AGA TOPICS Newsletter

Talk on Improving Federal Financial Management Produces Flurry of Ideas

Five experts in federal government finance gathered Tuesday to discuss priorities for the next presidential administration, sparking a lively debate that covered reviewing the CFO Act, avoiding “one-size-fits-all” solutions and improving the ability to track how taxpayer dollars are spent.

Moderator Samuel T. Mok, CGFM, CIA, the former CFO of the U.S. Department of Labor and AGA President-Elect, reminded the panelists and the audience that the first 180 days of a new administration are typically characterized by “chaos, confusion, missteps and disconnects.”

Potential CFOs are jockeying for position, Mok said. Some are competent and committed; some approach the position with a “you-owe-me” attitude. Once nominated, the Senate confirmation process takes months. As the new administration drowns in resumes, the political backdrop will be dominated by the war in Iraq, the subprime mortgage meltdown and skyrocketing fuel prices, among other crises.

Federal financial management reform, therefore, “may not be the first order of the day,” Mok said, but the panel can discuss how to help the new administration quickly identify priorities and remain focused on them.

AGA coordinated the forum in partnership with the National Academy of Public Administration (NAPA) and the Government Performance Coalition. Held at the NAPA offices in Washington, D.C., the forum featured the insights of Steven O. App, CGFM, Chief Financial Officer, Federal Deposit Insurance Corporation (FDIC); Michael J. Hettinger, Director of Practice Planning and Marketing, Grant Thornton LLP; Wendy Payne, CGFM, Executive Director, Federal Accounting Standards Advisory Board (FASAB); Daniel I. Werfel, Deputy Controller of the Office of Federal Financial Management, Office of Management and Budget (OMB); and AGA Executive Director Relmond P. Van Daniker.

A group of about 40 invited guests joined the discussion. Highlights:

The 1990 CFO Act—Mok said that in his opinion the act has not been equally or fully implemented, making CFOs in some cases “glorified compliance officers.” Many panelists agreed that it is time to take a serious look at the CFO Act and see if it should be amended. Discussion included a five-year term for CFOs and a provision for “portability” so that CFOs, once confirmed by the Senate, can transfer to another agency without repeating the process.

Accountability —Van Daniker said that since elected leaders have asked the public for their vote, there is a responsibility to provide information to those citizens in a form that they can understand. To that end, he suggested all federal agencies be mandated to issue a four-page public disclosure document that provides that information, lists the challenges agencies face and what they’re doing about it.

Public Expectations—OMB’s Werfel said federal financial management is entering a new era of strengthened demands that government do a better job of showing precisely where taxpayer money is going. As an example, he pointed to the media attention given to a recent Government Accountability Office report on improper credit card use among some federal employees. “Our overarching objective is building trust in government,” he said. Mention of the report prompted some frustration that agencies without improper credit card problems are being forced to comply with time-consuming new rules with extremely limited resources.

Chief Management Officer (CMO) —Over the years, government leaders have proposed a top official to oversee all management issues, but many panel members expressed concern. Apps said a CMO, if not backed up with the proper resources, could be a distraction, creating confusion rather than addressing the real problem. Hettinger agreed. “I think we’ve got enough chiefs,” he said, nothing that at the Department of Homeland Security, the CFO is not supervised by the Undersecretary for Management to ensure that the CFO reports directly to the Secretary.

All the panelists agreed that financial management has come a long way since the CFO Act of 1990. Payne, of FASAB, said level of professionalism has increased tremendously. Requiring audited financial statements has led to major improvements in financial management processes. Werfel also noted that the President’s Management Agenda has created a framework that clearly defines success. “That has changed the way the federal government does business, and the way OMB does business.”

AGA will produce a detailed report from the discussion for distribution. Stay tuned for more information.
 

By: Christina Camara