostering unds which allow training a broader audience than traditional IV-E funds).
    • With native tribes who, due to recent regulatory changes, can now establish their own IV-E relationships.
    • With Private agencies who have their own independent budgeting, fiscal, and financing systems through which public funds are translated into services for children, youth and families. At times these private agencies are able to access other private and public funds to support services (e.g., prevention, wrap-around) not easily funded from traditional public funding streams.
  • Establishing fluid budgeting processes and making and communicating decisions about ongoing budget adjustments in terms of the agency strategy. Aligning or realigning multiple agency budgets around common priorities within a system of care, such as education, safety and youth employment, or across a continuum of services.
  • Involving those in budget, fiscal and finance work in ways that reflect the agency’s strategy, such as aligning resources to a new grant opportunity.
  • Budgeting to build support capacity as well as core agency programs and front-line practices, such as an agency-wide plan that builds HR and IT resources, supervisor and manager development programs and field research efforts that support front-line operations.

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