How CXOs can close the value-proposition gap

Federal financial managers received some shrewd advice last week. Stop talking like financial managers.

Stop talking about clean opinions. Don’t talk about material weaknesses. You don’t need to mention the CFO Act or the Digital Accountability and Transparency (DATA) Act.

With new leaders coming in across every agency, federal financial managers, instead, should focus on value and mission support.

Adam Goldberg, the executive architect at the Treasury Department’s Financial Innovation and Transformation (FIT), said by focusing on how the CFO’s office furthers the agency’s mission, agency budget and financial management executives can change the conversation about back-office functions.

Richard Haley, the FBI CFO, said his folks have to communicate in the language that agents and leaders use every day. He said they shouldn’t have to work hard to understand financial management initiatives.

Goldberg said it’s about shifting the conversation to talk about what the agency needs to better support agency operations.

The point of the Federal IT Acquisition Reform Act (FITARA), for example, aims to close the gap between IT, acquisition and mission areas. It forces the chief information officer into discussions about planning and procuring mission critical technology.

In the human resources world, we’ve heard about chief human capital officers begging and pleading mission area hiring managers to make decisions, review applications and are involved in every step of the process. The Office of Personnel Management issued guidance in November stressing the need to engage and empower hiring managers.

The idea behind all of these efforts is to break down the siloes that have built up over time for probably no real reason, creates layers of inefficiency and leads to the perception of a stilted bureaucracy and inefficiency.

Treasury is trying to help agencies remove these barriers for the financial management folks. The department is developing a maturity model to help agencies think about how their CFO offices are impacting mission beyond just “being the money people.”

-Jason Miller, FederalNewsRadio.com
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An investigation’s cost

Today’s FBI is a threat-based, intelligence-driven, technologically supported agency of more than 30,000 employees working in 56 field offices in the U.S. and 61 Legal Attaché offices overseas. These employees combat threats as diverse as terrorism, corporate fraud, cybercrime, human trafficking, violent crime and money laundering.

Making optimum use of the FBI’s large and geographically dispersed work force, as well as its $7 billion budget, takes on enhanced importance — and difficulty — when viewed against the backdrop of the terrorist attacks of Sept. 11, and the resulting transformation of the FBI to an agency that fuses intelligence into its national security and law enforcement functions.

The FBI’s chief financial officer, through the Finance Division, is a key partner in achieving the FBI’s mission. While the Finance Division’s contributions can take many forms, two of the most important are providing accurate and useful financial information for decision-making and being a change agent for improved operations and efficient use of resources.

The CFO’s office has been a driving force to bring about, through the budget process, more integrated thinking and comprehensive analysis of FBI programs. As part of this effort, the FBI has adopted a multiyear budgeting cycle, enabling better business planning and the analysis of the out-year impact of current budget decisions, particularly the impact on information technology, space and other infrastructure requirements. This approach also makes the FBI planning cycle consistent with that of the U.S. intelligence community, improving its ability to coordinate with the Director of National Intelligence and the other intelligence agencies.

To be fully successful, both the planning process and daily operations need timely, accurate and useful information. While not the complete answer, information derived from audited financial statements is certainly part of this equation. In recent years, the FBI has made steady progress in improving the quality of its financial statements; its fiscal 2007 statement received an “unqualified” opinion with no financial material weaknesses or significant deficiencies. This accomplishment is significant because it was achieved using an antiquated financial system scheduled for replacement.

Beyond financial statement data, the CFO’s office strives to provide information needed to plan and execute FBI responsibilities in the most effective and efficient manner. An example of such information is a current effort to determine the cost of an investigation. Costs will be calculated based on the type of investigation, size of field office and other variables. By analyzing and comparing this data, program managers at FBI headquarters and special agents in charge of field offices will be able to identify best practices, problem areas, and other insights of how to best utilize bureau resources. The CFO’s goal is to be both proactive in identifying areas where better financial data would improve decision-making, as well as to serve as a ready resource to program managers needing assistance in developing and analyzing financial data.

In addition to budget and accounting, the Finance Division is also responsible for the FBI’s acquisition function. The FBI procures nearly $3 billion of goods and services annually, much of which is for information technology and other sophisticated equipment. The structure allows for better coordination among budget, procurement and accounting personnel, thus enabling the FBI to integrate budget formulation, multiyear acquisition requirements, and accountability of its resources.

With the expansion of its size and responsibilities, the FBI is, in many ways, like a large corporation with multiple business lines. Taking a page from the private sector, the Finance Division is hiring personnel with business backgrounds to focus on business process re-engineering to realize cost savings and improved operations. Through this and its other efforts, the CFO’s office can — and must — be a key contributor to the FBI’s mission as it embarks on its next 100 years.

-Rich Haley on FederalTimes.com
Rich Haley is the FBI Finance Division assistant director and chief financial officer.
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Today's GAO Publication

The Government Accountability Office (GAO) today released the following correspondence:

Financial Management: FBI Has Designed and Implemented Stronger Internal Controls over Sentinel Contractor Invoice Review and Equipment Purchases, but Additional Actions Are Needed.
GAO-08-716R, July 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-716R

FBI Wiretaps Dropped Due to Unpaid Bills

WASHINGTON (AP) - Telephone companies cut off FBI wiretaps used to eavesdrop on suspected criminals because of the bureau's repeated failures to pay phone bills on time, according to a Justice Department audit released Thursday.

The faulty bookkeeping is part of what the audit, by the Justice Department's inspector general, described as the FBI's lax oversight of money used in undercover investigations. Poor supervision of the program also allowed one agent to steal $25,000, the audit said.

More than half of 990 bills to pay for telecommunication surveillance in five unidentified FBI field offices were not paid on time, the report shows. In one office alone, unpaid costs for wiretaps from one phone company totaled $66,000.

-Laura Lakes Jordon, Associated Press (FederalNewsRadio.com)

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FederalNewsRadio - Ask the CFO - Kevin Perkins (FBI)

Mr. Perkins was born in 1960 and was raised in the Pittsburgh, Pennsylvania area. He earned a Bachelor of Business Administration degree in 1982 from Baylor University, Waco, Texas. Following graduation he pursued a career in public accounting with an international accounting firm. He is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.

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