Why Budgeting Is Essential for a Strong Compliance Program

Jessica Zeff
Nov 11
3 min read

In today’s increasingly regulated environment, organizations can no longer afford to treat compliance as an afterthought. A well-funded compliance program is not just a nice-to-have—it’s a business imperative. Yet, many companies continue to underestimate the level of resources, expertise, and planning required to build and sustain an effective compliance function.

In this episode, we’ll explore why compliance budgeting matters, the risks of underfunding compliance programs, and how to strategically plan for ongoing regulatory challenges—particularly in light of recent updates like the 2025 Medicare Final Rule.

Compliance Is Not a Cost Center—It’s a Risk Shield

One of the biggest misconceptions about compliance is that it doesn’t generate revenue and, therefore, doesn’t warrant significant investment. However, compliance teams play a vital role in protecting the organization from legal, financial, and reputational damage.

Unlike departments that directly drive profits, compliance functions are often viewed as support roles, which can lead to unjustified budget cuts. But this line of thinking overlooks the complexity of the work and the consequences of inadequate resourcing.

Here’s what an effective compliance program typically supports:

Policy development and maintenance
Ongoing training and education
Risk assessments and monitoring
Internal investigations and external reporting
Audits and coordination with regulatory bodies

Each of these pillars requires time, expertise, and a financial commitment. When compliance is underfunded, organizations risk falling behind on obligations—leading to audits, fines, or even jail time.

Why Compliance Work Is Complex and Unpredictable

Compliance isn’t a standardized process that follows the same workflow every day. It’s dynamic, thought-driven work that requires investigation, cross-functional coordination, and adaptability. Unlike assembly-line tasks, compliance issues can’t be forecasted with precision.

Whether responding to a whistleblower complaint or revising policies to meet new regulations, compliance teams often face sudden, high-stakes situations. That’s why budgeting must be flexible and account for the unexpected.

Common unplanned compliance expenses include:

Regulatory investigations and legal counsel
Emergency audits or reviews
Technology upgrades to meet new standards
Engaging external experts (e.g., forensic analysts or data privacy consultants)

Failing to plan for these contingencies leaves organizations exposed at critical moments.

Strategic Compliance Budgeting: Where to Begin

Building a compliance budget should be a strategic, data-informed process—not a rushed, end-of-year task. It should begin with a thorough assessment of your regulatory obligations, risk profile, and past expenditures.

A step-by-step guide to compliance budgeting:

Identify all compliance obligations – regulatory, contractual, and operational.
Conduct a risk assessment – focus your budget on high-risk areas.
Develop a compliance work plan – map activities to risks and obligations.
Estimate internal and external resource needs – include staffing, tools, and consultants.
Account for professional development – invest in training and certifications.
Build in contingency funding – plan for surprises, like audits or regulatory shifts.
Document and justify – clearly explain each line item and its associated risk.

Leadership is more likely to approve budgets when the risks of underfunding are clearly articulated and backed by data.

The 2025 Medicare Final Rule Raises the Bar

The 2025 Medicare Final Rule has introduced new compliance expectations that significantly impact healthcare organizations. With more stringent reporting, expanded audit criteria, and greater emphasis on data transparency, healthcare compliance programs must be more proactive than ever.

To remain compliant, organizations should:

Update risk assessments to align with the Final Rule’s new focus areas.
Ensure training materials are revised to reflect current Medicare standards.
Allocate funds for external audits or consultants who specialize in CMS regulations.
Strengthen documentation processes to meet expanded reporting requirements.

If you're in the healthcare space, your compliance budget must now reflect these expanded obligations. Ignoring these changes not only increases legal risk—it could jeopardize reimbursement or accreditation.

Budgeting for Compliance Is Budgeting for Organizational Health

An under-resourced compliance program puts the entire organization at risk. From data privacy to anti-fraud enforcement, compliance touches every department and stakeholder. When funded properly, it not only mitigates risk but also reinforces the organization’s values and long-term sustainability.

To build a resilient compliance function, remember:

Budgeting is a risk mitigation strategy.
Compliance work is ongoing and evolves constantly.
Investment in people, tools, and training pays off in long-term savings.
Leadership support starts with education and clear communication of risks.

Compliance is no longer just about avoiding fines—it’s about building trust, ensuring accountability, and sustaining operational integrity.

Final Thought

Budgeting for compliance isn’t just an administrative task—it’s a strategic commitment to protecting your organization's future. By aligning compliance resources with your risk profile and industry requirements, you set the foundation for a program that not only survives but thrives in today’s regulatory landscape.