Chief Financial Officer

Department/Agency: Cross-Cutting Management Positions

Position:

Chief Financial Officer

Twenty-Four positions by Statute:
      -- 16 Political Appointments*
      -- 8 Career Status Appointments*

Executive Schedule: Other Pay Plan

Major Responsibilities:

• Manages agency financial management staff, activities and operations
• Develops and maintains  integrated accounting and financial management systems
• Reports on financial management matters to agency heads
• Develops budgets that support agency missions
• Monitor the execution of the agency budget and expenditures
• Integrates agency budgets and financial information with program objectives
• Prepare accountability reports for the inspector general and congressional overseers

Key Competencies and Preferred Qualifications:

• Executive experience in a large, diverse private or public sector organization
• Financial management experience
• Accounting skills a plus
• Risk-management skills
• Understanding large financial transaction systems and data warehousing reporting
• Disaster recovery capability and knowledge of IT security and privacy requirements
• Knowledge of the federal budget, appropriations, and legislative processes
• Experience in or with government at senior level

Insight:

Background 
Under the CFO Act of 1990, the office of the federal Chief Financial Officers (CFOs) was established, in part because Congress believed federal financial management needed the teeth that a century of earlier reform legislation had failed to provide. With this Act, the focus of federal financial management was broadened beyond budget formulation, planning and execution to a more disciplined approach to financial performance and accountability.  Financial statements and audits modeled on the private sector became required, resulting in new systems and processes to meet new and tougher financial audit requirements and internal control systems.  With these changes, the CFO and financial management moved out of the “back office” to the “front office” of policy and planning table. 

Most but not all CFOs preside over the preparation of their agency's budget. The job of CFO is very different for those who don't have this function in their portfolio. The budget tends to eat up a huge amount of time, which requires the CFO and the deputy to decide how to allocate responsibilities for budget, accounting, reporting, internal controls, etc.  For more insight into the evolving role of the CFO and the key laws affecting the CFO operation, please see the new federal CFO Roadmap. 

Current and former CFOs interviewed by the Council for Excellence in Government about their experiences highlighted the many challenges facing new CFOs and provide advice for a successful tenure. While some suggestions seem obvious- they track good management principles- others are tailored toward the challenges of specific jobs. A summary of their advice:

Manage the squeeze in discretionary dollars and maintain personnel expertise. 
It’s no secret that the current budget environment already puts tremendous pressure on discretionary spending, which funds most support operations including financial operations. Managing in this constrained environment will be the CFOs' greatest overall challenge.  They will have to do this job with fewer and less experienced staff to carry out critical support functions. Making this even more challenging, as a CFO from the first Bush administration noted, is that “the political leadership in both the legislative and executive branches is more interested in policy than financial management.”  Aside from the difficulty of getting senior leadership to care about performance management or cost-benefit analysis, this pre-disposition to focus on policy and securing funding for policy-related initiatives makes it even more difficult to garner sufficient resources for CFO operations, particularly for major investments.    

Limit initiatives, keep focus, delegate to staff, and work across the agency.
A former Treasury CFO passed on this advice he received when appointed to the job:  “Pick no more than three big things you want to accomplish and stay focused on them.  You will be handed a million daily distractions and if you try to personally manage all of them, you will not accomplish anything of significance. If you stay focused…you might actually get [the big things] done.”  He added, “If you completely embrace the myriad issues that will drift up to your position, you will drown.”  To avoid “drowning”, past CFOs emphasized the need to delegate responsibilities and then hold people accountable. Embedded in this notion is the need to trust staff, something most CFOs advised can be done without hesitation.  “Be good to the staff”, one noted. "They can get you where you want to go”. Several CFOs warned newcomers not quickly reshape or reshuffle their staff, due both to the difficulty of recruiting for these jobs and the slow, bureaucratic hiring process.   “Work with what you have” was the consensus. 

Almost all CFOs surveyed emphasized the need to work across the “functional stovepipes” that often exist in agencies and to collaborate “up, down, and sideways”.  The budget constraints noted above also dictate the need to look across functions to find ways to deliver better service with limited resources.  Most argued this can be done best if the CFO is a trusted part of the agency policy-making team.  More than one said that it was particularly important to work effectively with other chief executive officers (CXO) in the agency, especially the Chief Information Officer (CIO) given the constantly changing technology and security concerns.

In addition to the Inspector General (IG), get to know the key oversight people outside your agency.   
This means the staff at the Office of Management and Budget (OMB), the General Accountability Office (GAO) and on the relevant congressional budget and authorizing committees.  Within the agency, establishing a good relationship with the IG was mentioned by more than half the CFOs who commented for this profile.  Some IGs will feel the need to operate in the “gotcha” mode, one observed, adding “This is different than in the private sector where the auditor is viewed as part of the management team and can be called upon by the CFO to help improve effectiveness and efficiency.”  A solid relationship with the IG can help avoid the “gotcha” event which almost always is embarrassing to the CFO and the agency.

A current CFO who came to government from the private sector noted the biggest surprise for him was “the role that OMB plays.  Virtually everything we do is reviewed and/or analyzed by them.”  Three particular positions in OMB influence the CFO’s job.  They are the Deputy Director for Management (DDM), who has the lead for management initiatives in the government, and the Controller (and head of the Office of Federal Financial Management (OFFM)) and reports to DDM, and a staff person in the OMB budget division assigned to that agency. The deputy director and the controller are responsible for government-wide financial management policy and oversee agencies' financial management improvement efforts. Although the staff person in the budget division is primarily concerned with budget issues, he or she also partners with OFFM in the oversight of agency financial management efforts. Another current CFO counseled that because of OMB’s role, “Externally, the CFO must have an open relationship with senior career and policy officials at OMB” as well as with staff on the appropriations and authorizing committees and at the Government Accountability Office. Some CFOs thought that nurturing contacts with the Hill and the GAO at times is even more important than with OMB.

Additional views of the job and advice.  The CFOs had ample suggestions for the next people to occupy their chairs. Several echoed these points: 

• On the first month.  “Quickly… [learn] the relationships necessary within an agency to make change.  Meet with the agency head, key deputy and assistant secretaries, chiefs (acquisition, human resources, information technology) and key career executives and managers…Ensure that [staff] have a good solid working relationship with the OMB. Meet with your congressional appropriations [and authorizing] staff. [That] should be about you listening to their issues in order to assess the challenges you face.”

• On staff.  “Trust your staff.  Federal executives and managers can be trusted and you should rely on them for their experience and knowledge.” And “Trust the career civil servants.  The majority of civil servants…are truly focused on serving the public interest…Let them continue to do their jobs, seek their advice and counsel.”

• On integrity. “Everyone who comes into any of these jobs should know that they should immediately raise to the IG anything they feel is not right.”

• On the CFO Council.  “CFOs [should] realize that a lot of the agenda for financial management…is driven by the collective thought and strategic leadership of the CFO Council…new requirements being issued by [OMB] that affect CFOs’ daily lives (e.g., A-123) are developed by the committees within the Council.  [CFOs] should get involved if they want to have a voice in these proceedings.”

• On stonewalling. “Staff will often tell you that your or another’s idea for change is not possible due to law or regulation; question this assertion and ask to see the specific prohibiting perspectives for often they are non-existent.” And “Don’t accept ‘it can’t be done’.  In many cases you will find no legal support for the argument and when there is some prohibition, there are good people out there who know how to get things done within the limits of law and regulations.”

• On patience.  “Dealing with bureaucracy, the multitude of rules and requirements, how slowly things seem to move, the inflexibility of the budget, etc. will require great patience.” But, “Be patient.  Change is possible but it takes time.  These are big, complex organizations and they can’t turn on a dime.”

• On taking heat.  “Expect to take heat, perhaps even be the fall guy/girl when something goes south, even if you had nothing to do with it.  Our job is to keep the senior agency officials informed, no surprises, and shield them when possible.”

• On the job.  “The most unexpected element was how incredibly rewarding it was.  Impacting the mission of almost any Federal organization affects the lives of your fellow citizens and having a positive impact does something good for potentially millions of people.”  And finally, “Make sure you have some fun.”

Key Relationships – Within the Department or Agency:

Secretary and Deputy Secretary
Other agency “Chiefs” (e.g., CIO, CAO, COO, CHCO)
Inspector General and General Counsel
Program offices (e.g., assistant secretaries or equivalent) and career staff in the CFO office as well financial management staff in the program offices.

Key Relationships – Within the Government:

Office of Management and Budget (e.g., the Office of Federal Financial Management)
Controller, Office of Federal Financial Management
OMB budget division staffer assigned to agency
The Government Accountability Office
Chief Financial Officers Council
Administrators of Financial Management Services at Treasury and Financial Systems Integration Office at General Services Administration

Key Relationships – Outside the Government:

Staff of the authorizing and appropriations committees as well as the government oversight and reform committees
Association of Government Accountants
Federal Accounting Standards Advisory Board
Independent public accounting firm assigned to the agency

Nomination Referred to:

Senate confirmation not required; appointed by agency head