Requirements for Financial Managers

The CFO Act of 1990 was enacted to address longstanding problems in financial management in the federal government. The act established CFO positions throughout the federal government and mandated that, within each of the largest federal departments and agencies, the CFO oversee all financial management activities relating to the programs and operations of the agency. Among the key responsibilities of CFOs are overseeing the recruitment, selection, and training of personnel to carry out agency financial management functions.
Recognizing that a qualified workforce was fundamental to achieving the objectives of the CFO Act and other related management reform legislation aimed at improving federal financial management, the Human Resources Committee of the Chief Financial Officers Council and the Joint Financial Management Improvement Program (JFMIP) have proposed improvements addressing the recruitment, training, retention, and performance of federal financial management personnel. In November 1995, JFMIP published the Framework for Core Competencies for Financial Management Personnel in the Federal Government, designed to highlight the knowledge, skills, and abilities that accountants, budget analysts, and other financial managers in the federal government should possess or develop to perform their functions effectively in accordance with the CFO Act. JFMIP stressed the need for federal government financial managers to be well-equipped to contribute to financial management activities, such as the execution of budgets under increasingly constrained resource caps and the preparation, analysis, and interpretation of consolidated financial statements.
A primary goal in this body of work is to obtain and share with DOD information on the formal education, professional work experience, training, and professional certifications of key financial managers in the department, including the Office of the Under Secretary of Defense (Comptroller), each of the military services, and the Defense Finance and Accounting Service.

	Objective, Scope, and Methodology

The objective of this assignment is to provide information on the formal education, professional work experience, training, and professional certifications of personnel serving in key financial management positions in the Navy and Marine Corps. We obtained this information from biographies and profile instruments due to the concerns of Navy officials regarding the completeness of personnel databases and personnel files. We worked with Navy officials to determine the key financial management positions to be included in this review. These positions typically included comptrollers, deputy comptrollers, and budget officers at Navy and Marine Corps major commands and installations. As agreed with the Navy, we did not verify the information contained in the profiles provided by the respondents. A more detailed discussion of our scope and methodology, including a description of how we obtained qualifications and work experience data, is in appendix I.
We performed our audit work from March 1997 through January 1998 in accordance with generally accepted government auditing standards. The Assistant Secretary of the Navy (Financial Management and Comptroller) provided comments on a draft of this report. These comments are discussed in the “Agency Comments and Our Evaluation” section of this report and are reprinted in appendix VIII.

	Profile of Navy Financial Management Executives

Table 1 provides information on the formal education, careers, and professional certifications of the Department of the Navy’s four executives included in our review. All four held bachelor’s degrees and three also held master’s degrees. Majors associated with their bachelor’s degrees included mathematics, education, accounting, and engineering, while those associated with their master’s degrees included public financial management, business administration, operations research, and Middle East Affairs and Arabic. The Assistant Secretary had spent 27 years at DOD and 5 years in the private sector. The other three executives’ DOD careers ranged from 23 to 32 years. In addition to her years at DOD, the Principal Deputy Assistant Secretary had spent 2 years at the Social Security Administration. The Director of the Office of Financial Operations had spent 2 years in the private sector and as an adjunct professor; he had also served as a part-time instructor of graduate and undergraduate level accounting and financial management courses over a 10-year period. A review of biographical information provided to us showed that three of the executives had served in financial management-related positions during most of their DOD careers. One of the executives also held a professional certification. The Director, Office of Financial Operations was a Certified Public Accountant.

	Profile of Navy and Marine Corps Key Financial Managers

In collaboration with Navy officials, we identified 306 key financial managers across the department for this review, of which 194 (or 63 percent) responded by providing information on their qualifications and experience. Respondents included the 7 managers from the Office of the Assistant Secretary of the Navy (Financial Management and Comptroller)—ASN/FM&C;
74 of 128 managers from four Navy operational commands and their
12 of 17 managers from the Chief of Naval Education and Training (CNET) and its installations;
68 of 110 managers from the Naval Sea Systems Command, Naval Air Systems Command, Naval Supply Systems Command, and Naval Facilities Engineering Command and (1) shipyards, weapon stations, aviation depots, fleet industrial supply centers, and public work centers which perform supply and maintenance support to other Navy and Marine Corps organizations on a reimbursable basis and (2) air and surface warfare centers responsible for the research, development, test, and evaluation (RDT&E) and procurement of Navy aeronautical, electronics, ship, and submarine systems; and
33 of 44 managers from Headquarters, U.S. Marine Corps and its commands and installations.
The seven ASN/FM&C respondents performed roles including financial operations, financial management/accounting policy, and/or budget execution. The 187 respondents from Navy and Marine Corps major commands and installations included 71 comptrollers, 47 deputy comptrollers, 67 budget officers, and 2 working capital fund managers.
About 23 percent of the 194 respondents were military officers. The 44 officers served mainly as comptrollers at major commands and installations, and the 150 civilians served most often as comptrollers and budget officers at installations. Table 2 provides a breakout of the officers and civilians by rank and grade, respectively.

		Formal Education Attained

Over 85 percent (the 44 officers and 122 of 150 civilians) of the 194 respondents reported holding bachelor’s degrees, and 41 percent (39 officers and 41 civilians) also reported holding master’s degrees.
Five of the 166 respondents holding bachelor’s degrees reported more than one major. A review of the profiles showed that 47 managers, or about 28 percent of these respondents, reported accounting majors, 73 managers reported other business-related majors, and 48 managers reported that one or more of their majors were not business related. Table 3 shows the bachelor’s degree majors reported by the 166 Navy and Marine Corps financial managers.
Eight of the 80 respondents holding master’s degrees reported more than one major. A review of the profiles showed that, of these 80 managers, 6 reported accounting majors, 62 reported one or more other business-related majors, and 15 reported one or more nonbusiness-related majors. Table 4 shows the master’s degree majors reported by the 80 respondents.
The key financial managers were also requested to provide information on the number of accounting-related subjects completed as part of their formal education. Of the 194 respondents, 176 had completed one or more of these subjects, as follows:
1-2 subjects: 20 (5 officers and 15 civilians),
3-5 subjects: 44 (9 officers and 35 civilians), and
6 or more subjects: 112 (28 officers and 84 civilians).
Included in this latter group were 109 (or about 56 percent of the 194 respondents) who reported completing both principles of accounting and intermediate accounting, along with at least four other subjects. Based solely on a review of their formal education, these 109 managers appear to have met the requirements to serve in federal GS-510 accountantpositions.

		Professional Work Experience Acquired

A review of the profiles showed that the 44 officers’ careers ranged from 4 to 33 years, averaging 21 years, while the 150 civilians’ careers ranged from 8 to 55 years, averaging 27 years. Both officer and civilian respondents, with a few exceptions, had spent most of their careers in DOD. Also, about 62 percent of all respondents reported that they had performed several of the financial management-related functions included in our review during their careers.
Figures 1 and 2 show the average number of years of work experience by rank for the officers and by grade for the civilians, respectively.
In collaboration with Navy officials, we identified five functions which are often performed by personnel serving in key financial management positions, including: financial statement preparation—preparing annual financial statements and footnotes; financial reporting/accounting policy—preparing financial reports and consulting on the application of accounting policy; financial analysis—performing tasks associated with cost accounting, business process improvements, budgeting, cash flow analysis, cost analysis, revenue and expenditure forecasting, and other analysis of financial position and operations; accounting operations—recording and reporting accounting transactions; and accounting systems development and maintenance—performing tasks associated with the functional design and maintenance of accounting and finance systems.
Thirty officers and 90 civilians (or about 62 percent of the 194 respondents) reported that they had performed three or more of these functions during their careers. Figures 3 and 4 show the number of officers and civilians who had performed each function at sometime during their careers, and the average number of years of experience in each function. For example, figure 3 shows that 38 of the 44 officers had performed financial analysis-related tasks for an average of 7 years.

		Training Completed During 1995 and 1996

During 1995 and 1996, about 64 percent of the officers and 88 percent of the civilians reported completing some training in one or more of the categories included in our review. Of these 160 managers (28 officers and 132 civilians) receiving training, (1) 94 percent listed general topics, such as computers, supervision, strategic planning, and communications skills, as examples of the training they had completed, (2) 61 percent reported completing some training in financial topics, and (3) about 44 percent reported completing training in accounting topics, such as accounting standards and financial reporting. Also, a review of the profiles showed that 46 managers completed only general training and 34 other managers had not completed any training. Therefore, 41 percent of the 194 respondents had not received any accounting or financial training for those 2 years.
Figure 5 shows the training reported as being completed by the 194 respondents during the 2-year period.
A review of the profiles showed total receiving accounting-related training: 70 (17 officers and 53 civilians), total receiving financial-related training: 98 (21 officers and 77 civilians), total receiving training in general topics: 151 (23 officers and 128 civilians), and total not receiving training: 34 (16 officers and 18 civilians).

		Professional Certifications Held

About 22 percent of the 194 respondents reported holding one or more professional certifications. A review of the profiles showed that, of these 42 managers,
13 were CPAs (1 officer and 12 civilians),
23 were CGFMs (3 officers and 20 civilians),
9 held other financial management certifications, including the Certified Management Accountant and Certified Fraud Examiner (3 officers and 6 civilians), and
6 reported holding nonfinancial management certifications (1 officer and 5 civilians).
Of the 152 managers that did not hold any professional certifications, 37 were officers and 115 were civilians. Figure 6 shows the types of professional certifications reported by the 194 Navy and Marine Corps financial managers.
Appendixes II through VII provide the formal education, professional work experience, training, and professional certification data reported by the 44 officers and 150 civilians by their respective organizations, including:
ASN/FM&C in appendix II; four Naval operational commands and 34 of their 50 installations in appendix III; the Chief of Naval Education and Training (CNET) and six of its seven installations in appendix IV;
Naval Sea Systems Command, Naval Air Systems Command, Naval Supply Systems Command, and Naval Facilities Engineering Command and 19 of their 28 working capital fund installations, including shipyards, weapon stations, aviation depots, fleet industrial supply centers, and public work centers in appendix V;
Naval Sea Systems Command and Naval Air Systems Command and 9 of their 13 air and surface warfare centers responsible for the research, development, test, and evaluation (RDT&E) and procurement of Navy aeronautical, electronics, ship, and submarine systems in appendix VI; and
Headquarters, U.S. Marine Corps and 12 of its 17 commands and installations in appendix VII.

	Agency Comments and Our Evaluation

In commenting on a draft of this report, the Navy indicated that the information will be useful in its continuing efforts to ensure that all of its financial managers are able to address the financial management needs of the department. The Navy provided two additional comments:
While acknowledging that accounting training and experience are becoming increasingly relevant to the financial management working environment, it stated that the report placed too much emphasis on the accounting discipline. It stated that professional certifications in and of themselves may not always be a useful indicator, adding that it has chosen to emphasize continuing education as more useful in maintaining a flexible and broad-based financial management workforce.
Our report presents information on a number of measures relating to qualifications and experience of key Navy financial managers. As agreed with Navy officials when we initiated this profiling work, information on formal education and training, including accounting training, and professional certification are among such important measures. The key Navy financial managers surveyed are responsible for accurately recording and including the results of transactions in financial and budgetary reports and statements for one of the largest entities in the federal government, with worldwide operations. It is important that this information be reliable, given its intended use for managerial and budgetary decisions.
We recently reported that the Navy, to an even greater extent than the other military services, has been plagued for years by troublesome financial accounting and reporting problems involving billions of dollars.Continuing errors, misstatements, and internal control weaknesses have precluded the Naval Audit Service from rendering anything other than a disclaimer of opinion on the Navy’s financial statements. In that context, and as the Navy response indicates, the profiling information, including formal education, professional work experience, training, and professional certifications, will help the department evaluate its military and civilian career programs to help ensure that Navy financial managers provide the best possible service to customers.
Regarding Navy’s comment that it has chosen to emphasize continuing education rather that professional certifications for its financial management workforce, our point is that certifications, with accompanying requirements for continuing professional education, can be used as one vehicle in ensuring that financial managers receive necessary training on an ongoing basis. The Navy’s comments are reprinted in appendix VIII.
We are sending copies of this report to the Chairmen and Ranking Minority Members of the Senate Committee on Governmental Affairs; the House Committee on Government Reform and Oversight; and the Subcommittee on Government Management, Information and Technology of the House Committee on Government Reform and Oversight; the Secretary of Defense; and the Director of the Office of Management and Budget. Copies will also be made available to others upon request.
If you have any questions about this report, please contact me at (202) 512-9095. Major contributors to this report are listed in appendix IX.

Scope and Methodology

In collaboration with Navy officials, we identified senior executives and financial managers from the Navy and Marine Corps to be included in this review as those serving in key positions throughout the department. The four senior executives in the Office of the Assistant Secretary of the Navy (Financial Management and Comptroller) (ASN/FM&C) included the Assistant Secretary of the Navy (Financial Management and Comptroller); the Principal Deputy Assistant Secretary of the Navy (Financial Management and Comptroller); the Director, Office of Financial Operations; and the Director, Office of Budget. The 306 key financial management positions selected for this review included:
7 from ASN/FM&C involved in financial operations, financial management/accounting policy, and/or budget execution-related functions and
299 (including comptrollers, deputy comptrollers, budget officers, and working capital fund managers) from 126 Navy and Marine Corps major commands and installations involved in (1) operations, (2) training, (3) supply and maintenance, and (4) research, development, test, evaluation, and procurement of Navy and Marine Corps systems, such as aeronautics, electronics, ships, and submarines.
In addition to the 4 senior executives, 194 financial managers located at 89 of the 126 organizations responded to this review. The 194 respondents included the 7 ASN/FM&C managers and 187 managers from major commands and installations made up of 71 comptrollers, 47 deputy comptrollers, 67 budget officers, and 2 working capital fund managers.
Table I.1 identifies the Navy and Marine Corps major commands, the number of their installations, and information on the key financial managers included in this review.
Commander in Chief, U.S. Atlantic Fleet and 15 of its 22 installations (27 of the 55 managers responding included 10 comptrollers, 7 deputy comptrollers, and 10 budget officers)
Commander in Chief, U.S. Pacific Fleet and 12 of its 21 installations (27 of the 50 managers responding included 11 comptrollers, 6 deputy comptrollers, and 10 budget officers)
Commander in Chief, U.S. Navy in Europe and its two installations (eight of the nine managers responding included two comptrollers, three deputy comptrollers, and three budget officers)
Commanding Officer, Military Sealift Command and its five installations (12 of the 14 managers responding included 6 comptrollers, 2 deputy comptrollers, and 4 budget officers)
Chief of Naval Education and Training Command and six of its seven installations (12 of the 17 managers responding included 6 comptrollers, 1 deputy comptroller, and 5 budget officers)
Navy Working Capital Fund Organizations Naval Sea Systems Command, Naval Air Systems Command, Naval Supply Systems Command, and Naval Facilities Engineering Command and 19 of their 28 installations, including shipyards, weapon stations, aviation depots, fleet industrial supply centers, and public work centers (49 of the 79 managers responding included 18 comptrollers, 14 deputy comptrollers, 15 budget officers, and 2 working capital fund managers)
Naval Sea Systems Command and Naval Air Systems Command and 9 of their 13 air and surface warfare centers (24 of the 37 managers responding included 9 comptrollers, 7 deputy comptrollers, and 8 budget officers)
Headquarters, U.S. Marine Corps and 12 of its 17 installations, such as operational, training, working capital, and systems (33 of the 44 managers responding included 11 comptrollers, 9 deputy comptrollers, and 13 budget officers)
We obtained fiscal year 1997 Navy and Marine Corps budget data, including operation and maintenance (O&M); research, development, test and evaluation (RDT&E); and procurement funding from the ASN/FM&C budget office. Those major commands and installations identified for this review managed $52 billion of approximately $80 billion budgeted for the Navy and Marine Corps during fiscal year 1997.
In an August 1988 report, GAO proposed a framework for evaluating the quality of the federal workforce over time. Quantifiable measures identified in that report include specific knowledge, skills, and abilities. Using this report and the JFMIP study on core competencies, and in collaboration with DOD representatives, we identified four indicators to measure the attributes that key financial managers can bring to their positions. These indicators include formal education, professional work experience, training, and professional certifications. These attributes are being used to measure the qualifications and experience of key financial managers in the five DOD organizations included in our reviews.
We then worked with Navy officials in developing a data collection instrument to gather the following types of information for each indicator:
Formal education: degrees attained, academic majors, and specific accounting and financial-related courses completed.
Professional work experience: (1) number of years worked in current position, years at DOD, years in other government agencies, and years in the private sector and (2) experience in the five specific financial management-related functions.
Training (referred to as continuing professional education in the profile instrument): for the period of 1995-1996, specific training related to accounting, other financial-related topics, and general topics.
Professional certifications: CPA, CGFM, other financial certifications, and other nonfinancial management certifications held.
For the four Navy executives, we obtained information on their formal education, careers, and professional certifications from biographies provided by these officials. For all other individuals, due to Navy officials’ concerns over the completeness of personnel files and databases, we also agreed to collect information on the four indicators using profile instruments. This procedure is being used for collecting qualification and experience information from all DOD organizations in this series of assignments.
The Navy liaisons sent profile instruments to the key Navy and Marine Corps financial managers in the Office of the Assistant Secretary of the Navy (Financial Management and Comptroller) and major commands and installations identified for this review. The liaisons and we contacted those financial managers who did not initially respond as well as those managers whose profile instruments were returned with incomplete information. Through these efforts, we received complete profile information from the four Navy executives and 63 percent of the key financial managers identified for this review. Figure I.1 contains the profile instrument we used to obtain personnel qualification and experience information from the key financial managers.
As agreed with the Navy, we did not attempt to verify the information contained in the profiles. However, as noted above, for incomplete instruments, the Navy liaisons and we conducted follow-up efforts and obtained the missing information.
We conducted our work from March 1997 through January 1998 in accordance with generally accepted government auditing standards.
We included seven key financial managers in the Office of the Assistant Secretary of the Navy (Financial Management and Comptroller) (ASN/FM&C), all of whom provided information on their qualifications and experience. This population included one manager involved in financial operations, one manager in financial management/accounting policy, and five managers in budget execution functions. Table II.1 shows the officer and civilian composition of these managers, by rank and grade, respectively.
Rear Admiral (O-7)
Captain (O-6)
Commander (O-5)
Lieutenant Commander (O-4)
Lieutenant (O-3)
Lieutenant (junior grade) (O-2)

	Formal Education Attained

As shown in table II.2, seven respondents held bachelor’s degrees, with one reporting more than one major. None of the seven managers majored in accounting and one manager reported a business-related major.
As shown in table II.3, three respondents also held master’s degrees. One manager held a master’s degree in accounting and another manager reported a business-related major.
Four respondents reported completing one or more courses in accounting-related subjects, as follows:
1-2 subjects: two civilians,
3-5 subjects: none, and
6 or more subjects: two civilians.
Based solely on a review of their formal education, the two civilians in the latter group appear to have met the requirements to serve in GS-510 accountant positions.

	Professional Work Experience Acquired

A review of the profiles showed that the number of years of professional work experience was 26 years for the officer, and the average number of years was 23 years for the civilians, with a range of 18 to 31 years. With one exception, the respondents had spent most of their careers in DOD. Figures II.1 and II.2 show the work experience by rank for the officer and by grade for the civilians, respectively.
Captain (1)
Managers by rank (number at each rank)
S Execves ()
Managers by grade (number at each grade)
Figures II.3 and II.4 show the number of officers and civilians who indicated that they had performed each financial management function previously outlined at sometime during their careers, and the average number of years of experience in each function. Financial analysis was the function performed most frequently. A review of the profiles also showed that three civilians had performed three or more of these functions.
Number of managers performing function (total = 1 respondent) g policy ( yea) yea) opon ( yea) ( yea)
Number of managers performing function (total = 6 respondents) g policy ( yea) yea) opon ( yea) ( yea)

	Training Completed During 1995 and 1996

Figure II.5 shows the training reported by the seven respondents as being completed during 1995 and 1996.
Number of managers (total = 7 respondents)
A review of the profiles showed total receiving accounting-related training: two civilians, total receiving financial-related training: two civilians, total receiving training in general topics: six civilians, and total not receiving training: one officer.

	Professional Certifications Held

A review of the profiles showed that, of the two respondents reporting one or more professional certifications, one civilian was a CPA and CGFM and held another financial certification and the officer held another financial management certification.
Five civilians did not hold any professional certifications. Figure II.6 shows the types of professional certifications reported by the ASN/FM&C financial managers.
Number of managers (total = 7 respondents)

Profiles of Navy Operational Command and Installation Respondents

The four Navy operational commands included in this review, shown below, managed O&M and working capital fund budgets totaling $10.8 billion during fiscal year 1997:
U.S. Atlantic Fleet,
U.S. Pacific Fleet,
U.S. Navy in Europe, and
Military Sealift Command.
Surveys were distributed to 128 financial managers; 74 responded, representing the four operational commands and 34 of their 50 installations. Table III.1 shows the number of installations responding by major command, the number of key financial managers surveyed within each command, and the number responding to this review. The table also shows the O&M funding budgeted for fiscal year 1997 for three of the major commands, and the working capital fund budget for the Military Sealift Command.
Budgets (in billions)
U.S. Atlantic Fleet (15)
U.S. Pacific Fleet (12)
U.S. Navy in Europe (2)
Military Sealift Command (5)
Total (34)
The 74 respondents included 29 comptrollers, 18 deputy comptrollers, and 27 budget officers. Table III.2 shows the officer and civilian composition of the respondents, by rank and grade, respectively.
Rear Admiral (O-7)
Captain (O-6)
Commander (O-5)
Lieutenant Commander  (O-4)
Lieutenant (O-3)
Lieutenant (junior grade) (O-2)

	Formal Education Attained

As shown in table III.3, 58 of the 74 respondents held bachelor’s degrees, with 1 reporting two majors. The major for 15 of these managers was accounting, while 27 managers reported other business-related majors.
As shown in table III.4, 31 respondents also held master’s degrees, with 3 reporting more than one major. Three managers held a master’s degree in accounting, while 25 managers listed one or more other business-related majors.
Sixty-eight of the 74 respondents reported completing one or more courses in accounting-related subjects, as follows:
1-2 subjects: 9 (3 officers and 6 civilians),
3-5 subjects: 16 (4 officers and 12 civilians), and
6 or more subjects: 43 (16 officers and 27 civilians).
Based solely on a review of their formal education, 14 officers and 27 civilians in the latter group appear to have met the requirements to serve in GS-510 accountant positions.

	Professional Work Experience Acquired

A review of the profiles showed that the average number of years of professional work experience was 20 years for the 23 officers, with a range of 9 to 30 years, and 30 years for the 51 civilians, with a range of 12 to 45 years. With two exceptions, the 74 respondents had spent most of their careers in DOD. Figures III.1 and III.2 show the work experience by rank for the officers and by grade for the civilians, respectively.
C () ) nd ()
L ()
Managers by rank (number at each rank)
SES (1) GS-15 (6)
GS-14 (6)
GS-13 (16)
GS-12 (20)
GS-11 (2)
Managers by grade (number at each grade)
Figures III.3 and III.4 show the number of officers and civilians who indicated that they had performed each financial management function previously outlined at sometime during their careers, and the average number of years of experience in each function. Financial analysis was the function performed most frequently. A review of the profiles also showed that 16 officers and 33 civilians had performed three or more of these functions.
Number of managers performing function (total = 23 respondents) g policy ( yea) yea) opon ( yea) ( yea)
Number of managers performing functions (total = 51 respondents) g policy ( yea) yea) opon ( yea) ( yea)

	Training Completed During 1995 and 1996

Figure III.5 shows the training reported by the 74 respondents as being completed during 1995 and 1996.
Number of managers (total = 74 respondents)
A review of the profiles showed total receiving accounting-related training: 30 (9 officers and 21 civilians), total receiving financial-related training: 35 (11 officers and 24 civilians), total receiving training in general topics: 50 (10 officers and 40 civilians), and total not receiving training: 17 (9 officers and 8 civilians).

	Professional Certifications Held

A review of the profiles showed that, of the 17 managers reporting one or more professional certificates,
4 were CPAs (1 officer and 3 civilians),
10 were CGFMs (1 officer and 9 civilians),
3 held other financial management certifications (2 officers and 1 civilian), and
2 held nonfinancial management certifications (1 officer and 1 civilian).
Of the 57 managers that did not hold any professional certifications, 19 were officers and 38 were civilians. Figure III.6 shows the types of professional certifications reported by the Navy operational command and installation financial managers.
Number of managers (total = 74 respondents)

Profiles of Chief of Naval Education and Training (CNET) and Installation Respondents

CNET managed an O&M budget of $1.1 billion for fiscal year 1997. Twelve of the 17 key financial managers from CNET (representing six of its seven installations) provided information on their qualifications and experience, including 6 comptrollers, 1 deputy comptroller, and 5 budget officers. Table IV.1 shows the officer and civilian composition of the 12 respondents, by grade and rank, respectively.
Rear Admiral (O-7)
Captain (O-6)
Commander (O-5)
Lieutenant Commander  (O-4)
Lieutenant (O-3)
Lieutenant (junior grade) (O-2)

	Formal Education Attained

As shown in table IV.2, 10 respondents held bachelor’s degrees, with 1 reporting more than one major. Five managers majored in accounting, while four managers reported other business-related majors.
As shown in table IV.3, two respondents also held master’s degrees, with one reporting two majors. The major for one of the two managers was business related.
Nine of the 12 respondents reported completing one or more courses in accounting-related subjects, as follows:
1-2 subjects: 1 officer,
3-5 subjects: 2 civilians, and
6 or more subjects: 6 civilians.
Based solely on a review of their formal education, the six civilians in the latter group appear to have met the requirements to serve in GS-510 accountant positions.

	Professional Work Experience Acquired

A review of the profiles showed that the number of years of professional work experience for the officer was 19 years and the average number of years was 30 years for the 11 civilians, with a range of 14 to 37 years. The respondents had spent most of their careers in DOD. Figures IV.1 and IV.2 show the average number of years of work experience by rank for the officer and by grade for the 11 civilians, respectively. nd ()
Managers by rank (number at each rank)
SES (1) GS-15 (1)
GS-14 (1)
GS-13 (1)
GS-12 (5)
GS-11 (2)
Managers by grade (number at each grade)
Figures IV.3 and IV.4 show the number of officers and civilians who indicated that they had performed each financial management function previously outlined at sometime during their careers, and the average number of years of experience in each function. The financial management function performed most frequently was financial analysis. A review of the profiles also showed that the officer and six civilians had performed three or more of these functions.
Number of managers performing function (total = 1 respondent) g policy ( yea) yea) opon ( yea) ( yea)
Number of managers performing function (total = 11 respondents) g policy ( yea) yea) opon ( yea) ( yea)

	Training Completed During 1995 and 1996

Figure IV.5 shows the training reported by 12 respondents as being completed during 1995 and 1996.
Number of managers (total = 12 respondents)
A review of the profiles showed total receiving accounting-related training: 7 (1 officer and 6 civilians), total receiving financial-related training: 7 (1 officer and 6 civilians), total receiving training in general topics: 11 (1 officer and 10 civilians), and total not receiving training: 1 civilian.

	Professional Certifications Held

None of the 12 respondents reported holding professional certifications.

Profiles of Navy Working Capital Fund Respondents

The 28 Navy working capital fund installations, including shipyards, weapons centers, aviation depots, supply centers, and public work centers, managed a fiscal year 1997 budget of $12.5 billion budget, derived from their customers’ O&M accounts. Forty-nine of the 79 financial managers at the Naval Sea Systems Command, Naval Air Systems Command, Naval Supply Systems Command, and Naval Facilities Engineering Command and 19 of their installations provided information on their qualifications and experience. The 49 respondents included 18 comptrollers, 14 deputy comptrollers, 15 budget officers, and 2 working capital fund managers. Table V.1 provides the ranks of the 8 officers and grades of the 41 civilians.
Rear Admiral (O-7)
Captain (O-6)
Commander (O-5)
Lieutenant Commander  (O-4)
Lieutenant (O-3)
Lieutenant (junior grade) (O-2)

	Formal Education Attained

As shown in table V.2, 44 of the 49 respondents held bachelor’s degrees, with 1 reporting more than one major. Fifteen managers majored in accounting, while 20 managers reported other business-related majors.
As shown in table V.3, 23 respondents also held master’s degrees, with 1 reporting two majors. One manager reported a master’s degree in accounting and 17 managers listed other business-related majors.
Forty-eight of the 49 respondents reported completing one or more courses in accounting-related subjects, as follows:
1-2 subjects: 4 (1 officer and 3 civilians),
3-5 subjects: 13 (3 officers and 10 civilians), and
6 or more subjects: 31 (4 officers and 27 civilians).
Based solely on a review of their formal education, the 4 officers and 26 civilians in the latter group appear to have met the requirements to serve in GS-510 accountant positions.

	Professional Work Experience Acquired

A review of the profiles showed that the average number of years of professional work experience was 24 years for the 8 officers, with a range of 4 to 33 years, and 27 years for the 41 civilians, with a range of 8 to 55 years. The respondents had spent most of their careers in DOD. Figures V.1 and V.2 show the average number of years of work experience by rank for the officers and by grade for the civilians, respectively.
C () ) nd ()
Managers by rank (number at each rank)
S Execves ()
GS- ()
GS- ()
GS- ()
GS- ()
GS- ()
Managers by grade (number at each grade)
Figures V.3 and V.4 show the number of officers and civilians who indicated that they had performed each financial management function previously outlined at sometime during their careers, and the average number of years of experience in each function. The financial management function performed most frequently was financial analysis. A review of the profiles also showed that 6 officers and 27 civilians had performed three or more of these functions.
Number of managers performing function (total = 8 respondents) g policy ( yea) yea) opon ( yea) ( yea)
Number of managers performing function (total = 41 respondents) g policy ( yea) yea) opon ( yea) ( yea)

	Training Completed During 1995 and 1996

Figure V.5 shows the training reported by the 49 respondents as being completed during 1995 and 1996.
Number of managers (total = 49 respondents)
A review of the profiles showed total receiving accounting-related training: 15 (3 officers and 12 civilians), total receiving financial-related training: 29 (3 officers and 26 civilians), total receiving training in general topics: 46 (7 officers and 39 civilians), and total not receiving training: 3 (1 officer and 2 civilians).

	Professional Certifications Held

A review of the profiles showed that, of the 10 managers holding one or more professional certifications,
3 civilians were CPAs,
6 were CGFMs (1 officer and 5 civilians),
2 civilians held other financial management certifications, and
1 civilian held nonfinancial management certifications.
Of the 39 managers that did not hold any professional certifications, 7 were officers and 32 were civilians. Figure V.6 shows the types of professional certifications reported by the Navy working capital fund key financial managers.
Number of managers (total = 49 respondents)

Profiles of Navy Systems Command Respondents

In addition to overseeing their respective working capital fund activities, the Naval Sea Systems Command and Naval Air Systems Command also have oversight of the development of Navy systems. These commands managed an O&M budget of $5.0 billion, a RDT&E budget of $4.5 billion, and a procurement budget of $15.3 billion during fiscal year 1997.
Twenty-four of the 37 key financial managers at these commands and 9 of their 13 installations provided information on their qualifications and experience. The 24 included 9 comptrollers, 7 deputy comptrollers, and 8 budget officers. Table VI.1 shows the officer and civilian composition of the 24 respondents.
Rear Admiral (O-7)
Captain (O-6)
Commander (O-5)
Lieutenant Commander (O-4)
Lieutenant (O-3)
Lieutenant (junior grade) (O-2)

	Formal Education Attained

As shown in table VI.2, 23 of the 24 respondents held bachelor’s degrees, with 1 also reporting two majors. Seven of these managers majored in accounting, while 10 managers reported other business-related majors.
As shown in table VI.3, 12 respondents also held master’s degrees. One manager reported a master’s degree in accounting and eight managers listed other business-related majors.
Twenty-three of the 24 respondents reported completing one or more courses in accounting-related subjects, as follows:
1-2 subjects: 2 civilians,
3-5 subjects: 7 civilians, and
6 or more subjects: 14 (2 officers and 12 civilians).
Based solely on a review of their formal education, the respondents in the latter group appear to have met the requirements to serve in GS-510 accountant positions.

	Professional Work Experience Acquired

A review of the profiles showed that the average years of professional work experience was 26 years for the 2 officers, with a range of 24 to 27 years, and 27 years for the 22 civilians, with a range of 16 to 55 years. With one exception, the respondents had spent most of their careers in DOD. Figures VI.1 and VI.2 show the average number of years of work experience by rank for the 2 officers and by grade for the 22 civilians, respectively.
Captain (2)
Managers by rank (number at each rank)
S Execves ()
GS- ()
GS- ()
GS- ()
Managers by grade (number at each grade)
Figures VI.3 and VI.4 show the number of officers and civilians who indicated that they had performed each financial management function previously outlined at sometime during their careers and the average number of years of experience in each function. The financial management function performed most frequently was financial analysis. A review of the profiles also showed that one officer and nine civilians had performed three or more of these functions.
Number of managers performing function (total = 2 respondents) g policy ( yea) yea) opon ( yea) ( yea)
Number of managers performing function (total = 22 respondents) g policy ( yea) yea) opon ( yea) ( yea)

	Training Completed During 1995 and 1996

Figure VI.5 shows the training reported by the 24 respondents as being completed during 1995 and 1996.
Number of managers (total = 24 respondents)
A review of the profiles showed total receiving accounting-related training: 7 (1 officer and 6 civilians), total receiving financial-related training: 9 (1 officer and 8 civilians), total receiving training in general topics: 19 (2 officers and 17 civilians), and total not receiving training: 5 civilians.

	Professional Certifications Held

A review of the profiles showed that, of the eight managers reporting one or more professional certifications, five civilians were CPAs, four were CGFMs (one officer and three civilians), and two civilians held nonfinancial management certifications.
Of the 16 managers that did not hold any professional certifications, 1 was an officer and 15 were civilians. Figure VI.6 shows the types of professional certifications reported by the Navy systems command key financial managers.
Number of managers (total = 24 respondents)

Profiles of Marine Corps Respondents

The Marine Corps managed an O&M budget of $1.8 billion, a RDT&E budget of $266.4 million, and a procurement budget of $580.7 million during fiscal year 1997. Thirty-three of the 44 key financial managers (representing the Headquarters, U.S. Marine Corps and 12 of its 17 commands and installations) provided information on their qualifications and experience, including 11 comptrollers, 9 deputy comptrollers, and 13 budget officers. Table VII.1 shows the officer and civilian composition of the respondents by rank and grade, respectively.
Brigadier General (O-7)
Colonel (O-6)
Lieutenant Colonel (O-5)
Major (O-4)
Captain (O-3)
First Lieutenant (O-2)

	Formal Education Attained

As shown in table VII.2, 29 of the 33 respondents held bachelor’s degrees. Six managers majored in accounting, while 14 managers reported other business-related majors.
As shown in table VII.3, 13 respondents also held master’s degrees, with 3 reporting more than one major. The majors for these managers were business related.
Twenty-nine of the 33 respondents reported completing one or more courses in accounting-related subjects, as follows:
1-2 subjects: 2 civilians,
3-5 subjects: 7 (2 officers and 5 civilians), and
6 or more subjects: 20 (8 officers and 12 civilians).
Based solely on a review of their formal education, the respondents in the latter group appear to have met the requirements to serve in GS-510 accountant positions.

	Professional Work Experience Acquired

A review of the profiles showed that the average years of professional work experience was 21 years for the 11 officers, with a range of 15 to 28 years, and 26 years for the 22 civilians, with a range of 12 to 42 years. The respondents had spent most of their careers in DOD. Figures VII.1 and VII.2 show the average number of years of work experience by rank for the officers and by grade for the civilians, respectively.
Con() ()
M ()
C ()
Managers by rank (number at each rank)
S Execves ()
GS- ()
GS- ()
GS- ()
GS- ()
GS- ()
Managers by grade (number at each grade)
Figures VII.3 and VII.4 show the number of officers and civilians who indicated that they had performed each financial management function previously outlined at sometime during their careers, and the average number of years of experience in each function. The financial management function performed most frequently was financial analysis. A review of the profiles also showed that 7 officers and 13 civilians had performed three or more of these functions.
Number of managers performing function (total = 11 respondents) g policy ( yea) yea) opon ( yea) ( yea)
Number of managers performing function (total = 22 respondents) g policy ( yea) yea) opon ( yea) ( yea)

	Training Completed During 1995 and 1996

Figure VII.5 shows the training reported by the 33 respondents as being completed during 1995 and 1996.
Number of managers (total = 33 respondents)
A review of the profiles showed total receiving accounting-related training: 10 (4 officers and 6 civilians), total receiving financial-related training: 18 (6 officers and 12 civilians), total receiving training in general topics: 23 (5 officers and 18 civilians), and total not receiving training: 8 (5 officers and 3 civilians).

	Professional Certifications Held

A review of the profiles showed that, of the six managers holding one or more professional certifications, three were CGFMs (one officer and two civilians), two civilians held other financial management certifications, and one civilian held nonfinancial management certifications.
Of the 27 managers that did not hold any professional certifications, 10 were officers and 17 were civilians. Figure VII.6 shows the types of professional certifications reported by the Marine Corps financial managers.
Number of managers (total = 33 respondents)

Comments From the Department of the Navy

Major Contributors to This Report

	Accounting and Information Management Division, Washington, D.C.

George H. Stalcup, Associate Director Geoffrey B. Frank, Assistant Director Robert L. Self, Project Manager Donald H. Lentz, Auditor-in-Charge Patricia A. Summers, Senior Auditor Linda J. Brigham, Senior Auditor Jan E. Bogus, Senior Auditor Francine M. DelVecchio, Communications Analyst Michelle A. Howard, Intern The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent.
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Summary:
Why GAO Did This Study

Pursuant to a legislative requirement, GAO provided information on the qualifications and experience of the Department of Defense's (DOD) financial management workforce, focusing on the Navy's and the Marine Corps' key financial managers.

What GAO Found

GAO noted that: (1) the four Navy financial management executives included in this review are the Assistant Secretary of the Navy; the Principal Deputy Assistant Secretary of the Navy; the Director, Office of Financial Operations; and the Director, Office of Budget; (2) each of the executives had attained bachelor's degrees and three of the four executives also held master's degrees; (3) the Assistant Secretary had spent 27 years at DOD and 5 years in the private sector; (4) the other three executives had DOD careers ranging from 23 to 32 years, with two of these executives also spending part of their careers in another government agency or the private sector; (5) about 23 percent were military officers, serving mainly as comptrollers at major commands and installations, and 77 percent were civilian personnel serving mainly in comptroller and budget officer positions at installations; (6) all 44 officers and 122 of the 150 civilians reported holding bachelor's degrees, with 5 of these respondents reporting more than one major; (7) about 28 percent of these 166 managers majored in accounting, while approximately 43 percent reported degrees in business-related majors other than accounting; (8) eighty respondents also reported holding master's degrees, with 8 of these respondents reporting more than one major; (9) six of these 80 managers held master's degrees in accounting, while about 78 percent reported degrees in business-related majors other than accounting; (10) the officers' careers ranged from 4 to 33 years while civilians' careers ranged from 8 to 55 years; (11) 166 respondents reported completing training in one or more of the categories included in GAO's review during 1995 and 1996; (12) about 22 percent of the 94 respondents reported holding one or more professional certifications; and (13) the 42 managers in this group reported holding accounting and other financial-related certifications.