# Presentation: 207879

## 
Danny Werfel
Office of Management and Budget
April 2, 2008

- Danny Werfel
- Office of Management and Budget
- April 2, 2008

**The CFO Act – Where Do We Go From Here?**

## 
  “The Chief Financial Officer (CFO) of a company or public agency is the corporate officer primarily responsible for managing the financial risks of the business or agency. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management.” 

				- Wikipedia entry for “CFO”

-   “The **Chief Financial Officer** (**CFO**) of a company** or public agency is the corporate officer primarily responsible for managing the financial risks of the business or agency. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management.” **
**	****	****	****	****- Wikipedia entry for “CFO”**

## CFO Act Objectives

***Public Reporting*** – Provide transparency into government finances, including the fiscal sustainability of government operations over time and the effectiveness of government programs.
***Internal Controls*** – Facilitate process, technology, and human capital improvements that ensure strong internal controls and sound accounting practices.
***Decision Support*** – Provide Federal leaders financial information to help improve management decisions and drive better stewardship outcomes (reduced fraud, error, waste).

## Improving Financial Performance

- No more than one repeat weakness under FMFIA Sec. 2 or Sec. 4

- Meets reporting deadlines

- No more than one repeat auditor weakness

- Clean audit opinion

- No material non-compliances

- No chronic or significant ADA violations

- Expands routine data use

- Uses financial information to drive results in key areas

- No repeat weaknesses under FMFIA Sec. 2 or Sec. 4

- FFMIA compliant

- No repeat auditor weaknesses

**Improving Financial Performance**

## Roles of Federal CFO

**Roles of Federal CFO**

**Financial Report Preparer**

**Compliance Officer**

**Transaction Processor**

**Provider of Key Management Data**

**Risk Manager**

**Strategic Planner**

## PMA Results

**PMA Results**

**19 of 24 agencies w/ clean opinions**

**Four consecutive years of declines in material weaknesses**

**$7+ Billion in Real Property Disposals**

**$7+ Billion in Improper Payment Eliminations**

**?**

**All **
**agencies meeting 45 day reporting deadline**

## Challenges of Meeting CFO Role in Federal Environment

-  Overwhelmed by compliance
-  Responsibilities without authority
-  Complex (and sometimes decentralized) financial operations
-  Human capital needs
-  Resources to maintain steady state  operations and initiate improvements  (e.g., program integrity)

## The Path Forward

**At the Agencies...**
-  Integrated approach to financial management
-  Changing the “Footprint” of financial operations
-  Zeroing in on the connection between CFO activities and agency mission objectives
**At OMB, FASAB, Congress, and GAO...**
-  Reconsideration of what’s required for compliance

## Integrated Approach to Financial Management

- CFOs in Integrated Organizations:
- Are more informed on organizational risk, business goals, and data needs
- Can standardize and/or centralization business processes more seamlessly
- Can more readily leverage other parts of the organization to help reduce workload in non-core responsibilities

##  Changing the “Footprint” of Financial Operations

- Federal CFOs need additional capacity to move beyond compliance
- Federal CFOs should evaluate financial operations for opportunities to:
- Centralize and standardize activities
- Leverage shared service providers

## Zeroing in on the Connection to Mission Objectives

- Federal CFOs should be working to identify –
- activities or work products that add value to the organization’s mission effectiveness
- obstacles that exist in realigning or expanding  current activities to ensure greater impact on organizational effectiveness

## Reconsideration of What’s Required

- Public Reporting – how can financial reports be more useful to the public, Congress, and other government leaders?
- Internal Controls – how can requirements better align controls with risk?
- Decision Support –
- should financial reports serve dual purpose of stewardship and information for decision-making?
- can we facilitate cost accounting and other business intelligence tools to help agencies manage risks and achieve business goals?