HLTH 6473 Module 1 Revenue Source Analysis Example

Where the $9.8 Million Comes From: A Revenue Source Analysis of a County Health Department and What It Means for Injury Prevention

Student Name

American College of Education

HLTH6473: Finance and Fiscal Management in Public Health

Module 1 Assignment

Instructor Name

August 3, 2026

Introduction

A composite county health department in central Indiana serves about 140,000 residents with a staff of 86 and an annual operating budget of $9.8 million. Its programs range from restaurant inspections and septic permits to immunizations, vital records, communicable disease investigation, maternal and child health and a small injury prevention section. That section runs the county's child passenger safety program, which checks car seats at a weekly inspection station and gives seats to families who cannot afford them. As the department's health educator responsible for injury prevention, I have been asked to understand where the department's money comes from before proposing any change to how the program is funded. This paper analyzes the department's revenue sources by size, restriction, stability and fit, then considers what the findings mean for injury prevention.

Why Revenue Structure Matters

Public health in the United States is funded through a mix of federal, state and local sources that has grown up piece by piece. Leider et al. (2018) describe a siloed system shaped by federalism, home rule and happenstance, in which health agencies receive particular dollars for particular tasks, little discretionary funding remains and even tracking how much is spent, by whom and on what is difficult. The structure matters because spending matters: Mays and Smith (2011) followed local health agencies for thirteen years and found that each 10% rise in local public health spending was associated with a drop of 1.1% to 6.9% in deaths from preventable causes, and the gains were greatest where resources were scarce. Knowing which dollars are flexible and which are fixed is the first step in deciding what a department can actually choose to do.

The Department's Revenue Mix

The department's revenue in the most recent fiscal year came from six sources. The county general fund, supported by property and local income taxes, provided 34%, about $3.33 million. State funds, including a per capita public health allocation and state-administered grants, provided 22%, about $2.16 million. Federal funds passed through the state, such as immunization, emergency preparedness, maternal and child health and injury prevention grants, provided 26%, about $2.55 million. Fees and licenses, mostly food service permits, septic and well permits and vital records, provided 10%, about $0.98 million. Clinical billing, chiefly for immunizations paid by Medicaid and private insurers, provided 6%, about $0.59 million. Foundation grants and donations provided 2%, about $0.20 million.

Restricted and Unrestricted Funds

The most important distinction in the mix is between restricted and unrestricted money. Federal and state grants, together 48% of revenue, are restricted to the purposes and activities in each grant agreement, with reporting requirements and, often, rules against moving money between line items without approval. Fees are legally tied to the services that generate them; food permit revenue, for example, supports environmental health inspections. Billing revenue is tied in practice to the clinics that earn it. Only the county general fund, about a third of the budget, is broadly flexible, and much of it is committed to salaries and mandated services such as communicable disease control and vital records. In practice, less than a tenth of the budget is available for new priorities in any given year.

Stability of Each Source

The sources also differ in stability. The general fund is relatively stable but exposed to property tax caps and local economic downturns, and it competes each year with roads, sheriff and courts. State per capita funding has grown in recent years but depends on the legislature's biennial budget. Federal grants arrive in multi-year cycles but can end abruptly when national priorities shift, as the department learned when emergency funds from the pandemic period expired. Fees rise and fall with construction and restaurant openings. Billing depends on reimbursement rates and on the number of insured clients using public clinics, which has declined as private pharmacies vaccinate more adults. Foundation gifts are small and usually one-time.

The Hidden Cost of Many Small Grants

Restricted funding also carries an administrative cost that does not appear in any single grant. The department manages 31 separate grants and contracts, each with its own budget, reporting schedule, performance measures and audit requirements. By the finance office's estimate, managing grants takes about 1.5 full-time positions, and program staff spend additional hours on reports that often ask for similar information in different formats. Many grants cap indirect costs at a rate below what the department actually spends on rent, information technology and finance, so the general fund quietly subsidizes the grants it receives. For a small section like injury prevention, a new $15,000 grant can cost almost as much staff time to manage as a $150,000 one. Any funding strategy for the child passenger safety program should therefore weigh not only how much a source provides but how much it costs to obtain and report on.

Fit Between Revenue and Mission

A revenue analysis should also ask whether the money matches the department's priorities. The county's community health assessment ranked unintentional injury among its top concerns, with motor vehicle crashes the leading cause of injury death for children. Yet injury prevention receives about $412,000, roughly 4% of the budget, most of it from a single federal injury prevention grant passed through the state and a small state highway safety grant for child passenger safety. The child passenger safety program itself costs close to $100,000 a year, and its seat supply depends on the highway safety grant and donations. The program's strength, evidence that distributing seats with education increases correct use (Zaza et al., 2001), is not matched by stable funding.

Vulnerabilities for Injury Prevention

The analysis reveals three vulnerabilities. First, concentration: most injury prevention money comes from two grants, so losing either would cut the section by more than half. Second, restriction: the grants pay for specified activities and cannot be moved to emerging needs, such as the recent rise in young children's injuries from unsecured furniture. Third, timing: the highway safety grant is awarded each federal fiscal year, beginning October 1, while the county fiscal year begins January 1, so the program regularly spends its first quarter waiting to know its seat budget.

Opportunities

The analysis also suggests opportunities. The two hospitals in the county report community benefit spending each year and have named child injury as a priority. The county's largest auto insurer has a foundation that funds traffic safety. Fire departments already host fitting stations in several neighboring counties and could provide space and certified volunteers. And the department's own general fund, though tight, could provide a small stable base if the program demonstrates value. Evidence that local public health spending is associated with lower preventable mortality (Mays & Smith, 2011) supports the argument for local investment.

Limitations of the Analysis

This analysis relies on the department's adopted budget and year-end revenue reports, which classify some funds inconsistently; for example, some federal funds are recorded as state revenue when passed through state agencies. Categorizing funds as restricted or flexible also involves judgment. A fuller analysis would trace five years of revenue to separate trends from one-year fluctuations.

Conclusion

The department depends on a mix of revenue in which most dollars are restricted and only a small share is flexible, and in which injury prevention, despite its ranking among community concerns, is funded by two grants. The child passenger safety program therefore rests on a narrow and unstable base. The following modules will build a justified program budget, develop a funding strategy, examine how the department allocates its limited flexible funds, analyze the program's costs and set out a financial plan that makes the program more secure.

References

Leider, J. P., Resnick, B., Bishai, D., & Scutchfield, F. D. (2018). How much do we spend? Creating historical estimates of public health expenditures in the United States at the federal, state, and local levels. Annual Review of Public Health, 39, 471-487. https://doi.org/10.1146/annurev-publhealth-040617-013455

Mays, G. P., & Smith, S. A. (2011). Evidence links increases in public health spending to declines in preventable deaths. Health Affairs, 30(8), 1585-1593. https://doi.org/10.1377/hlthaff.2011.0196

Zaza, S., Sleet, D. A., Thompson, R. S., Sosin, D. M., & Bolen, J. C. (2001). Reviews of evidence regarding interventions to increase use of child safety seats. American Journal of Preventive Medicine, 21(4 Suppl.), 31-47. https://doi.org/10.1016/S0749-3797(01)00377-4