The North Carolina’s Department of Health’ Evaluation

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Table of Contents

Budget Overview
Budgeting Assessment
Analysis of Budgeting Plans and Actual Expenditures
Implications of Foreign Policy
Budget Request and Recommendations
Conclusion
References

The effectiveness of the work of health and human services departments in the United States depends on the departments’ approaches to budgeting because of the necessity to set priorities, refer to the developed plan, allocate resources, and monitor the use of financial resources according to the set points. The activities of North Carolina’s Department of Health and Human Services also depend on the authorities’ approach to budgeting in order to meet the department’s needs (NC Department of Health and Human Services, 2014). The purpose of this paper is to provide the analysis of North Carolina’s Department of Health and Human Services’ budget, to discuss the political and international impacts on the budget planning, and to provide the recommendations for the improvement of the department’s budget.

Budget Overview

The budget of NC Department of Health and Human Services should be determined as a budget of an executive department rather than an independent agency because the budget is prepared by the staff of the budget sections in order to be discussed by the General Assembly at the state level. Furthermore, it is important to note that the jurisdiction over North Carolina’s Department of Health and Human Services’ budget is shared by the U.S. Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies (Milakovich & Gordon, 2012, p. 112). It is also significant to state that the federal budget is organized according to the functional classification. The budget requests fall into 19 functions and associated sub-functions that are divided in relation to the purpose of the spending (Functional classification, 2014).

From this perspective, the budget of North Carolina’s Department of Health and Human Services is regulated according to such main functions as the Health function and its sub-functions (550-554) and the Medicare function and its sub-functions (570-571) (Functional classification, 2014). The spending proposed for North Carolina’s Department of Health and Human Services is also divided into the budget authority, as the total amount of the proposed spending, and outlays, as the actual amount of expenditures (Starling, 2010, p. 492; Milakovich & Gordon, 2012, p. 23). For instance, for the FY 2014, the budget authority was $5 billion, and possible outlays were determined as $4 billion (NC Department of Health and Human Services, 2014). The actual outlays for 2014 were about $4.2 billion (NC Department of Health and Human Services, 2014). Thus, the spending was enough in order to cover the previously determined costs.

Budgeting Assessment

The spending is also divided into mandatory and discretionary budgets. Focusing on the FY 2012 mandatory and discretionary budgets in relation to North Carolina’s Department of Health and Human Services’ budget, it is important to take into account that discretionary budgets are determined as a result of the annual appropriations process, and mandatory budgets are associated with specific programs and laws (Starling, 2010, p. 498; Milakovich & Gordon, 2012, p. 25). As a result, the assessment of the FY 2012 mandatory and discretionary budgets is an effective approach in order to determine such two political impacts and accountability areas as the Medicaid budget and problem of fund savings (The Governor’s recommended budget adjustments, 2014, p. 75). Referring to the data of the FY 2012, the most obvious political influence was associated with the increases in investment in Medicaid that contributed to the growth of funding to $3.6 billion (NC Department of Health and Human Services, 2014). The further increases in funding were planned for the FY 2014-2015. The other important point that needed to be revised in the FY 2014-2015 was the maximization of fund savings and federal block grants with references to the political influence and development of projects contributing to increasing revenues in the area.

Analysis of Budgeting Plans and Actual Expenditures

The budgetary decisions related to funding of NC Department of Health and Human Services are primarily influenced by the work of budget sections in the state. The Health and Human Services Section works in order to determine the budgets for all the divisions of the NC Department of Health and Human Services. The State Governor decides on the budget for the department, and the budget section is responsible for preparing the budget plan in order to present it to the General Assembly for the discussion (NC Department of Health and Human Services, 2014). The next steps are the budget execution and administration according to the General Assembly’s decision. This development of the budget at the state level is significantly influenced by the discussion of the budget at the federal level.

From this point, the work of federal, state, and local health departments depends on each other in relation to the set budget limits for the concrete fiscal year. As a result, the process of planning the current and future budget for the next years also depends on the discussion of the spending at all levels because mandatory budgets are determined by costs associated with federal and state programs and laws (Milakovich & Gordon, 2012, p. 25). For instance, the increased Medicaid costs for the FY 2012 were associated with the changes in the federal budget and development of the program nationwide. As a result, NC Department of Health and Human Services responded with proposing Risk Reserve Funds in $5 million for next several fiscal years (NC Department of Health and Human Services, 2014; The Governor’s recommended budget adjustments, 2014, p. 75-77). The other revisions and propositions in the budget for FY 2013, 2014, and 2015 were associated with changes in the tax and insurance policies at the federal and state levels. The additional fund reserves should be proposed in order to address the associated increased costs.

Implications of Foreign Policy

The international policy can have the direct impact on the current year’s budgets and on the future annual budgets because of changes in the global policies that are oriented to addressing the health problems. As a result, the FY 2015 President’s Request is influenced by the necessity to develop Global Health Programs among other issues. This response is associated with the Intergovernmental Organizations’ impact and the work of the World Health Organization developing strategies to overcome the Ebola menace in the world. Therefore, the FY 2015 President’s Request regarding the foreign assistance accounts is about $10 billion (USAID, 2014). These approaches to determining annual budgets can be discussed as influential while focusing on the role of the foreign policy in the process. The direct impact of changes in the foreign policies on the budgets of NC Department of Health and Human Services are in the fact that the State Governors are inclined to revise the spending associated with the health care training in North Carolina.

Budget Request and Recommendations

Focusing on the budget request for the next fiscal year, it is necessary to recommend two appropriate ways with the help of which North Carolina’s Department of Health and Human Services will be able to improve the planned budget for the next fiscal year (NC Department of Health and Human Services, 2014). The recommendations are the following ones:

The first appropriate strategy is the focus on increasing THE Reserve Funds used in North Carolina in order to cover increased Medicaid costs. This approach is necessary because the increases in Medicaid costs were observed during several previous fiscal years (The Governor’s recommended budget adjustments, 2014, p. 75-77). It is also possible to propose the creation of reserve funds for addressing the other health and insurance issues.
The second appropriate way is the increases in employees’ compensation and benefits. The salary increases are necessary in order to guarantee the employees’ commitment and the high level of the quality of the provided services in North Carolina. The investment into the employees’ compensation and benefits sector is expected to be about $6 million in order to cover all the associated costs (The Governor’s recommended budget adjustments, 2014, p. 75-77).

From this point, the two main aspects that should be taken into consideration while developing the budget request are the creation of the reserve funds and the increase in the employees’ salaries according to the changed policies of North Carolina’s Department of Health and Human Services.

Conclusion

The budget of North Carolina’s Department of Health and Human Services is determined with references to major political influences at the federal and state levels. As a result, the budget authority and outlays can be different. Furthermore, the budgetary decisions are made by the State Governors and implemented by the staff of budget sections after the discussion by the General Assembly. Thus, while developing the budget request for the fiscal year, it is necessary to refer to the analysis of mandatory and discretionary budgets and prediction of increases in costs and expenditures.

References

Functional classification. (2014). Web.

Milakovich, M., & Gordon, G. (2012). Public administration in America. New York, NY: Cengage Learning.

NC Department of Health and Human Services. (2014). Web.

Starling, G. (2010). Manage the public sector. New York, NY: Cengage Learning.

The Governor’s recommended budget adjustments. (2014). Web.

USAID. (2014). Web.

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