Changing of the Guard: Preparing for Prior Approval for a new CEO or Program Director

Bringing on a new Chief Executive Officer (CEO) or Program Director (PD) is an exciting time for a health center. There is fresh energy and new opportunities. There are also learning curves for the CEO, Board and staff as everyone adjusts to a new leadership and a new vision for the organization.

HRSA views the CEO or Program Director as the primary authorizing contact for the organization. So, while the Board of Directors has the authority to select the CEO or Program Director, HRSA also reserves the right to require the organization to receive a Prior Approval for the new CEO or Program Director. Ideally, the Prior Approval would be submitted before the CEO starts, but because there is proof needed of direct employment, the submission is usually after the first pay period has been completed.

This applies to any change of a CEO – including the selection of an Interim CEO while a search process is conducted. To make this a smooth process, here are the steps to follow:

• After the offer is accepted, make a formal motion and vote of the Board to approve the new CEO/PD prior to the start date.

• Clarify the effective date of the change of CEO/PD as this may be after the start date if the previous CEO/PD assists with the transition.

• Write a short (1 paragraph) description justifying the change.

• Collect the following documents/information:

  • Board Minutes of the approval

  • The CV or resume of the new CEO/PD

  • A short biographical sketch of the new CEO/PD

  • The job description for the CEO/PD

  • The percentage of time the CEO/PD will devote to the project, and a justification if it is less than the previous CEO/PD

  • Budget updates if there are any from the change of CEO/PD

  • Documentation of direct employment (e.g. W-2 or Pay Stub)

  • The updated organizational chart showing that the CEO/PD reports to the Board and that the CEO/PD oversee other key management staff.

• Submit this through the Electronic Handbook using a Prior Approval.

• Work with HRSA on any clarifications or updates.

• Report back to the Board that HRSA has approved the new CEO/PD (and ensure this is reflected in the Board Meeting Minutes).

Ensuring you take these steps will keep you compliant with HRSA Compliance Manual Chapter 11 – Key Management Staff and will build rapport with your HRSA representatives as you get the appropriate approvals for such key changes within your organization.