GOAL #4
Sound Financial Planning
Introduction
The fiscal health of a program is not entirely within the control
of that program. Each program is dependent on its legislature to
set specific offender-fee or assessment levels, or to appropriate
funds, for program operations and payments. (Even Federal funds
through VOCA, while independent of these processes, are calculated on the level of state payments, and thus are dependent on how
much is available to state programs through state sources.)
Programs that rely on offender fees and assessments don't really
know to any precise degree how much money will be gained from
that source each year. Additionally, programs must rely on others
in the courts and correctional systems to assess and collect the fees.
Neither do programs have much control over the amount of
money they will be asked to pay out in awards to victims each
year. While most programs have a pretty good sense of what they
will be obligated to pay from year to year, a significant degree of
unpredictability creeps into any attempt to make exact projections.
If applications are up, more may have to be paid out; the converse
is true if applications decline.
In this uncertain climate, keeping a weather eye out for impending fiscal storms is imperative.
Programs need to watch carefully their fiscal stability, and take
steps to maintain sufficient reserves. Programs need to know what
options are available to them in increasing funding or cutting costs
well in advance of any problems that may arise, rather than simply
try to react to a crisis when it happens.
The objectives within this section focus on the following:
o Analyzing revenue and payment trends to stay fully informed
and keep ahead of any potential fiscal problems;
o Maximizing funding through the basic mechanism available
to the program, whether that be offender fees or legislative
appropriations, and exploring new sources when possible;
o Recouping payments through effective restitution and
subrogation recovery;
o Instituting cost controls (for example, benefit limits, fee
schedules, professional review of medical bills), when necessary to ensure adequate funds for payment of all eligible
applications; and
o Administering funds according to sound accounting and
management principles.
By attending to each of these objectives, and applying the strategies described herein, programs should be better able to plan and face the inherent uncertainties that characterize the fiscal situation of every compensation program.