Financial management of academic clinical departments

Based on their ten years of experience, the authors describe how they have organized and managed the financial resources in the department of medicine at the University of Maryland School of Medicine. They outline how to develop realistic budgets to best account for different sources of income and expenses and how to utilize subsidies and incentives to challenge division heads and faculty to administer their units efficiently and maximize income. The values of regular financial reports, of an annual retreat of the division heads, and of effective departmental administration to maintain financial stability and progress of are emphasized. Finally ,the authors explain why they favor a more open policy of sharing much of the department's financial information rather than restricting such data to leadership.