FQHC provided quality services but lacked sound business practices, threatening the organization’s long-term viability

Challenge:

Located in the heart of a large Midwestern city, this federally qualified health center provided a full range of comprehensive medical, education, testing, and supportive services. This FQHC was responsible for approximately 50,000 residents in a specific area. However, less than 10% of those residents took advantage of the clinic’s services.

This organization had good intentions and provided a high level of quality care. However, key staff members did not have a full understanding of sound business practices.

The US Department of Health and Human Services hired Joseph Boyd to review this organization. In his audit, Joseph found:

• No one was looking at the budget, and there were no regular reconciliations. As a result, leaders did not know where they stood financially, and could not plan for the future.
• Fund management practices were greatly out of compliance. The organization was not properly tracking expenses or the income generated from clinicians. Often, there were no source documents for expense and revenue entries.
• The organization did not have a fiscal policy and procedures manual.
• The staffing pattern and salaries needed to be adjusted to better support the strategic mission. With adjustments, the organization could reach more consumers and have more impact. For example, they could replace one doctor with two registered nurses.
• The leadership team needed to focus on generating funds. Opportunities included timely billing to the consumers’ health insurance providers (including Medicare and Medicaid) and charging sliding-scale fees to consumers.
• By increasing and improving outreach strategies, they could deliver more services, generate significantly more program income, operate on a sound financial footing, and achieve greater results in the community they served

Solution:

“You can’t stay in business by giving everything away,” Joseph says. “As a federally qualified health center, this organization could not continue to rely solely on that income source. It’s similar to a start-up corporation receiving money from an angel investor – the seed money is used to create a solid foundation to build the organization. The expectation is that you implement various strategies to continually generate funds.”

In his report and presentation, Joseph outlined multiple financial management issues including the lack of budget control, weak program income generation, lack of policies and procedures, and issues with staffing patterns. Since the organization lacked the internal knowledge of sound fiscal and administrative practices, Joseph spent several days working with the team, side-by-side, to overcome deficiencies.

Result:

“I introduced the entire team to basic fiscal guidelines, helped them reconcile the books, clarify their actual standard processes, and create policies and procedures that complied with generally accepted accounting principles according to the manner in which the agency was conducting business,” Joseph explains. “Together, we built the fiscal infrastructure to ensure the organization will continue to be in business – it will continue to provide quality services – for many years to come.”