Financial sustainability for public services

By Ari Magalhaes FGIA GAICD, Founder and Principal - OmniStrategic

Financial sustainability depends on the cost of delivering services and the revenue available to fund them. Advisory work assesses funding models and growth opportunities against organisational purpose and delivery capacity. Economics underpins the analysis.

Cost-to-serve analysis establishes the full cost of each service, including overheads. Boards can use that evidence to decide pricing and subsidies, assess funding agreements and prioritise investment.

Activity-based costing and cost recovery work for a council delivered $12M in savings and new revenue within six months. A growth strategy for a disability and health services provider established a $500K net new revenue roadmap.

Engagements carry the agreed strategy through business cases and pilots into a funded transformation roadmap. Delivery includes capability building and verification of outcomes. Historical turnaround experience includes a 75% financial recovery as Acting CFO.

Common questions

How should restricted funding be treated?

Assess the permitted uses and conditions of each funding agreement. Keep restricted funds visible in forecasts so decisions distinguish available operating cash from money committed to specific services.

How quickly can a turnaround show results?

Early cash improvements often appear within three to six months. Structural change takes longer.

Which sectors does this apply to?

All sectors. The approach has been tested in more than 20 industries, from big pharma to food retail.