Public Health Financial Management Competencies

Peggy A. Honor´e and Julia F. Costich rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr

he absence of appropriate financial management tion, utilization, and management of resources for competencies has impeded progress in advancing the the delivery of public health functions and the impact of those resources on population health and the field of public health finance. It also inhibits the ability to T public health system.”3(p90) The multidisciplinary ef- professionalize this sector of the workforce. Financial managers forts of researchers and practitioners have contributed should play a critical role by providing information relevant to to this movement by increasing literature on public decision making. The lack of fundamental financial management health finance, creating venues for structured dialogue, and contributing to evidence-based decision making knowledge and skills is a barrier to fulfilling this role. A national through research. Stimulated by this movement has expert committee was convened to examine this issue. The been the realization that standard financial analysis committee reviewed standards related to financial and business techniques are absent in public health and that an ade- management practices within public health and closely related quately skilled workforce is needed to implement such practices.4,5 As an example, questions proliferate about areas. Alignments were made with national standards such as the variation of public health funding among jurisdic- those established for government chief financial officers. On the tions and the value of public health services. But ex- basis of this analysis, a comprehensive set of public health aminations are stymied by the lack of reliable financial financial management competencies was identified and data and the inability to perform financial analysis that is routinely conducted by skilled financial managers in examined further by a review panel. At a minimum, the hospitals, community health centers, and other related competencies can be used to define job descriptions, assess job organizations. performance, identify critical gaps in financial analysis, create career paths, and design educational programs. ● KEY WORDS: competency, management, public health Workforce Competencies competencies, public health finance, workforce Recent critical examinations of the public health workforce have resulted in a considerable amount of atten- tion to competencies.4,6–9 The Association of Schools of The cornerstone of a profession is an ade- Public Health (ASPH) and Council on Linkages Be- quately skilled workforce. The alignment of work- tween Academia and Public Health Practice (Council force competencies with professional responsibilities on Linkages) have been diligent in addressing these is- is a strategy associated with increasing organizational sues. The ASPH and Council on Linkages have identi- 1 effectiveness. A competency can be defined as a set of fied competencies for master of public health students knowledge, skills, and abilities needed to accomplish a specified task.2 A deficiency in public health is the lack of adequately documented competencies for the public health financial management workforce.3,4 Corresponding Author: Peggy A. Honoré, DHA, University of Southern Mississippi, 118 College Dr, PO Box 10075, Hattiesburg, MS 39406 (peggy. The movement to develop a field of study in pub- [email protected]). lic health finance has progressed in recent years. The qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq field is defined as one that “examines the acquisi- Peggy A. Honoré, DHA, is Associate Professor, Department of Community Health Sciences, College of Health, University of Southern Mississippi, Hattiesburg. J Public Health Management Practice, 2009, 15(4), 311–318 Julia F. Costich, JD, PhD, is an Associate Professor and Chair, Department of Health Copyright C 2009 Wolters Kluwer Health | Lippincott Williams & Wilkins Services Management, College of Public Health, University of Kentucky, Lexington.

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● ● TABLEqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq 1 ASPH discipline-specific competencies TABLE 2 ASPH interdisciplinary/crosscutting domains and competencies related to finance Domain: health policy and management qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq Domain: Communication and informatics Competencies: Upon graduation, a student with an MPH should be able Use information technology to access, evaluate, and interpret public to... health data Identify the main components and issues of the organization, Domain: Program planning financing, and delivery of health services and public health systems In collaboration with others, prioritize individual, organizational, in the United Statesa community concerns, and resources for public health programs Describe the legal and ethical bases of public health and health Prepare a program budget with justification services Domain: Systems thinking Explain methods of ensuring community health safety and Analyze efforts of political, social, and economic policies on public health preparedness systems at the local, state, national, and international levels Discuss the policy process for improving the health status of populations Apply the principles of program planning, development, budgeting, petencies to guide position responsibility or job perfor- management, and evaluation in organizational and community mance assessments of the public health financial man- initiativesa agement workforce. Apply principles of strategic planning and marketing to public health Apply quality and performance improvement concepts to address ● organizational performance issues Competency Identification Methodology Apply “systems thinking” for resolving organizational problems Communicate health policy and management issues using appropriate Recognizing this gap, a public health finance ex- channels and technologiesa pert committee was organized to provide authorita- Demonstrate leadership skills for building partnerships tive input for the identification of competencies appropriate for the public health financial management a Finance-related competency. workforce. The project was part of a Robert Wood Johnson Foundation–funded initiative to advance the and the broadly defined public health workforce.10,11 field of public health finance. Both practice and aca- The ASPH competencies include two distinct cate- demic organizations were represented. Committee gories of competencies—discipline-specific and interdis- members were finance, business, budgetary, and ad- ciplinary/crosscutting. Three of the 10 competencies un- ministrative experts from public health, healthcare, der the discipline-specific domain of Health Policy and academia, and federal, state, and local government Management focus on financing, budgeting, and man- (Table 4). Members of the committee served as key in- agement (Table 1).10 Of the 60 interdisciplinary/cross- formants and were selected by the lead author on the cutting competencies categorized into six domains, basis of their extensive professional knowledge of pub- four relate directly or indirectly to finance (Table 2). lic health, leadership roles, and responsibilities within Core competencies for public health professionals de- their organizations, knowledge of governmental work- veloped in 2001 by the Council on Linkages identified force competencies, or academic and work experiences Financial Planning and Management Skills as one of eight in finance, accounting, or business. Work of the group domains (Table 3),11 but competencies under that do- culminated in the identification of a comprehensive set main focus primarily on the budgeting process. In economic and financial terms, budgeting is not consid- TABLE 3 ● Council on linkages core competencies for ered a function for building assets but rather one for publicqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq health professionals forecasting and itemizing funds. In contrast, financial and economic analyses are important tools for compre- Domain: Financial planning and management skills hensive examinations of financial performance. Such Develops and presents a budget knowledge is invaluable to generate new and diversify Manages programs within budget constraints the existing revenue streams and for building organi- Applies budget processes zational monetary value (asset generation). The Coun- Develops strategies for budget priorities cil on Linkages 2008 list of draft competencies remains Monitors program performance heavily focused on the budgeting function.12 The ASPH Prepares proposals for external funding and Council on Linkages competencies are of signifi- Applies human relation skills to program management cant value to public health. However, since they were Manages information systems not developed to be discipline specific, a major gap Negotiates and develops contracts for services remains in the availability of sufficiently detailed com- Conducts cost analyses for effectiveness, benefit, and utility Public Health Financial Management Competencies ❘ 313

TABLE 4 ● Organizations represented on the public health small size and expert knowledge of the committee. In financeqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq competencies expert committee and review panel addition, participation in the calls was never less than 9 of the 10 members. Expert committee A strategy was built into the competency identifica- University of Kentucky, College of Public Health tion process to gather input and reviews beyond the North Dakota Department of Health expert committee. A panel of expert reviewers (Table Iowa Department of Public Health 4), selected also because of their level of professional Broward County (FL) Health Department experiences and knowledge on finance, was asked to Mississippi State Department of Health provide written and verbal comments to the lead au- Florida Association of County Health Department Business Administrators thor. The process of receiving the written comments and State of Missouri Budget Office conducting informal telephone interviews took about US Government Accountability Office 1 month. Comments of the reviewers were categorized Medical Group Management Association and sent to the expert committee. Following a call with Review panel the expert committee to establish consensus on the com- Governmental Accounting Standards Board ments, revisions were made accordingly. Emory University, Rollins School of Public Health As a follow-up to the work of the expert commit- University of Kentucky, School of Public Administration tee, a formal research project was designed and admin- Florida Atlantic University, College of Business istered by the College of Public Health, University of City of St Louis Government Kentucky. A survey was developed to gather input a Finance-related competency. from the practice community on the competencies.13 The survey was administered to finance managers at local health agencies serving communities with pop- of competencies for the public health financial manage- ulations of 25 000 to 1 million. The purpose of the re- ment workforce as shown in Table 5. search was to test validity of the competencies, identify Over an 8-month period, the committee provided ex- practice priorities, and document educational gaps and pert opinion for the identification of competencies nec- opportunities. essary to fulfill typical fiduciary and related administrative responsibilities in a public health setting. While emphasis was placed heavily on responsibilities within a governmental agency, consideration was given to the ● Results applicability of the competencies to other public health organizational settings such as nonprofits. Competency Competencies identification was a multistep process: Initial committee discussions were framed by a thor- • review existing competencies for the public health ough review of current competency documents from workforce, ASPH, Council on Linkages, Joint Financial Manage- • review government financial manager workforce ment Improvement Project (JFMIP), and Healthcare 14,15 documents and financial competencies for the Financial Management Association (HFMA). Af- healthcare delivery system, ter several conference calls and reviews of written • identify basic and then more complex financial man- comments from committee members, consensus was agement skills, reached to structure the competencies under three do- • identify sample practices for each of the competen- mains. The committee elected to adopt two domains cies, from the 2001 Council on Linkages core competencies. • assign levels of expertise required for the financial The title of the Council on Linkages Policy Develop- management workforce and public health senior ment/Program Planning Skills domain was revised to Or- leaders, and ganization and Program Planning and Policy Development. • gather input from an expert review panel. Financial Planning and Management Skills was chosen by the committee as an identical domain title.11 To capture This work was accomplished through nine confer- the full range of skills required to meet typical respon- ence calls and written comments from committee mem- sibilities of financial management positions, a third do- bers. The duration of calls was typically 2 hours with main titled Administrative and General Skills was identi- more information gathered through written comments fied by the panel. in between conference calls and one-on-one discus- Knowledge, skills, and abilities were identified for sions with the lead author and committee members all three of the domains to capture the technical exper- when necessary to elaborate or clarify issues. This infor- tise needed to fulfill anticipated public health finan- mal consensus-building process worked well, given the cial management responsibilities. Drawing from their 314 ❘ Journal of Public Health Management and Practice

● TABLEqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq 5 Competencies for the public health ﬁnancial management workforce Competency level

Financial Senior Knowledge, skills, abilities Sample practices managers leadership I. Financial management, analysis, and assessment Demonstrates knowledge of generally accepted Application of fundamental financial accounting standards (eg, PB accounting principles and other appropriate standards accounting principles, accounting equation, fund accounting, governmental accounting) Gathers, interprets, and reports financial data and Financial statement preparation PB communicates data and information according to Presenting analysis and explaining trends and variances before standards governing bodies Comprehensive Annual Financial Report development Assesses the financial status of the organization and Financial ratio analysis PP develops any necessary corrective measures Benchmarking Trend analysis Financial performance measurement and management Develops budgets and financial data according to Budget formulation in compliance with oversight agency PB prescribed submission formats and specifications instructions Budget presentation to governing and legislative bodies Uses cost, managerial accounting, and economic Developing indirect cost rates PB evaluation approaches and applies these skills to the Developing cost and cost allocation studies and other managerial practice of public health reports Conducting economic analysis (eg, cost analysis, cost-effectiveness analysis, cost-benefit analysis, cost utility analysis) Assesses budget activities and their relationship to the Participation in budget development and planning processes PP operational and program goals of the organization Application of prioritization techniques Incorporates knowledge of grants accounting Application of OMB Cost Principles PB Application of uniform administrative requirements for grants Integrates knowledge of the grant-making process with Workforce training on effective grant writing and development PB financial management practice concepts Negotiates, implements, and monitors contracts, with Contract development and management P B particular emphasis on achieving outcomes Applies knowledge of basic financial and business Accounts payable and accounts receivable aging reports PB processes (eg, procurement, accounts payable, Time studies accounts receivable, time accounting) Management of procurement and payment systems Applies management, evaluation methods, and Operational ratio analysis PB performance measurement to monitor program Program evaluation and assessment performance and track achievement of program Measurement of outcomes and performance objectives Outcomes-based grant-making and contracting Logic modeling Demonstrates the knowledge and ability to manage Treasury functions (eg, investment activities, cash management) P K monetary resources Promotes financial accountability and transparency Reporting and sharing of financial data PP Preparing financial performance reports Professional networking Ensures the accuracy of financial accounting systems Internal control assessments and auditing P K and financial information Achieves compliance with federal regulations Implementing controls and procedures for achieving compliance PP Compliance auditing OMB circular compliance (continues) Public Health Financial Management Competencies ❘ 315

Financial Senior Knowledge, skills, abilities Sample practices managers leadership Functions as the financial expert for the organization Financial analysis and planning PB Developing and providing financial information to management Provides advice on all financial functions Defines business and IT requirements and maintains an IT business system assessments PB integrated financial management system to ensure the Business process redesigns generation of timely, accurate, and consistent financial information Uses available resources (eg, financial data, budget Performance reporting and auditing PK information, financial management concepts, Trend analysis information systems, etc) to increase program Budget variance effectiveness by conducting analysis and developing Financial performance indicators viable solutions to complex program management issues Assesses risks Risk-mitigation activities PB Assess IT security risks Stewardship of organizational resources Implements appropriate management control systems Continuous quality improvement including a quality assurance program Internal control planning Supports the audit function by assisting program auditors Audit report response and using audit information for program improvement Audit planning Promotes public health finance as a profession Participation and leadership in professional public health finance PB organizations and events II. Organization and program planning and policy development Leads the process of identifying new funding sources, Business planning PB revenue streams, and product lines and provides Financial analysis advice on strengthening and maintaining the existing Sustainability planning ones Develops policies and procedures to ensure compliance Internal policy manual development P B with regulations and the issuance of accurate financial information Demonstrates knowledge of legislative processes, policy Participation in legislative hearings PP setting, and political issues (eg, governmental Participation in policy agenda setting appropriations, rule making, legislative committee Policy interpretation structure) Articulates fiscal implications of policies Fiscal note development PP Service pricing analysis Maintains current information on national, state, and Participation in national professional development opportunities PP local issues and pending policies that may impact Participation in professional organization events public health financing Recognizes strategic planning processes and the Strategic planning PP relationship to budget formulation and sustainability Scenario planning planning Budget forecasting Assesses the needs and satisfaction of stakeholders and Needs and asset mapping PP customers and makes recommendations to implement Development of strategic alliances improvements that enhance the delivery of services Responding to taxpayer/stakeholder requests and achievement of desired outcomes Quality assessments Change management activities Displays and promotes ethical practices Respect for organizational and professional values P P (continues) 316 ❘ Journal of Public Health Management and Practice

Financial Senior Knowledge, skills, abilities Sample practices managers leadership Understands and values cultural competencies Respect for diversity PP Building methods of communication with non–English-speaking populations Sets the strategic financial direction of the organization Establishing and prioritizing service lines and programs P P Identifies the relationship between strategic planning, Alignment of budget with strategic plans P P budgeting, and financial management Develops plans for the role of the finance, business, and Establishment of systems to capture expenditures related to PK administrative functions during and following disasters disaster-response situations Establishment of approved alternative financial processes/practices during crisis situations Fraud and abuse prevention Implementation of special financial internal controls during and following disasters Disaster risk mitigation planning Trains the workforce on finance, business, and In-service training PB administrative concepts Collaborations with academic institutions Assesses financial information needs of decision makers Gathering financial data for legislative and public hearings P B III. Administrative and general skills Articulates the mission and role of public health (eg, core Public health marketing PP functions, essential services, operational definition) Professional development on relevant healthcare finance topics and the relationship to the healthcare system Complies with human resources legal and regulatory HIPAA compliance PB requirements EEOC Compliance Personnel performance assessments Conflict resolution Develops succession plans Workforce assessments PB Staff development and professional development planning Applies systems thinking concepts effectively Logic modeling PP Critical thinking Team building Demonstrates proficiency in basic business software Utilization of Excel, PowerPoint, Access, etc P B applications

Abbreviations: B, basic (is somewhat familiar with the topic); EEOC, Equal Employment Opportunity Commission; HIPAA, Health Insurance Portability and Accountability Act; IT, information technology; OMB, Office of Management and Budget; P, proficient (expert on a specific topic); K, knowledgeable (possesses a working knowledge of the subject). expert knowledge and review of the JFMIP and HFMA knowledge into the practice of public health at multi- documents, the committee began the process by iden- ple levels for large and small agencies. Also, there was tifying basic entry-level skills of financial managers in consensus that the competencies could be used to de- governmental, public health, and medical care deliv- velop progressively more responsible career paths for ery organizations. Competencies most appropriate for the workforce and to encourage advanced education public health were selected. More complex skills were and lifelong learning. This concept was introduced by added in the next step. This phase of the process was committee members familiar with financial manage- lengthy and resulted in multiple refinements over 6 ment in the healthcare delivery system. months before consensus was reached. Debate on the A level of expertise required for financial managers target audience (eg, large or small agency, nonprofits) and senior leaders was also identified for each compe- for the competencies was the focus of lengthy discus- tency. Given the committee’s senior level of expertise in sions. The committee decided to include sample prac- financial management across many organizational en- tices for each competency to facilitate translation of this vironments, there was overwhelming consensus that Public Health Financial Management Competencies ❘ 317 this should be included as an aid to communicating areas of public and healthcare finance, this has not the relevance of fiduciary responsibilities to the pub- occurred in public health. The absence of appropri- lic health profession. The federal Sarbanes Oxley Act ate course content on public health finance in master of 2002 and some comparable state laws mandate that of public health programs exacerbates this problem.18 chief executive officers attest, in writing, to the financial The committee felt strongly that the public health fi- status of their organization.16 This imperative for im- nancial management competencies should be used as proved financial understanding and, most importantly, the basis for developing public health finance course accountability at the senior executive level was a strong syllabi. influence for including skill levels for senior public In the March-April 2007 finance issue of the Jour- health leaders. The committee concluded that financial nal of Public Health Management and Practice, 8 of the managers should perform at the proficient level in all 17 articles called for improvements in public health competencies. Competency performance levels for se- financial practices.19 Several authors noted that exist- nior managers were more diverse (38% proficient; 10% ing financial practices resembled those used by man- knowledgeable; and 53% basic). The complete compe- agers in related fields more than a century ago. In- tency document can be found in Table 5. creasing financial transparency and accountability can A review was also completed to compare the com- be accomplished through an adequately skilled and petencies to mandates in the Chief Financial Officers educated workforce. Transparency was recently estab- Act of 1990 (CFO Act).17 The review revealed that re- lished as an aim for the improvement of quality in sponsibilities stipulated in the CFO Act are compatible public health.20 Conducting financial analysis is a ma- with the competencies developed for the public health jor step to achieve financial transparency and promote financial management workforce (Table 5). Major ar- program quality improvement across the public health eas of consistency include (1) utilization of accounting system. and financial management systems, (2) financial anal- Identification of competencies is a major step to en- ysis to monitor resources, (3) improvement of financial able the identification of new responsibilities and align information systems, (4) budget monitoring and execu- them with appropriate skills. However, competencies tion, and (5) ensuring a qualified financial management will catalyze advances in transparency and account- workforce. ability only if stakeholders embrace a culture for pro- fessionalizing this segment of the workforce. Practice priorities Respondents to the University of Kentucky– administered survey identified knowledge of budget REFERENCES activities, financial data interpretation and com- 1. Pickett L. Competencies and managerial effectiveness: munication, and ability to assess and correct the putting competencies to work. 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