The pandemic caught much of the world off guard, leaving many to wonder how they could plan for a similar unprecedented situation in the future. Planning for the unexpected should be at the forefront of everyone’s minds, as it can lessen the blow of a disaster or potentially prevent it altogether. Fortunately for the public sector, year-round planning has always been considered an essential function to a healthy organization.
From annual audits to budgeting, the public sector is faced with many processes that take time and diligence. Year-round planning may seem tedious, but it is much more than simply a task—it is a strategy that allows organizations to plan and prepare for both seen and unforeseen situations, as well as plot out deadlines, goals, and objectives for the year.
Drafting and finalizing a year-round plan isn’t a one-and-done process. Organizations might sit down at the close of every year to discuss big-picture items, but keeping a year-round plan healthy and robust means constant vigilance. For instance, if a government wants its annual audit to go smoothly, this means it must plan to reconcile accounts monthly, accumulate the right documentation, and keep information required from auditors at the forefront at all times. Organizations might also have to consider certain legislation changes, like tax regulations that could affect how much taxpayers choose to donate to a nonprofit.
While the public sector has seen many of the same issues pop up over time, some are new and based on current regional, national, and worldwide issues. The public sector must keep up to date on trends in the economy, workforce, and beyond, and consider them in their year-round planning efforts.
What’s trending: technology, economic changes, and HR
Currently, many public sector entities—specifically governments and non-profits—are experiencing demand in remote-style work and online solutions for workflow automation, payment, and data access. As these entities expand their technology resources and capabilities, this also increases the potential for cyberattacks. Governments and schools are targets, as they hold sensitive information, but even nonprofits are susceptible as donor information can be targeted as well.
Additionally, economic trends play a role for local public sector entities and should be considered throughout each year. Economic changes impact governments, non-profits, and schools differently than the corporate world. For example, governments and schools that rely on property tax values will be impacted by an economic downturn, but not as quickly as for-profit companies. Nonprofits, however, could be more directly impacted if needs for their services increase but donations decrease because donors are feeling the effects of the downturn. Forecasting and year-round planning for the public sector can set up organizations to best handle these times of economic uncertainty.
Unsurprisingly, employee hiring and retention are additional pain points for the public sector. Many industry workers in recent years have hit retirement age, and entities are unable to replace them adequately as expertise in public sector operations, compliance, and strategy is in demand more than ever. The surge of grant funding during the pandemic has created more compliance requirements for public sector organizations to track and report. Additionally, the technology era has increased stakeholders’ desires and need for instant information.
These demands are accentuated in the public sector as they have multiple funding sources and related funding restrictions that complicate the reporting process, as well as multiple stakeholder groups to consider when determining what information is most useful. The combination of these competing demands and the expertise to navigate them making finding executive level talent in the public sector a challenge.
It’s important to have the right people, tools, and data when creating and carrying out a year-round plan. At Rehmann, as specialists in consulting with the public sector, we can help ensure organizations are prepared for the future.
Need help managing cashflow so you can focus on how to engage donors? You may want to consider an outsourced CFO, who can take care of financial processes on the backend. Worried about the end-of-year audit? A professional advisory firm like Rehmann can help throughout the preparation process and ensure you have the right documentation. For any level of support needed, these individuals and teams are there to aid public sector organizations and build multi-year plans that keep them healthy and standing for years to come.
Learn more about addressing your organization’s top operational challenges and how best to plan ahead here.
Amy Rottman, CPA, is a principal at Rehmann. She serves governmental and not-for-profit organizations, holding the position of controller, finance director, and chief financial officer with her clients. Connect with Amy by emailing her at [email protected] .