Federal chief financial officers were responsible for $1.2 trillion in federal spending in 1990. Now it's $3.8 trillion. CFOs today not only face a larger budget, but one that is more complex.
Does that mean the law that created the position of federal chief financial officers 23 years ago, needs to be updated? Has the CFO Act fallen behind the times? And, have agencies met the spirit and intent of the law?
The answers almost across the board from experts in and out of government are: No. No. And, yes.
As part of Federal News Radio's week-long on-air and online special report, " Rise of the Money People: Financial management moves front and center as agencies make the final assault on wasted billions," we explore just how well the CFO Act has survived over the last two-plus decades, and how federal CFOs have morphed from number crunchers to master analyzers of data to help agencies make better decisions.
"I think there is an opportunity to evolve our financial management model and compliance framework in a way that we are moving beyond the basics of financial statements, and moving directly into a space where the CFO sees across government significant discipline and consistency in how we are tackling some of the other elements of the bottom line of government," said Danny Werfel, the controller in the Office of Management and Budget, a position akin to that of the federal CFO.
"We have to be branching out in to more areas of discipline that get at that citizens' bottom line and get more in the areas of financial performance. What happens is CFOs are branching out today in many, many different ways. The issue is whether the framework which they operate under, how they are audited, how they are capturing that information and reporting it publicly, is that following suit and being aligned with CFOs emerging responsibilities around these bottom line issues of citizens' trust in government, program and financial performance, fraud, error and waste."
The framework Werfel is referring to is the CFO Act.
Congress passed it and President George H.W. Bush signed it into law in 1990. It created the position of CFO in the major agencies and instituted the requirement for strong internal controls.
Twenty-three years later, experts in and out of government say agencies have met both the spirit and intent of the law. And now, CFOs are evolving beyond the initial requirements of the law.
Part of the expanded role CFOs play is derived from several of the administration's priorities, such as reducing improper payments and better managing real property.
But the factor that will influence most how CFOs affect federal agency performance is enabled by the growing use of financial data to make better decisions.
"We now have managers of financial information versus processors of financial information in our CFO community," said Doug Davidson, vice president of TFC Consulting and publisher of the financial management blog, FedCFO.com. "And agencies are able to act upon the information they have in front of them versus looking back strictly for auditability."
Davidson said the evolution has been slow, mostly taking place in the last five- to-seven years. But now, financial managers have a much better grasp on where their agency is spending money, and the impact that spending is having on performance and services.
Werfel said the ability of CFOs to impact agency decision making is more important than ever in today's budget climate.
-Jason Miller, FederalNewsRadio.com