Date of Award

6-1980

Document Type

Thesis

Degree Name

Master of Arts: Health Administration

First Advisor

Boyd Morros

Second Advisor

Lawrence M. Millner

Third Advisor

John Twiehaus

Abstract

This study examines the adoption and implementation of a decentralized budgeting model within a public mental‑health institution, focusing on the administrative, financial, and organizational consequences of shifting from a centrally controlled budget framework toward local unit responsibility. Drawing on archival records, budget data, and administrative narratives from the institution’s transition period, the analysis highlights how decentralization altered decision‑making dynamics, cost behaviour, service orientation, and internal accountability structures. The decentralization initiative empowered individual units by giving them budgetary control over expenditures previously managed at the centralized level, thereby increasing their autonomy over staffing, program purchases, and resource reallocation. This shift brought several notable outcomes: units responded more quickly to service demands, exercised greater discretion in resource re‑deployment, and exhibited improved alignment between local services and community needs. However, the decentralization also introduced challenges: variance in budgeting capacity across units led to differential performance; units with stronger managerial expertise and fiscal discipline fared better than those lacking such capacity. The study documents how budgetary decentralization exposed underlying disparities in administrative capabilities, and in some cases increased inter‑unit competition for resources. It further explores the impact on cost control and efficiency: while some units achieved cost savings and re‑prioritized resources effectively, others experienced budgetary shortfalls, requiring central rebound support or reorganized oversight. The findings suggest that decentralization in public mental healthcare can enhance responsiveness and local innovation, but must be balanced by adequate oversight, training, and capacity‑building to prevent fragmentation, inequity, and unintended cost escalation. The study contributes to the literature on fiscal decentralization in health systems by demonstrating how budgeting reforms play out in a real‑world institutional context, offering lessons for policymakers considering decentralization as a tool for organizational change in public mental health services.

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