Based on the Case below, Write a brief explanation that explains why the case represents its particular ACHE competency domain. (Be sure that the explanation justifies the assigned competency domain based upon the facts and circumstances of the case.)

Case:

Case 5: Business Skills and Knowledge

The director of food and nutrition services for a rural hospital had been in the position for five years and had repeatedly received strong and highly favorable performance reviews. She knew that the senior administration were pleased with her work and that her overall reputation throughout the hospital was quite positive. She was frequently asked to be on major committees and at times to serve on project management teams. From all accounts, she was in a good place and there was no signs this would not change going forward.

In January her boss announced that she was resigning her position to relocate with her husband to Utah and seek a health administration position with one of the healthcare systems in and around Salt Lake City. The news was not particularly disturbing to the director of food and nutrition. She felt she had a fine relationship with this vice president but she also believed she was well positioned to work for any new appointment to that VP slot.

By April, the new vice president was on board and quickly announced that his immediate concern was to develop a new budgetary approach for the six departments that reported to him to strengthen their collective bottom line and to create a more rigorous budgetary process going forward. At the core of this new approach would be zero-based budget process to begin with the new budgetary cycle for the next fiscal year period. Preliminary budget submissions for each of the six departments would be due by May 1 with the expectation that finalized versions of the budget would be on his desk by June 1 ready to be folded into the entire hospital budget for Board approval in June 15^th of that year.

It quickly become apparent to the director of food and nutrition that she knew little about zero-based budgeting. She had heard of the term, but never in the five years of her work with the hospital had she ever been asked to do anything like this in terms of budget preparation and submission. Most of her previous experience with her departments budget would be relatively useless given what the new VP was expecting. It was a major dilemma. Should she try and work her way through the process and hope that she could master enough of the essentials that she could pull it off? Or should she seek professional assistance and get the knowledge and skills needed to produce a zero-based budget that was accurate and would be successful for her department? If she went for the first strategy, she might avoid any embarrassment with the new VP although that was, by no means, a sure thing. If she opted for the second approach, she would acknowledge this blind spot in her financial management competencies but she would produce a quality budget document and know that her department would not suffer.

In the end she did a little of both. She sought some measure of assistance from another department head who she believed understood the zero-based budget process, but avoided going to anyone in the finance department or her new boss for help. With determination and a desire to work through the issue, she produced a zero-based budget ready for submission by May 1. It contained the right language for such a budget and its computations for the individual line items were accurate. On the surface it would pass for a legitimate zero-based budget. The crisis was met and passed. By mid August of that new fiscal year, she realized that although she had effectively satisfied her new boss and avoided any potential embarrassment, she would be paying the price of her lack of knowledge and skill around zero based budgeting.

The resources her department was so use to having began to drop. More financial reports were now being requested from Finance on a monthly basis to justify spending requests and revenue projections. By October, she realized the cost of trying to fool her fool and perhaps, herself. The department would not be able to operate for the remaining seven months of the fiscal year without major adjustments and allowances that were not planned at the beginning of the fiscal year. That March when the annual performance reviews were being done, the director of food and nutrition services received the lowest performance rating of any of the six departments reporting to her VP. Her development plan for the next year had one critical goal to achieve to gain command of the new budgetary process and demonstrate that her department would not suffer from this process in the future.