CFO vs. Controller: Which Financial Leader Does Your FQHC Really Need?
For Federally Qualified Health Centers, the question isn't just about titles or organizational charts. It's about survival, compliance, and mission delivery. An ineffective financial leadership structure can result in missed grant deadlines, failed audits, or strategic decisions made in the dark.
After 25 years of working exclusively with FQHCs and community health centers, we've seen this question play out hundreds of times. And here's what we've learned: the answer isn't the same for a hospital, a tech startup, or even another nonprofit. FQHCs face a unique set of financial complexities that require thoughtful consideration of both the role and the person filling it.
Understanding the Roles in the FQHC Context
Before we can answer which role your health center needs, we need to understand what these positions actually mean for FQHCs, because the textbook definitions don't always translate.
The FQHC Controller: Your Compliance Guardian
In a community health center, a controller does far more than produce financial statements. They're your first line of defense against compliance failures that could jeopardize your funding.
A strong FQHC controller manages:
Grant-specific accounting and cost allocation across multiple federal funding sources
UDS reporting accuracy and reconciliation
340B program financial tracking and audit preparation
Sliding Fee Discount Program financial documentation
Medicare and Medicaid cost report preparation
Month-end and year-end close processes specific to healthcare accounting
Audit coordination with auditors who understand FQHC requirements
The FQHC CFO: Your Strategic Navigator
A CFO in a community health center operates at the intersection of mission and money. They translate complex financial realities into strategic choices about where and how to serve patients.
An effective FQHC CFO provides:
Strategic financial planning aligned with community health needs
Payer contract analysis and negotiation strategy
Service line profitability assessment within the FQHC mission context
Capital planning for site expansion or equipment investments
Revenue cycle optimization specific to health center reimbursement
Cash flow forecasting accounting for grant payment timing
Board-level financial communication and strategy
New program feasibility analysis and financial modeling
Here's where many boards get tripped up: they overemphasize FQHC experience when recruiting a CFO. While industry knowledge certainly helps shorten the learning curve, we've learned from 20+ years of FQHC CFO recruiting that successful financial leadership requires a balanced set of capabilities. We call this the "six-legged stool" of CFO leadership:
Communication: Ability to translate complex financial information for diverse audiences
Focus: Discipline to prioritize what matters most amid competing demands
Strategy and Analysis: Forward-looking insight to guide organizational decisions
Accounting Knowledge: Strong foundation to dig into details and support the team
Hard Work: Stamina and commitment to handle the extensive demands of the role
Healthcare and FQHC Experience: Familiarity with the industry and its unique requirements
FQHC experience is just one leg of the stool, not the whole seat. A CFO who excels at communication, strategic thinking, and has strong accounting fundamentals can learn FQHC-specific requirements. However, a CFO with extensive FQHC experience but weak communication or strategic analysis skills will struggle to be effective.
That said, FQHC-specific knowledge needs to come from somewhere. Whether that's the CFO's background, training and mentorship, or access to specialized advisory support, your health center needs someone who understands how federal grant cycles affect cash flow, how to maximize revenue while maintaining mission, and how to explain complex healthcare finance to community-based boards.
Considering Alternative Models
The traditional controller vs. CFO question assumes you're hiring full-time positions. However, many health centers face constraints that make this challenging: limited talent pools (especially in rural areas), high turnover costs, and the reality that even strong candidates need time to develop FQHC-specific expertise.
Some organizations address these challenges through fractional or outsourced arrangements. This model can provide immediate FQHC-specific expertise, continuity during staff transitions, and cost-effective access to senior-level capabilities. For health centers exploring this option, we've written more about the strategic case for outsourced CFO services.
However, the right financial leadership structure ultimately depends on your specific circumstances, which we'll explore in the following sections.
Matching Your Financial Leadership Structure to Your Organization
The right answer depends on several factors specific to your health center:
Revenue and Complexity
Under $5 Million in Annual Revenue
Most health centers at this size need strong accounting foundations but may not require full-time executive-level positions. Focus on getting clean books, establishing solid grant accounting processes, and building reliable financial reports.
$5-$15 Million in Annual Revenue
At this level, you need controller-level expertise to manage compliance and ensure reliable financial operations. This doesn't necessarily mean a full-time hire—many health centers in this range successfully use fractional controller services or combine in-house accounting staff with part-time controller support. What matters is having someone with controller-level capabilities ensuring accuracy and compliance.
Key priorities: Reliable monthly financial close, accurate cost allocation across grants, improving revenue cycle performance, UDS and cost report preparation, strategic planning for growth.
$15-$30 Million in Annual Revenue
You will likely need a full-time controller and increasing CFO-level involvement. At this scale, the volume and complexity of financial operations typically require dedicated controller capacity. CFO functions become increasingly important as you manage more sophisticated financial analysis, payer contract optimization, multi-site operations, and preparation for growth or new service lines.
$30+ Million in Annual Revenue
At this scale, you typically need both controller and CFO capabilities to manage strategic financial planning, complex capital projects, sophisticated budget management across multiple sites, and advanced revenue cycle analytics.
Geographic and Market Factors
Your location significantly impacts your financial leadership options.
Rural Health Centers face unique challenges:
Severely limited local talent pool for specialized healthcare finance roles
Difficulty attracting experienced professionals to relocate
Often operating as the sole major healthcare provider in the community
Greater isolation from peer organizations and professional networks
Urban Health Centers face different pressures:
Higher salary expectations reflecting urban cost of living
More competition for qualified FQHC finance professionals
Often managing more complex multi-site operations
Greater board sophistication requiring more strategic financial analysis
Organizational Maturity and Growth Stage
Your current organizational phase matters as much as your size.
Startup Phase (New Health Centers)
You need FQHC-specific knowledge immediately to establish proper systems and avoid costly mistakes. Whether this comes from a candidate with prior experience or through strong advisory support, priorities include setting up proper chart of accounts, establishing grant accounting, creating compliant financial policies, and building financial infrastructure that can scale.
Stable Operations
If your health center is in a steady state with predictable operations, prioritize maintaining compliance, optimizing operations, ensuring consistent reporting, and managing sustainable growth.
Active Growth or Change
If you're expanding sites, adding major service lines, or pursuing significant capital projects, you need intensive CFO-level strategic support. Here, the strategic analysis and communication legs of the stool become especially critical. Priorities include financial modeling for expansion, capital planning, cash flow management during growth, and payer strategy for new services.
Post-Crisis Recovery
If you're recovering from financial distress, audit findings, or leadership transition, you need experienced financial leadership immediately. In crisis situations, all six legs of the stool matter. Priorities include correcting past issues, rebuilding board confidence, establishing reliable processes, and creating a clear path forward.
To illustrate how these concepts work in practice, here's a real example from our work with a health center navigating growth and transition:
Fractional CFO Support: A Client Success Story
A few years ago, a health center reached out to CLC with an urgent need: their CFO had left, and the organization required immediate support to complete its budget. At the time, budgeting was handled solely by the finance department, without input from department managers.
Stepping in as interim CFO, CLC quickly identified opportunities to strengthen the process. We recommended involving department managers and budgeting patient revenue at the provider level. Given the tight timeline, the organization focused that first year on patient revenue, with plans to expand manager involvement in the next cycle.
As the partnership continued, the question of whether the health center needed a full-time CFO or whether a fractional CFO model would be more effective came up often. As we discussed earlier in this article, the right financial leadership structure depends on your specific organizational reality. After thoughtful discussions, the organization chose to continue with CLC in a fractional CFO capacity.
This model has proven to be the right fit. The health center has a strong controller who is eager to grow into a Director of Finance or eventual CFO role. In the meantime, CLC provides strategic oversight, guiding initiatives around forecasting, scenario planning, and long-term financial strategy. This arrangement allows the health center to access strong strategic and analytical capabilities (two critical legs of the CFO stool) while their controller develops the experience needed for long-term leadership.
When we first partnered, the health center was in a phase of Stable Operations. Today, they are navigating Active Growth and Change, with CLC's support ensuring their financial strategy aligns with their mission and growth trajectory.
The ultimate goal is clear: to phase out fractional support once the organization reaches the size and complexity that requires daily, in-house leadership. Until then, CLC remains a trusted partner, providing the right balance of stability and strategic vision.
The Questions Your Board Should Be Asking
If your board is discussing financial leadership structure, here are the questions that will lead to the right answer for your organization:
1. Do we have reliable, accurate financial reports that the board can trust and understand?
If no: You need controller-level expertise and someone who can focus on getting the technical details right.
2. Can our current financial leadership explain the financial implications of strategic decisions we are considering?
If no: You need CFO-level strategic analysis and communication capabilities.
3. How long could our organization function if our CFO or controller left tomorrow?
If the answer is "not long": You need to build in redundancy and succession planning.
4. Does our financial leadership have access to FQHC-specific knowledge about UDS, cost reports, and 340B compliance?
If no: This expertise needs to come from somewhere, whether through the individual's experience, training, or advisory support.
5. Are we making financial decisions based on gut feeling rather than solid analysis?
If yes: You need more sophisticated financial analysis capability, which is CFO-level work.
6. How much are we spending (or planning to spend) on financial leadership, and what are we getting for that investment?
Consider total cost - including salary, benefits, recruiting, turnover, and training against the value delivered.
Common Mistakes FQHC Boards Make
After working with hundreds of health centers, we have seen these patterns repeatedly:
Overemphasizing FQHC experience at the expense of other critical skills: A candidate with extensive FQHC background but weak strategic thinking or poor communication skills will struggle. Look for the balanced skill set represented by all six legs of the stool.
Hiring a hospital CFO without considering fit: Hospital financial leadership experience doesn't translate directly to FQHCs. The business models, revenue sources, compliance requirements, and mission dynamics are fundamentally different. However, a strong hospital CFO with the right balance of skills and willingness to learn can succeed with proper support.
Promoting a strong accountant to controller without adequate support: Technical accounting skills are essential but don't automatically include FQHC-specific knowledge or the broader skill set needed for leadership. Ensure promoted staff have access to training, mentorship, and resources to succeed.
Assuming "Nonprofit Experience" equals "FQHC Experience": Even other nonprofit healthcare experience doesn't prepare someone for all the unique complexities of FQHC finance, though it may provide a helpful foundation.
Waiting too long to get help: By the time financial problems are obvious to the board, the organization is often in crisis. Earlier intervention prevents crises.
Underestimating the learning curve: Even candidates with strong foundational skills need time to become fully effective in FQHC-specific work. Plan for this reality rather than expecting instant expertise.
Making the Decision: A Framework
Here is a practical decision framework based on what we have seen work for hundreds of health centers:
Step 1: Assess Your Current State
What financial leadership capability do you have today?
What are your most pressing financial leadership gaps?
What has turnover cost your organization over the past three years?
Step 2: Define Your Needs
What are your strategic priorities for the next 2-3 years?
What level of financial sophistication do those priorities require?
What compliance requirements must you meet flawlessly?
Which of the six legs of the stool are most critical for your current situation?
Step 3: Evaluate Your Options
Full-time positions: Do you have the budget, and can you attract qualified talent with the right balance of skills?
Alternative arrangements: Would specialized FQHC expertise at different engagement levels serve your needs?
Hybrid model: Would combining in-house support staff with senior-level expertise work?
Training and development: Can you develop FQHC expertise in a strong candidate who has the other critical skills?
Step 4: Consider Your Risk Tolerance
What is the cost of getting this wrong?
How long can you afford a vacant position or learning curve?
What would audit findings or compliance issues cost your organization?
Can you provide adequate support and mentorship during the transition period?
Step 5: Make a Decision and Commit
Choose the model that best fits your organization's reality
Resource it appropriately, including training and development
Provide necessary support for success
Give it time to work before making changes
The Bottom Line for FQHC Leaders
The CFO vs. controller question for FQHCs isn't really about titles. It's about ensuring your health center has the specialized financial expertise needed to maintain compliance, make sound strategic decisions, and ultimately serve your community effectively.
When evaluating candidates, remember the six-legged stool framework. FQHC experience is valuable, but it's just one leg. The most successful financial leaders bring communication skills, strategic thinking, focus, solid accounting knowledge, and a strong work ethic. FQHC-specific knowledge can be learned by candidates who have these other critical capabilities.
The health centers that thrive financially aren't necessarily the ones with the biggest finance departments or the most experienced FQHC veterans. They're the ones that match their financial leadership structure to their organizational reality and ensure they have the right balance of skills and expertise driving their financial strategy and operations.
About the Author
Tafta McCain, Lead Consultant
Community Link Consulting
Phone: 509-226-1393
Email: taftam@communitylinkconsulting.com
Tafta brings 14+ years of experience as Chief Financial Officer at Mainline Health Systems, Inc., a Federally Qualified Health Center in Southeast Arkansas. Throughout her tenure, she built and managed comprehensive financial operations for a multi-site FQHC serving rural Delta communities. Her hands-on experience navigating the exact challenges discussed in this article (from building budgeting processes to strategic financial planning to supporting organizational growth) gives her unique insight into what financial leadership structures actually work for community health centers. Originally from Lake Village, Arkansas, Tafta is passionate about the impact FQHCs have on small, rural communities and is committed to helping health centers across the country strengthen their financial operations to better serve their patients.
