GAO

United States General Accounting Office

Accounting and Information 

Management Division

April 2000 EXECUTIVE GUIDE

Creating Value 

Through World-class 

Financial Management

GAO/AIMD-00-134

GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 1

Preface

To help promote effective implementation of federal financial management reform, we studied the

financial management practices and improvement efforts of nine leading public and private sector

finance organizations to identify the success factors, practices, and outcomes associated with worldclass financial management. This executive guide is intended to assist federal agencies in achieving the

objectives of the Chief Financial Officers (CFO) Act of 1990 and subsequent related legislation by

providing case studies of 11 practices critical for establishing and maintaining sound financial

operations.

The reforms laid out by the CFO Act and subsequent related legislation, when effectively implemented,

will place the federal government on par with private sector corporations and state and local

governments that have already made the necessary investment in financial management. While many

agencies have made great strides toward generating more accurate and reliable annual financial

statements, the process of preparing financial statements and subjecting them to independent audit is

only the first step toward satisfying the requirements of the legislation. To reap the full benefits of

financial reform, federal finance organizations must go beyond the audit opinion toward

(1) establishing seamless systems and processes, (2) routinely generating reliable cost and performance

information and analysis, (3) undertaking other value-added activities that support strategic decisionmaking and mission performance, and (4) building a finance team that supports the agency’s mission

and goals.

This executive guide was prepared under the direction of Lisa G. Jacobson, Director, Defense Audits.

Other GAO contacts and key contributors are listed in appendix VIII. Questions can be directed to me

at (202) 512-2600, steinhoffj.aimd@gao.gov, or Linda Garrison, Assistant Director, by phone, e-mail,

or regular mail at the following:

Phone: (404) 679-1902

E-mail: garrisonl.atlro@gao.gov

Mail: Linda Garrison, Assistant Director

U.S. General Accounting Office

2635 Century Parkway, Suite 700

Atlanta, GA 30345

Jeffrey C. Steinhoff

Acting Assistant Comptroller General

Accounting and Information Management Division
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 2
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 3

Contents

Background 4

Learning from Leading 6

Organizations

Characteristics of a World-class 7

Finance Organization

Goals, Practices, and

Strategies To Consider 8

Make Financial Management an Entitywide Priority 9

Redefine the Role of Finance To Better Support Mission Objectives 19

Provide Meaningful Information to Decisionmakers 29

Build a Finance Team That Delivers Results 39

Appendixes

Appendix I: Research Objectives, Scope, and Methodology 46

Appendix II: Supplemental Case Study Information 47

Appendix III: World-class Finance Performance Metrics 48

Appendix IV: Comparison of Selected Federal Agencies & Case Study Entities 49

Appendix V: Related Resources, Information Links, and Tools 52

Appendix VI: Bibliography 55

Appendix VII: Leading Organization Contacts and Project Advisor

Acknowledgements 56

Appendix VIII: GAO Contacts and Staff Acknowledgments 57
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 4

Background

Creating a government that runs more efficiently and effectively has been a public concern for decades.

In recent years, however, the push towards creating a smaller, more results oriented government has

intensified the urgency to find ways to do more with less. To effectively evaluate and improve the

value derived from government programs and spending, the Congress and other decisionmakers must

have accurate and reliable financial information on program cost and performance. Further, they must

be able to rely on federal finance organizations to provide analysis and insight about the financial

implications of program decisions and the impact of those decisions on agency performance goals and

objectives. Currently, financial data are not always useful, relevant, timely, and reliable enough to be

used for federal decision-making, and many federal finance organizations are not yet well equipped

enough to routinely provide analysis or advice related to this information.

In the private sector, the role of the finance organization historically has centered on oversight and

control, focusing on its fiduciary responsibilities and paying less attention to increasing the

effectiveness of operating divisions. However, over the past decade, dramatic changes in the business

environment have driven finance organizations to reevaluate this role. Increased competition resulting

from an emerging global market has put pressure on finance organizations to find new ways to reduce

administrative costs, add value, and provide a competitive advantage. At the same time, advances in

information technology have made it possible for the finance function to shift from a paper-driven,

labor intensive, clerical role to a more consultative role as advisor, strategist, analyst, and business

partner.

According to a 1997 study performed by a major public accounting firm,1

most CFOs in 1989 were

spending 75 to 80 percent of their time on fiduciary issues, essentially external reporting. Today, the

goal of many leading finance organizations is to spend about 20 percent of their time on fiduciary issues

and the remaining time performing strategic support activities, such as cost analysis or business

performance analysis. Also, a 1996 report by the Institute of Management Accountants found that over

the previous 5 to 10 years, management accountants were increasingly being asked to supplement their

traditional accounting role with more financial analysis and management consulting.2

Dramatic changes also have occurred in federal financial management in response to the most

comprehensive management reform legislation of the past 40 years. The combination of reforms

ushered in by (1) the CFO Act of 1990, (2) the Government Management Reform Act (GMRA) of

1994, (3) the Federal Financial Management Improvement Act (FFMIA) of 1996, (4) the Government

Performance and Results Act (GPRA) of 1993, and (5) the Clinger-Cohen Act of 1996 will, if

successfully implemented, provide the necessary foundation to run an effective, results-oriented

government.

1

Reinventing the CFO: Moving from Financial Management to Strategic Management (Coopers and Lybrand, New York, New

York: 1997).

2

The Practice Analysis of Management Accounting, Institute of Management Accountants (Montvale, New Jersey: 1996).
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 5

The CFO Act and GMRA spelled out a long overdue and ambitious agenda to help the government

remedy its lack of useful, relevant, timely, and reliable financial information. For the government’s

major departments and agencies, this legislation (1) established chief financial officer positions,

(2) required audited financial statements annually, and (3) set expectations for agencies to develop and

deploy more modern financial management systems, produce sound cost and operating performance

information, and design results oriented reports on the government’s financial condition by integrating

budget, accounting, and program information. FFMIA built on the CFO Act and GMRA by requiring

financial statement auditors to report whether agencies’ financial systems comply with federal financial

management systems requirements, federal accounting standards, and the U.S. Government Standard

General Ledger.

The Government Performance and Results Act of 1993--commonly know as GPRA or the Results Act--

was enacted to hold federal agencies accountable for achieving program results. It requires that

agencies (1) set multiyear strategic goals and corresponding annual goals, (2) measure performance

toward the achievement of those goals, and (3) report on their progress. Effective implementation of

the Results Act, however, hinges on agencies’ ability to routinely produce meaningful budget,

accounting, and program information needed to manage performance and measure results. The CFO

Act and other related financial reform legislation, if successfully implemented, will provide the basis

for producing this information.

To help insure that agencies effectively use information technology to achieve program results, the

Congress passed the Clinger-Cohen Act of 1996. The Clinger-Cohen Act builds on the best practices of

leading public and private sector organizations by requiring agencies to better link their information

technology planning and investment decisions to program missions and goals. The Clinger-Cohen Act

contains critical provisions requiring federal agencies to use investment and capital planning processes

to manage their information management technology portfolios. Further, it requires that agencies

modernize inefficient administrative and mission-related work processes before making significant

technology investments to support them.

Implemented together, these measures provide a basis for improving accountability over government

operations and routinely producing sound cost and operating performance information, thereby making

it possible to better assess and improve the government's financial condition and operating

performance.

Background
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 6

Learning From Leading Organizations

To help promote effective implementation of federal financial management reform, we studied the

financial management practices and improvement efforts of nine leading private and public sector

finance organizations to identify the success factors, practices, and outcomes associated with worldclass financial management. The six private sector and three state organizations we studied have been

recognized by their peers and other independent researchers for their outstanding financial management

practices and successful finance reengineering efforts. For more information on the criteria we used to

select these organizations, see appendix I. As federal agencies continue to improve their management

and financial accountability, they will be able to draw upon the expertise and experience of these

private sector and state government organizations.

Leading Finance Organizations

Private sector State governments

The Boeing Company Massachusetts

Chase Manhattan Bank Texas

General Electric Company Virginia

Hewlett-Packard

Owens Corning

Pfizer Inc

At one time, all of these organizations found themselves in an environment similar to the one

confronting federal agencies today--one in which they were called upon to improve financial

management while simultaneously reducing costs. The key practices drawn from the organizations we

examined can provide a useful framework for federal agencies working to improve their financial

management. This guide discusses the goals, success factors, and practices associated with building a

world-class finance organization. Specifically, we have identified 4 overall goals common to these

leading organizations along with 11 practices that were critical to their ability to meet these goals. In

addition, this guide includes examples from our case study work that best illustrate how each practice

enabled the selected organization to achieve the desired outcomes.

We preceded our case study work with an extensive review of financial management literature, guides,

and reports. We also consulted with leading public and private sector experts in financial management.

Case study data were collected through interviews and analysis of documentation. Further, the case

study organizations reviewed all case study information included in this guide for accuracy and

completeness. Appendix I provides a more detailed description of our research objectives, scope, and

methodology.
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 7

Characteristics of a World-class Finance

Organization

A world-class finance organization can best be defined in terms of the business outcomes it produces--

outcomes such as improved business analysis, innovative solutions to business problems, reduced

operating costs, increased capability to perform ad-hoc analysis, and improved overall business

performance. To build a world-class finance organization and help achieve better business outcomes,

each of the organizations we examined set an agenda for transforming the finance organization by

defining a “ shared vision” —i.e., a mission, a vision for the future, core values, goals, and strategies—

geared toward making the finance organization a value-creating, customer-focused partner in business

results. Although the techniques used varied depending on the organization's size and culture and some

efforts were more mature than others, the goals, practices, and success factors outlined in the following

illustration were instrumental in the organization achieving its vision.

Success

factors

Goals

Practices

Vision: To be a Value-Creating, Customer-Focused Partner in Business Results

Build a

team

that

delivers

results.

Provide

meaningful

information to

decisionmakers.

Redefine the

role of

finance.

Make financial

management

an entitywide

priority.

11. Build a

finance

organization

that attracts

and retains

talent.

10. Develop a

finance team

with the right

mix of skills

and

competencies

.

7. Develop

systems that

support the

partnership

between

finance and

operations.

8. Reengineer

processes in

conjunction

with new

technology.

9. Translate

financial data

into meaningful information.

1. Build a

foundation of

control and

accountability.

2. Provide clear

strong executive

leadership.

3. Use training

to change the

culture and

engage line

managers.

4. Assess the

finance

organization’s

current role in

meeting

mission

objectives.

5. Maximize

the efficiency

of day-to-day

accounting

activities.

6. Organize

finance to

add value.

•Organization

•Customer

•Technology

•Process

•People •Leadership

•Culture
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 8

Goals, Practices, and Strategies

To Consider

This section summarizes the results of our research and case study work. Specifically, it contains the 4

overall goals and 11 practices we identified as critical for building a world-class finance organization.

To facilitate the practical use of this guide, information is organized into four sections—each

summarizing one of the four goals as well as those practices that have enabled leading organizations to

achieve these goals. Further, for each of the 11 practices, we provided (1) a summary of key

characteristics, (2) illustrative case study examples, and (3) strategies for federal agencies to consider

when implementing the practice.
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 9

Make Financial Management an Entitywide Priority

The quality and image of federal financial management has suffered from decades of neglect and an

organizational culture that has not fully recognized the value of good financial management--not even

at its most basic level--as a means of ensuring accountability. Making financial management a priority

throughout the federal government involves changing the organizational culture of federal agencies.

Although the views about how an organization can change its culture vary considerably, the

organizations we studied identified leadership as the most important factor in successfully making

cultural changes. Top management must be totally committed in both words and actions to changing

the culture, and this commitment must be sustained and demonstrated to staff.

The leading organizations we studied made financial management improvement an entitywide priority

by building a foundation of control and accountability that supports external reporting and performance

management, providing clear strong executive leadership, and using training to change the

organizational culture and engage line management.

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority

Success

factors

Goals

Practices

Vision: To be a Value-Creating, Customer-Focused Partner in Business Results

Build a

team

that

delivers

results.

Provide

meaningful

information to

decisionmakers.

Redefine the

role of

finance.

Make financial

management

an entitywide

priority.

11. Build a

finance

organization

that attracts

and retains

talent.

10. Develop a

finance team

with the right

mix of skills

and

competencies

7. Develop

systems that

support the

partnership

between

finance and

operations.

8. Reengineer

processes in

conjunction

with new

technology.

9. Translate

financial data

into meaningful information.

1. Build a

foundation of

control and

accountability.

2. Provide clear

strong executive

leadership.

3. Use training to

change the

culture and

engage line

managers.

4. Assess the

finance

organization’s

current role in

meeting

mission

objectives.

6. Organize

finance to

add value.

5. Maximize

the efficiency

of day-to-day

accounting

activities.

•Organization

•Customer

•Technology

•Process •People •Leadership

•Culture
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 10

Practice 1

Build a Foundation of Control and

Accountability That Supports External

Reporting and Performance Management

A solid foundation of control and accountability requires a system of checks and balances that provides

reasonable assurance that the entity's transactions are appropriately recorded and reported, its assets

protected, its established policies followed, and its resources used economically and efficiently for the

purposes intended. The private sector and state organizations we visited built and maintained this

foundation largely through the discipline of preparing routine periodic financial statements and annually

subjecting them to an independent audit. However, senior executives at leading organizations

recognize that the financial information demanded by decisionmakers to measure and manage

performance requires greater precision and more timely access than that required to receive an

unqualified opinion on the entity's financial statements. To ensure that decisionmakers have useful,

relevant, timely, and reliable information, leading finance organizations establish accountability goals

that extend well beyond receiving an unqualified audit opinion. In addition, the internal controls at

these organizations are designed to efficiently meet the control objectives necessary for performance

measurement and management as well as external financial reporting.

Similarly, according to a 1998 survey of federal CFOs,3

federal finance organizations continue to

expand their focus from audited financial statements to include performance measurement and strategic

planning. For example, the CFO Council and the Office of Management and Budget (OMB) are

aggressively working on eight priority initiatives outlined in the1998 Federal Financial Management

Status Report and Five-Year Plan. Although one of the eight priorities focused on obtaining an

unqualified opinion on agency financial statements, the eight priorities taken as a whole aim at

improving the financial and performance information needed to make and implement effective policy,

management, stewardship, and program decisions.

3 CFO Survey: Preparing for Tomorrow’s Way of Doing Business, Grant Thornton LLP and the Association of Government

Accountants (Alexandria, Virginia: March 1998).

Key characteristics

•The financial reporting and audit process is a

basic management and oversight tool.

•Accountability is part of the organizational

culture and goes well beyond receiving an

unqualified audit opinion.

•Internal controls meet both external financial

reporting and performance management control

objectives without significantly impacting

efficiency.

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority ♦ Practice 1
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 11

Case Studies

Accountability goals and an effective control structure

provide the basis for a more results-oriented government

Commonwealth of Virginia

To build a foundation of control and account-ability,

senior government leaders in the Commonwealth of

Virginia had clear goals and objectives that went

beyond receiving an unqualified audit opinion. With

the passage of the Single Audit Act in 1984, the

Commonwealth of Virginia had to produce and have

audited Comprehensive Annual Financial Reports

(CAFR) for the first time. Although not required by the

act, the state Comptroller had each state agency also

produce audited financial statements, thereby ensuring

accountability at every level of government rather than

solely at those levels considered material to CAFR.

The goal was to ensure that managers and lawmakers

would have useful, relevant, and timely information for

assessing and managing program performance.

Now that Virginia routinely receives an unqualified

opinion on its CAFR, only those state agencies with a

specific need (e.g., agencies’ operating trust, enterprise

and internal service funds) are required to produce

auditable financial statements. The remaining agencies

now are required to certify the accuracy of financial

information that feeds CAFR. By subjecting all state

agencies to the rigorous discipline of preparing

financial reports and having them audited, the

Comptroller increased accountability for data accuracy

beyond that required to receive an unqualified audit

opinion. State officials continue to raise the bar and

seek new ways to increase accountability and improve

the state’s performance. For example, the Department

of Planning and Budget currently performs trend

analysis and prepares fiscal impact statements for the

state’s legislature, using useful, relevant, and timely

financial information from the state’s integrated budget

and accounting systems. Also, to ensure that

performance data and long-range plans drive budget

decisions, the state has set goals, including

implementing an activity-based accounting and

budgeting system, for enhancing its performance

budgeting process.

Texas

Similarly, in Texas the performance management system

is an integral part of agency and statewide planning

structures, evaluation and decision-making processes,

and accountability systems. Creating and maintaining a

performance management system required close,

consistent, and coordinated attention above and beyond

that required for external financial reporting purposes.

In Texas, the ability to produce fairly stated external

financial reports was only the first step in building a

more effective, results-oriented government. An

unqualified opinion on the state’s CAFR provided,

assurance that financial information was accurate and

reliable for evaluating its overall financial position.

However, an unqualified audit opinion by itself does

not ensure that the information needed to measure and

manage performance is useful, relevant, timely, or

reliable. The internal controls that were considered

adequate for external financial reporting were not

always sufficient for performance management. For

example, internal controls over expenditure data met

the control objectives for aggregating and reporting

this information on the financial statements; however,

they did not meet the objectives for calculating perunit-cost efficiency measures required for performance

management.

Therefore, state agencies, with the help of the State

Auditor’s Office, reevaluated and redesigned agency

internal controls to meet both external financial

reporting and performance management control

objectives. Because the state routinely receives an

unqualified opinion on its CAFR, the State Auditor’s

Office and agency internal auditors no longer spend

the bulk of their time on control issues related to

external financial reporting. Instead, their focus is on

improving the reliability of performance management

information.

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority ♦ Practice 1
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 12

Strategies to Consider

To build a foundation of control and accountability, senior executives could:

• Leverage audit resources and the financial statement audit process to improve data reliability and

increase accountability.

• Increase accountability by establishing goals for (1) producing financial and performance reports

for major programs and/or business segments and (2) moving the organization toward more

frequent financial reporting (e.g., quarterly, monthly).

• As part of the agency’s GPRA performance planning process, (1) establish efficiency criteria that

measure the cost associated with program outcomes and (2) develop an approach for assessing and

improving agency internal controls over finance-related efficiency measures.

• Use accounting and operational performance data to support budget formulation and strategic

planning.

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority ♦ Practice 1
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 13

Practice 2

Provide Clear, Strong

Executive Leadership

A powerful, visionary leader can change the direction, culture, and perceptions of the finance

organization. The chief executive officers (CEO) of leading organizations understand the important

role the CFO and the finance organization play in improving the entity's overall business performance.

Consequently, the CFO is a central figure on the top management team and heavily involved in

strategic planning and decision-making. In addition, the senior executives at these organizations

demonstrated their sustained commitment to finance-related improvement initiatives by using key

business/line managers to drive improvement efforts, attending key meetings, ensuring that the

necessary resources are made available, and creating a system of rewards and incentives to recognize

those who support improvement initiatives. In fact, the committed support of the CEO and line

management are critical to the success of finance-related improvement initiatives.

In the same way, federal financial management reform has recently gained momentum through the

committed support of top federal leaders. For example, the President has made financial management

improvement a top priority and established a goal to obtain an unqualified opinion on the

government’s financial statements. To achieve this goal, he directed the head of each agency without

an unqualified audit opinion to submit to the OMB (1) an initial plan for resolving financial reporting

deficiencies and (2) quarterly progress reports for achieving the goal. Further, OMB is required to

periodically report to the Vice President on the agency submissions and governmentwide progress. In

addition, many federal CFOs have primary leadership responsibility for implementing the Results Act

at the department or agency level. The CFO Council has played a key leadership role in establishing

financial and performance improvement goals and priorities for changing the way federal agencies

plan, budget, manage, evaluate, and account for federal programs.

To ensure that federal financial management improvement efforts succeed and that the President’s and

the CFO Council’s priorities are achieved, the support and involvement of key nonfinancial executives

and managers is critical. This commitment starts with the heads of agencies establishing priorities and

setting expectations and continues with the active involvement of program/line managers and

executives in driving financial improvement initiatives.

Key characteristics

• The chief executive recognizes the

important role the finance organization can

play in improving overall business

performance and involves key business/line

managers in financial management

improvement initiatives.

• The CFO is a member of the top

management team.

• Top executives’ sustained commitment to

improving financial management is

reinforced through both their words and

actions.

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority ♦ Practice 2
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 14

Case Study

Senior leadership involvement is the

key to successfully implementing financial

systems initiatives

The CEO of Owens Corning recognizes that good

financial and operating information and strong

financial leadership are key elements in improving

the company's overall business performance.

In 1992, under the leadership of its new chairman

and CEO, Owens Corning set its sights on

becoming the global leader in home building

materials. However, the chairman realized that the

vision of global growth, designed to drive the

company to $5 billion in sales by the year 1999,

would not be possible without first addressing some

long-standing problems affecting the company's

ability to analyze and use financial information for

decision-making. At the time, financial analysis

was difficult because accounting policies and

business processes varied among business units.

For example, various manufacturing plants used

different costing methods, making cost comparisons

difficult. In addition, closing schedules and

inventory methods often varied between plants,

further complicating meaningful analysis. To

resolve these and other issues, a new CFO was

brought in to implement a wide-reaching overhaul

of the company's business and financial systems

and processes. The companywide initiative would

come to be known as Advantage 2000.

Reengineering can be one of the most difficult tasks

an organization can take on, and Advantage 2000

was no exception. In fact, the degree of difficulty

was compounded by the level of sophistication and

complexity Owens Corning was trying to achieve

with its technology upgrades. The key to Owens

Corning's successful implementation of Advantage

2000 was senior leadership's involvement

throughout the project. Initially, the new system

disrupted the company's operations--to the point

that it was beginning to affect production schedules

and customer satisfaction. Through it all, however,

senior managers never walked away. Instead, they

helped middle managers work through the snags by

providing resources and remaining visible at key

meetings.

Replacing more than 200 outdated financial

systems with state-of-the-art business software and

client/server technology is not only complex but

also quite costly. From 1995 through 1998, Owens

Corning’s cumulative investment in Advantage

2000 was $145 million, but according to company

executives the program will generate savings in

ongoing expense and working capital. The bottom

line--the CEO and top executives of Owens

Corning recognized that investing in Advantage

2000 cost less than maintaining the status quo.

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority ♦ Practice 2
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 15

Strategies to Consider

To demonstrate and reinforce commitment to improving financial management, heads of agencies and

senior executives could:

• Form an executive management team (heads of component organizations and those reporting

directly to the agency head) to establish a vision and fundamental goals and provide sponsorship for

each major financial management improvement project.

• Involve key program /business managers in driving financial improvement initiatives.

• Develop a plan to ensure that all key constituents visibly support financial management

improvement initiatives.

• Actively market the program benefits of financial management improvement efforts to secure the

necessary resources and Congressional support.

• Establish an expectation that top financial executives, as part of the top management team, provide

forward looking analysis that creates a link between accounting information and budget formulation

and contributes to strategic planning and decision-making.

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority ♦ Practice 2
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 16

Practice 3

Use Training to Change the

Organizational Culture and

Engage Line Management

Improving federal financial management hinges upon leadership's ability to manage change and create

an organizational culture that values good financial management. Legislation starting with the CFO

Act of 1990 has been directed at enhancing the finance organization’s responsibilities in supporting the

management of federal activities. Although acceptance by the program offices has sometimes been

slow, according to a recent survey of federal CFOs,4

program directors are starting to look to the

finance organization for help. They attribute the change to a joint effort by program and finance

offices to implement the Results Act and develop strategic plans. In addition, the CFO Council’s

numerous outreach efforts and GPRA-related education events have helped to win the acceptance of

program managers.

The key to successfully managing change and changing organizational culture is gaining the support of

line management. To change the organizational culture and enlist the support of line managers, many

organizations utilize training programs. Some are generic in nature and are intended to help people

anticipate and cope with change and ensure that every person in the organization understands the need

for change. Others are specifically geared towards providing line managers with a greater appreciation

of the financial implications of their business decisions. Through these interactions, financial

managers gain a better understanding of business problems and nonfinancial managers gain an

appreciation of the value of financial information. This not only produces better managers, it also

helps break down functional barriers that can affect productivity and impede improvement efforts.

In addition, these organizations provide tools to facilitate and accelerate the pace of the change

initiative. According to one executive we met with, change initiatives that are implemented slowly

generally fail because staff have too much time to contemplate the potential negative effects that

change might bring and rally opposition that ultimately undermines the effort.

4

CFO Survey: Preparing for Tomorrow’s Way of Doing Business, Grant Thornton LLP and the Association of

Government Accountants (Alexandria, Virginia: March 1998).

Key characteristics

• Nonfinancial managers are educated about

the financial implications of business

decisions.

• Training and tools are provided to facilitate

and accelerate the pace of change

initiatives.

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority ♦ Practice 3
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 17

Case Study

Training programs teach nonfinancial managers the value

of financial information and facilitate the pace of change

The Boeing Company

To ensure that nonfinancial managers at all levels

understand the value of financial information, Boeing has

developed an education program that teaches managers

basic business competence. Using a three-step

development planning process, managers assess their

current capabilities, determine their specific development

needs, and build and execute a development plan. (See

appendix II.) Depending on individual need, Boeing offers

a variety of learning experiences including self-paced,

team, classroom, case study, and simulation. For example,

through Boeing's Creating Value learning project, managers

learn how to recognize the importance of cash flow and its

influence on business decisions, understand shareholder

expectations and the consequences of not meeting them,

and identify the relationship between individual decisions

and actions and shareholder value.

The information is presented in a "multiple media" format

in order to accommodate different learning styles and to

allow learning to occur in different environments and in

periods best suited to the learner. Other learning

experiences include course work, such as Elements of

Product Cost, in which participants analyze and use cost

element information to support decision-making related to

improvement efforts, ensuring that resources are applied

to those activities that return the greatest benefits and

provide the highest value to customers. During the class,

participants learn to apply unit cost principles to the

products they produce as well as how process, activity,

and individual cost elements, such as labor, materials, and

overhead, are accumulated to become unit or product cost.

General Electric

General Electric's (GE) education and training programs

have played a crucial role in changing the organizational

culture and facilitating both financial and nonfinancial

improvement initiatives. One of the most successful

programs is the Change Acceleration Process (CAP)

workshop. During the CAP workshop, GE managers and

professional staff are given tools and taught strategies for

removing cultural barriers to change. GE’s finance

organization has used these tools and strategies to

facilitate improvement initiatives, ranging from

organizational restructuring to changing the role of the

internal audit function.

To be successful, the project teams spearheading these

initiatives had to achieve each of the following

objectives: (1) lead change, (2) create a shared need,

(3) shape a vision, (4) mobilize commitment,

(5) make change last, (6) monitor progress, and

(7) change systems and structures. To ensure that each

objective would be accomplished, the team used a

survey to profile the change process and measures its

progress. Staff and managers were surveyed

periodically and asked to score each of the five

dimensions from 100 percent to 0 percent based on

how well they think each is being accomplished. For

change to be successful, most dimensions must be

rated high.

The profile directed the team's efforts so that they

could develop a strategy to address the areas that

needed the most attention. For example, mobilizing

commitment, especially from those outside the finance

organization, was often one of the more difficult

objectives to accomplish. However, the team used a

method, learned in the CAP workshop, for analyzing

and increasing stakeholder commitment levels. First,

the team listed the names of those individuals whose

support was critical for the success of the project.

Then, they assessed each stakeholder’s level of

commitment based on their perceived level of

agreement--to what degree does the individual agree

that change is needed? If the team perceived a person

did not agree, it developed an individual plan to get

this person's support. Plans were developed by

addressing questions such as: Why are they resisting

this change? Do they have a vested interest in the

status quo? What new opportunities will they have

when the change is implemented? and Who influences

this person and what is their level of acceptance?

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority ♦ Practice 3
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 18

Strategies to Consider

To engage line management and create a culture that values good financial management, heads of

agencies and senior executives could:

• Identify key financial and nonfinancial managers and staff whose support is critical to the success

of financial management improvement initiatives.

• Develop curriculum and provide training that teaches key nonfinancial managers and staff

• how to use financial information to improve operational planning and decision-making and

• how reform legislation (e.g. CFO Act, GMRA, FFMIA, GPRA) will affect operating unit roles,

responsibilities, and processes within the context of specific agency operations.

• For all key managers and staff, develop curriculum and provide training that provides a framework

and tools that can be used to facilitate and accelerate the pace of change initiatives.

Goals, Practices, and Strategies to Consider ♦ Make Financial Management an Entitywide Priority ♦ Practice 3
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 19

Redefine the Role of Finance To Better

Support Mission Objectives

In the private sector, the role of the finance organization historically has centered on oversight and

control, focusing on its fiduciary responsibilities and external financial reporting requirements.

However, over the past decade dramatic changes in the business environment have forced finance

organizations to reevaluate this role. The pressure to reduce administrative costs resulting from

competition in an emerging global market drove many finance organizations to find more efficient

ways to deliver their services. Nonetheless, becoming more efficient is not enough to remain

competitive. Today, leading finance organizations are focusing more on internal customer

requirements by providing products and services that directly support strategic decision-making and

ultimately improve overall business performance.

Similarly, competition has changed the environment in which federal agencies operate. Shrinking

budgets have increased competition for scarce resources, requiring managers to make tough resource

allocation decisions that may affect program delivery. Without the support of federal finance

organizations, program managers may not be able to determine or defend the cost associated with or

benefits derived from government activities. We found the leading finance organizations we visited

had redefined the role of finance to better support mission objectives by assessing the finance

organization's current role in meeting mission objectives, maximizing the efficiency of day-to-day

accounting activities, and organizing finance to add value.

Success

factors

Goals

Practices

Vision: To be a Value-Creating, Customer-Focused Partner in Business Results

Build a

team

that

delivers

results.

Provide

meaningful

information to

decisionmakers.

Redefine the

role of

finance.

Make financial

management

an entitywide

priority.

.

7. Develop

systems that

support the

partnership

between

finance and

operations.

8. Reengineer

processes in

conjunction

with new

technology.

9. Translate

financial data

into meaningful information.

1. Build a

foundation of

control and

accountability.

2. Provide clear

strong executive

leadership.

3. Use training to

change the

culture and

engage line

managers.

4. Assess the

finance

organization’s

current role in

meeting

mission

objectives.

6. Organize

finance to

add value.

5. Maximize

the efficiency

of day-to-day

accounting

activities.

•Organization

•Customer

•Technology

•Process

•People •Leadership

•Culture

11. Build a

finance

organization

that attracts

and retains

talent.

10. Develop a

finance team

with the right

mix of skills

and

competencies
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 20

Practice 4

Assess the Finance Organization's

Current Role in Meeting

Mission Objectives

Many leading finance organizations assess their current role in supporting mission objectives by

comparing the percentage of staff time spent on strategic support activities, such as business

performance analysis or cost analysis, with the percentage of resources spent on transaction processing

and other routine accounting activities. According to a 1995 Financial Executives Research

Foundation report,5

transaction processing and other routine accounting activities, such as accounts

payable, payroll, and external reporting, consume about 69 percent of costs within finance. Other

studies indicate that these activities consume as much as 80 percent of finance's resources. While

transaction processing will always exist, it does not have to drain the finance organization's resources.

Therefore, many leading finance organizations have calculated and compared these percentages as a

general indication of how well they supported the organization's business objectives. A goal for many

leading organizations is to reduce the time spent on transaction processing activities to 20 percent.

To further assess the efficiency and effectiveness of specific products and services, many of the

leading finance organizations we studied relied on benchmarking6

and customer feedback. For

example, comparisons against world-class benchmarks, such as closing the books in less than 4 days or

processing payroll at $1.39 per transaction, were used to identify activities or processes in need of

improvement. (See appendix III: World-class Performance Metrics.) In addition, these organizations

used feedback from their internal customers to gather specific information related to quality and

customer expectations. For example, Hewlett-Packard's finance organization conducted a detailed

survey of about 200 internal customers worldwide in which customers were asked to rank certain

components, or services, as either high or low in terms of both importance and satisfaction. The

survey results were then used to guide improvement initiatives.

5 Reengineering the Finance Function, Financial Executives Research Foundation, Executive Report, Vol. 2, No. 3 (June

1995).

6

Benchmarking is the continuous process of measuring products, services, and practices against the toughest competitors or

those organizations recognized as industry leaders.

Goals, Practices, and Strategies to Consider ♦ Redefine the Role of Finance to Better Support Mission Objectives ♦ Practice 4

Key characteristics

• The percentage of resources spent on

strategic support activities is used as an

indicator of how well finance is supporting

mission objectives.

• Benchmarking and customer feedback is

used to identify performance gaps and best

practices.
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 21

Case Study

Assessing and revising the organization’s charter,

processes, products, and services enables finance to

better support business objectives

The role of Pfizer's finance organization has changed

significantly over the past several years, from an

organization focused primarily on control and

compliance, to one that is integral to making strategic

business decisions. About 6 years ago, under the

leadership of Pfizer's CEO and CFO, Pfizer's

corporate finance organization embarked on a

reengineering initiative to transform its charter,

processes, products, and services. The CEO and

CFO’s vision was to make Pfizer “ the preeminent

corporate finance organization in the industry.” At

the heart of this vision was the concept that the

finance organization should actively support the

strategic imperatives of Pfizer Inc.

Unlike many finance organizations going through

this type of transformation, Pfizer’s change effort

was not in reaction to a crisis. In fact, given the

company’s long history of profitable growth, there

seemed to be little reason to change. Pfizer’s CFO,

on the other hand, saw an opportunity to do things

more effectively and efficiently and thereby redeploy resources from transactional activities (e.g.,

closing the books, preparing tax returns, paying

invoices) to value added activities (e.g., operations,

treasury and tax planning). The finance organization,

for example, was producing too much data and not

enough information. To build a case for change,

Pfizer’s CFO initiated a benchmarking survey to

determine exactly how his organization stacked up

against the other leading finance organizations. The

results dramatized the magnitude of the opportunity.

For example, Pfizer took 7 days to close its books

versus the 3 to 4 day world-class standard. Further, it

cost Pfizer twice as much as the benchmark average

to pay an invoice. This sobering news served a vital

purpose--it created a sense of urgency surrounding

the need to change and helped the CFO rally the

organizational support needed to institute a

comprehensive reengineering initiative

To facilitate change within the finance organization,

several cross-functional process improvement teams

were established. Through comprehensive revisions

to its charter, processes, organization and systems,

Pfizer has reduced the cost associated with

transaction processing activities by up to 50 percent

in certain functions and shifted its focus to activities

that directly support Pfizer’s business objectives.

The shift in focus and resources has allowed Pfizer’s

finance organization to become a “ growth enabler”

on behalf of the company by:

• supplying the necessary resources (from

information to capital);

• providing increased opportunities to invest

(redeploy financial gains or savings on behalf of

the business);

• offering business solutions (“ how,” not “ why

not"); and

• assisting in making the right business decisions.

Goals, Practices, and Strategies to Consider ♦ Redefine the Role of Finance to Better Support Mission Objectives ♦ Practice 4
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 22

Strategies to Consider

To assess the finance organization’s current role in meeting mission objectives, agency CFOs and

senior finance executives could:

• Identify all major functions performed by the finance organization (e.g., accounts payable, payroll,

performance reporting, performance analysis) and group each function into meaningful categories

(e.g., transaction processing, control and compliance, mission support).

• Establish and monitor agency specific performance goals and measures that reflect the finance

organization’s role in meeting mission objectives (i.e., the percentage of time or resources devoted

to mission support vs. transaction processing or control and compliance activities).

• Benchmark financial management practices and processes with recognized industry leaders (e.g. the

cost of finance as a percentage of total outlays, unit cost per accounting transaction) in order to

measure performance and identify best practices.

• To the extent that operating in a federal environment affects specific benchmarks, compare

financial management practices and processes with other federal agencies to provide a context with

which to interpret benchmarking results.

• Periodically survey internal customers to obtain information related to the quality and value of the

products and services they receive and use this information to guide improvement initiatives.

Goals, Practices, and Strategies to Consider ♦ Redefine the Role of Finance to Better Support Mission Objectives ♦ Practice 4
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 23

Practice 5

Maximize the Efficiency of

Day-to-day Accounting Activities

As part of an overall strategy to reduce the cost of finance and better support business objectives,

many leading organizations have reduced the number of staff required to perform routine transaction

processing activities by eliminating or streamlining inefficient processes and/or consolidating these

activities at shared services centers. Similarly, some federal agencies are aggressively expanding their

use of Electronic Funds Transfer to include contract payments and travel payments as a means of

increasing the efficiency of their routine accounting activities.

Each of the six private sector finance organizations we visited consolidated, standardized, and

reengineered routine processes, such as accounts payable, fixed asset accounting, and payroll at shared

service centers. The primary objective for moving to shared services is to reduce operating costs.

However, other benefits included better control and standardization of processes, more cost-effective

technology deployment, and an enhanced position for continual improvement and customer service.

Although their approach varied depending on the size, culture, and industry, leading organizations

have realized the benefits of shared services by completing each of the following stages. The first

stage is consolidation and includes changing the organizational structure and gaining control over

processes. The second stage is standardization and entails changing processes, adopting a common

technology platform, and continuous improvement. The final stage is reengineering and involves

changing workflow and leveraging technology through the use of electronic commerce, data

warehousing, and document imaging.

Similar to the findings in our previous report on outsourcing the finance function,7 we found that

although outsourcing is considered an option for reducing costs and improving efficiency, none of the

leading organizations we visited were currently outsourcing any significant aspect of their finance

organizations. The primary reason for not outsourcing is due to the limited capacity of outsourcing

vendors to perform larger, more complex finance and accounting operations. However, these

organizations indicated that they are continually evaluating opportunities to reduce costs and improve

quality; therefore, as the outsourcing market evolves and the capacity and quality of outsourcing

vendors improves, outsourcing may become a more attractive alternative.

7

Financial Management: Outsourcing of Finance and Accounting Functions (GAO/AIMD/NSIAD-98-43).

Goals, Practices, and Strategies to Consider ♦ Redefine the Role of Finance to Better Support Mission Objectives ♦ Practice 5

Key characteristics

• Inefficient processes are eliminated or

streamlined.

• Transaction processing activities are

consolidated, standardized, and

reengineered at shared service centers.

• The cost and benefits of outsourcing routine

accounting activities are considered.
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 24

Case Study

Effectively implementing shared service

centers can result in reduced operating costs

and better customer support

Over the past decade, high-tech companies have

seen their gross margins shrink smaller and smaller

as a result of increased competition and the steady

introduction of newer, faster, and more advanced

technology. To remain competitive and ensure

continued growth, Hewlett Packard formed a task

force to find ways to reduce the cost of the finance

organization. At the time, the cost of finance was

2.8 percent of company revenues and accounting

transaction costs were more than two to three times

that of comparable companies. The task force

recommended that Hewlett Packard consolidate its

transaction processing activities such as accounts

payable, accounts receivable, payroll, and fixed

assets accounting from over 100 decentralized

centers into just 8 Financial Service Centers

worldwide. As a result, the number of employees

needed to process accounting transactions was

reduced by more than half--from about 2,500 to

only 1,200 employees worldwide.

By implementing the Financial Service Centers,

Hewlett Packard reduced the costs of its finance

organization from 2.8 percent of revenues in 1989

to 1.4 percent in 1994 and to less than 1.0 percent

by 1998. The company's finance costs are now in

the top quartile of comparable organizations.

However, creating a shared service center was

much more than simply centralizing activities and

cashing in on economies of scale. To achieve these

cost savings and provide innovative, cost-effective

shared business services, Hewlett Packard not only

had to consolidate its activities, but it also had to

reengineer its processes and change its

organizational structure.

At one Financial Service Center, processreengineering initiatives alone have resulted in cost

savings of $36 million since 1990. Through the use

of electronic data interchange, document imaging,

and common software platforms, the center has

maximized its use of human resources. Each month

the center's 295 employees process 165,000

invoices, 15,000 travel expense reports, 44,000

checks, 77,000 payments, and 122,000 electronic

transactions, reimbursements, and deposits. In

addition, the center performs general ledger and

fixed asset accounting and responds to customer

inquiries. As part of its overall effort to reduce

infrastructure costs, the center also redesigned its

organizational structure using a self-directed, teambased approach. Each of the four- to eight-person

teams is responsible for a number of tasks, such as

timecards, overtime, and discretionary budget

management. The benefits of a team concept

include ownership of customer problems, higher

morale, and increased creativity/problem solving.

Goals, Practices, and Strategies to Consider ♦ Redefine the Role of Finance to Better Support Mission Objectives ♦ Practice 5
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 25

Strategies to Consider

To maximize the efficiency of day-to-day accounting activities, senior executives could:

Identify high-volume processes or transactions that do not directly support the agency’s mission (lowvalue, low-risk) and evaluate opportunities for

• consolidating, standardizing, and reengineering transaction processing and other routine

accounting activities at a shared service center, initially by department and then across

departments;

• eliminating, streamlining, or reengineering costly, inefficient transaction processing and routine

accounting activities, or

• outsourcing transaction processing and routine accounting activities.

Goals, Practices, and Strategies to Consider ♦ Redefine the Role of Finance to Better Support Mission Objectives ♦ Practice 5
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 26

Practice 6

Organize Finance to Add Value

According to a recent survey of federal CFOs,8the federal finance organization of the future will have

fewer people, with a greater percentage of analysts than clerks. Currently, however, most functions

within finance organizations are focused primarily on (1) establishing and administering policy,

(2) tracking, monitoring, and reconciling account balances, or (3) ensuring compliance with laws and

regulations. While they recognize the need for change, according to the CFOs surveyed, many

questions remain unanswered regarding how best to scope, define, and organize finance office

responsibilities.

When it comes to organizational design, we found that leading finance organizations often had the

same or similar core functions (i.e., budgeting, treasury management, general accounting, payroll).

However, the way these functions were organized varied depending on individual entity needs. In

practice 5 of this guide, we discussed how leading organizations reduced the number of resources

required to perform financial management activities by (1) consolidating activities at a shared service

center and (2) eliminating or streamlining duplicative or inefficient processes. Their goal was not only

to reduce the cost of finance but also to organize finance to add value by reallocating finance resources

to more productive strategic support activities.

To accomplish this, leading finance organizations have realigned their mission and organizational

structure to better support the entity's business objectives. Specifically, many leading organizations

have (1) organized around core business processes to simplify work and flatten hierarchies,

(2) consolidated certain transaction processing activities to gain economies of scale, and (3) moved

functions, such as cost accounting and financial analysis, to the business units to support business

units’ strategic planning and decision-making needs. In addition, these organizations have created a

coherent human capital strategy--that is, a framework of human capital policies, programs, and

practices specifically designed to steer the organization toward its shared vision--and integrated this

strategy with the organization’s overall strategic planning. (See practices 10 and 11 for information on

attracting, retaining, and developing financial professionals.)

8

CFO Survey: Preparing for Tomorrow’s Way of Doing Business, Grant Thornton LLP and the Association of

Government Accountants (Alexandria, Virginia: March 1998).

Key characteristics

• The finance organization's mission supports

the entity’s business objectives.

• The organizational structure and human

capital strategies support strategic business

unit needs as well as traditional

controllership and transaction processing

needs.

Goals, Practices, and Strategies to Consider ♦ Redefine the Role of Finance to Better Support Mission Objectives ♦ Practice 5
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 27

Case Study

Reallocating resources allows finance to better

support business unit’s strategic needs

In 1997, Chase Manhattan Bank decided to examine

its staff functions following the completion of two

mega-mergers; Chemical and Manufacturers Hanover

in 1991 and Chase and Chemical in 1996. The

objective was to determine whether the inherited

structures from the predecessor organizations had

been combined and adapted in a way that best

supported the needs of what was in effect a new

organization. Chase wanted to quickly identify and

act on any opportunities to simplify structures,

enhance efficiencies and reduce expenses. By doing

this, Chase hoped to realize its ultimate goal of

making the support function as responsive as possible

to the line units it served.

To achieve this objective, the chairman created the

Business Effectiveness Program (BEP). It was clear

from the beginning what the program would not be--

it would not be months and months of study and

analysis. Senior management was involved and

committed to short deadlines--deadlines that were

announced publicly on a regular basis. The goal was

to eliminate the things that frustrated people most

about their work. Typically, these are the same

things that make it inefficient and costly. According

to one vice chairman, "It's difficult to get people

excited when the goal of process or organizational

improvement is cost savings. But, tell them that you

are going to make their jobs less frustrating, and

watch how motivated they become."

BEP was organized into three groups. The first

group, with representatives from both finance and the

bank businesses, was charged with diagnosing the

problem. This group was to determine what Chase

does well and what could be improved--and given

only 5 weeks to complete the task. The second group

was charged with determining how much Chase spent

on its finance and other staff functions. The third

group was responsible for identifying best practices

used by other leading organizations. As part of this

effort, they met a number of leading nonfinancial

services companies to determine how they organized

their various support functions.

After completing its work, the BEP staff proposed a

solution, which involved creating Chase Business

Services--a shared services center to consolidate

transaction processing activities, reduce staff costs,

and improve efficiency. In addition, many support

functions were streamlined and brought closer to the

business areas to enhance efficiency and

responsiveness.

Goals, Practices, and Strategies to Consider ♦ Redefine the Role of Finance to Better Support Mission Objectives ♦ Practice 6
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 28

Strategies to Consider

To organize finance to add value, senior executives could:

• Define the finance organization’s mission, vision for the future, core values, goals, and strategies to

support the agency’s overall mission objectives.

• Develop an explicit workforce planning strategy that is linked to the agency’s strategic and program

planning efforts to ensure that financial managers and staff with skills for analyzing and

interpreting financial data will support the agency’s strategic planning and decision-making needs

at both the field and headquarters level. (See practices 10 & 11 for information on attracting,

retaining, and developing financial professionals).

Goals, Practices, and Strategies to Consider ♦ Redefine the Role of Finance to Better Support Mission Objectives ♦ Practice 6
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 29

Provide Meaningful Information to Decisionmakers

Financial information is meaningful when it is useful, relevant, timely, and reliable. However, many

federal agencies lack the systems and processes required to produce meaningful financial information

needed for management decision-making. For example, many agency financial and management

information systems do not routinely provide adequate, timely cost or performance information needed

to manage cost, measure performance, make program funding decisions, and analyze outsourcing or

privatization options. Similarly, many private sector and state organizations have struggled to

overcome some of the same management information issues that now face federal agencies.

Over the past decade, global competition and advances in information technology have changed

information requirements and users' expectations regarding the availability and usefulness of financial

information. Financial information that, in the past, was considered adequate for decision-making is

now considered overaggregated and too late to be useful. The leading finance organizations we visited

enhanced their capabilities for providing meaningful information to decisionmakers by developing

management information systems that support the partnership between finance and operations,

reengineering processes in conjunction with implementing new technology, and translating financial

data into meaningful information.

Success

factors

Goals

Practices

Vision: To be a Value-Creating, Customer-Focused Partner in Business Results

Build a

team

that

delivers

results.

Provide

meaningful

information

to decisionmakers.

Redefine the

role of

finance.

Make financial

management

an entitywide

priority.

.

7. Develop

systems that

support the

partnership

between

finance and

operations.

8. Reengineer

processes in

conjunction

with new

technology.

9. Translate

financial data

into meaningful information.

1. Build a

foundation of

control and

accountability.

2. Provide clear

strong executive

leadership.

3. Use training to

change the

culture and

engage line

managers.

4. Assess the

finance

organization’s

current role in

meeting

mission

objectives.

6. Organize

finance to

add value.

the efficiency

of day-to-day

5. Maximize

accounting

activities.

•Organization

•Customer

•Technology

•Process

•People •Leadership

•Culture

11. Build a

finance

organization

that attracts

and retains

talent.

10. Develop a

finance team

with the right

mix of skills

and

competencies
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 30

Practice 7

Develop Systems That Support

the Partnership Between

Finance and Operations

As federal agencies develop plans for acquiring and installing financial systems, the Clinger-Cohen

Act of 1996 and related executive branch guidance will provide a framework for designing and

deploying information technology. The Clinger-Cohen Act requires agencies to better link their

information technology planning and investment decisions to program missions and goals. If

implemented effectively, this legislation will provide a foundation that will help federal agencies

improve the interoperability of financial, operating, and management systems.

The leading finance organizations we visited have long had general ledger systems capable of

generating auditable financial statements efficiently and routinely, thereby providing information on

stewardship and accountability at a high level. Further, they historically have had adequate systems

for measuring and managing cost and performance. However, over the last decade new technology

has made it possible for these organizations to integrate these systems and provide more relevant,

accessible information that meets the changing needs of decisionmakers. Many leading organizations

have already implemented, or are in the process of implementing an enterprisewide system to integrate

financial and operating data to support both management decision-making and external reporting

requirements. Some abandoned their legacy systems all together and turned to state-of-the-art

integrated architectures, while others used well-functioning legacy systems and tied them together with

a data warehouse. Regardless of the approach, these systems provided financial analysts, accountants,

and business unit managers access to the same cost, performance, and profitability information.

Similarly, the CFO Council, JFMIP, OMB, Treasury, and individual agencies are working to improve

the integration of budget, accounting, and program information and systems. To support this process,

a Program Management Office was recently established to develop financial systems requirements,

address system integration issues, and generally facilitate the system selection and procurement

process. This and other measures are important to ensure that federal systems provide meaningful

information for managing and measuring cost and performance as well as preparing external financial

reports.

Key characteristics

• The general ledger system is integrated into

business processes and is adequate for financial

reporting and control.

• Automated system(s) are designed and deployed

that (1) accurately measure the costs of activities,

processes, products, and services and (2) provide

line managers with timely, accurate financial and

nonfinancial information on the quality and

efficiency of business processes and performance

• An enterprisewide system integrates operating,

financial, and management information and allows

decisionmakers to access relevant information

easily and perform ad-hoc data analysis.

Goals, Practices, and Strategies to Consider ♦ Provide Meaningful Information to Decisionmakers ♦ Practice 7
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 31

Case Study

Information data warehouse provides decisionmakers

with a single set of financial and performance information

In 1994, the Massachusetts Office of the State

Comptroller embarked on a groundbreaking

project--to build an information warehouse that

would integrate fiscal, budgetary, human resource,

and program data, and to make the data available to

decisionmakers throughout the state. However,

what made this project possible actually began 7

years earlier when the state implemented its first

statewide management accounting and reporting

system. Although data entry is decentralized at

agencies across the state, all processing for

accounting and financial reporting is done centrally

using one chart of accounts on a mainframe

computer.

The state's accounting system houses a wealth of

data, but as with many mainframe-centered

applications, data access is a problem. As fast as

reports are designed and built, data needs change

and users are left with only half the data they

require. Trend analysis was difficult at best and

state financial managers were forced to make

decisions using out-of-date, estimated, or anecdotal

information. To complicate matters, the state also

had a long history of dueling systems--budget

numbers were maintained in one system and

accounting numbers in another. The business case

for better information access was clear and, in

1994, funding was received to build information

access improvements.

The technical and business managers had four

primary goals in mind when designing the

warehouse: (1) make it useful by putting the right

data into it, (2) make it usable so that

decision-makers could and would use it, (3) make it

expandable so that it could be adapted to future

needs, and (4) make it sensible--don't buy a

Cadillac when a Chevette is what you need. During

the design, development, and implementation of the

warehouse, many organizational and technical

issues were hotly debated, but the most critical

design decision related to the level of detail to be

stored in the warehouse. The greater the detail, the

more flexible and accurate the report will be.

However, storage, processing, and maintenance

costs become significantly greater. The team

ultimately opted for transaction-level detail, thereby

providing enormous flexibility in meeting changing

users' needs.

The information warehouse project has resulted in

numerous benefits to a wide range of executives,

legislators, managers, financial analysts, budget

analysts, accountants, and operations personnel.

For example, managers can now project spending

rates, based on previous experience, and determine

if a department will overrun its allocations in time

to take corrective measures. For the first time, the

state has one set of books with one set of universal

data. With the warehouse, users spend much less

time explaining why numbers from one department

are different from another department and more

time developing solutions to business problems.

Goals, Practices, and Strategies to Consider ♦ Provide Meaningful Information to Decisionmakers ♦ Practice 7
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 32

Strategies to Consider

To develop systems that support the partnership between finance and operations senior executives

could:

• Acquire and install a general ledger system adequate for external financial reporting purposes.

• Develop managerially relevant cost information systems and strategic performance management

systems that access data from financial transaction systems and relevant operating systems.

• Integrate the agency's financial (including budgetary), operating, and management systems and

equip decisionmakers with the tools to easily access relevant information and perform ad-hoc

analyses.

• Ensure that financial systems comply with federal financial management systems requirements,

federal accounting standards, and the U.S. Government Standard General Ledger by

• establishing the goal of using a single general ledger chart of accounts (the U.S. Government

Standard General Ledger) and

• developing an interim approach to convert general ledger accounts not consistent with the U.S.

Government Standard General Ledger. This approach should use automated cross-walks

performed by those business segments responsible for the data.

Goals, Practices, and Strategies to Consider ♦ Provide Meaningful Information to Decisionmakers ♦ Practice 7
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 33

Practice 8

Reengineer Processes

in Conjunction With

Implementing New Technology

At many of the leading finance organizations we visited, the vast majority of financial applications

were commercial off-the-shelf (COTS) packages that were implemented with limited modification to

the basic application package itself. The advantages of using COTS software include (1) COTS

software is less costly than developing in-house applications, (2) software upgrades are affordable and

are regularly available, and (3) COTS software is designed to include best practices.

The key to successfully implementing COTS systems and best practice processes, according to leading

finance organizations, is reengineering business processes to fit the new software applications. In

fact, productivity gains typically result from more efficient processes, not from simply automating old

ones. Effectively reengineering business processes, however, requires moving from a functional-based

organization to a process-based organization. For example, the procurement process in a processbased federal organization would start when a solicitation is issued, continue through contract award

and signature, as well as the issuance of purchase/work orders and receipt of goods, and end when the

vendor properly received payment. The business processes would be designed to maximize the

efficiency and accuracy of the entire process.

The Clinger-Cohen Act contains provisions requiring federal agencies to modernize inefficient

administrative and mission-related work processes before making significant technology investments

to support them. As a result, federal agencies are beginning to consider the merits of information

technology approaches that involve reengineering business processes in conjunction with

implementing COTS software without significant modification. According to a report by the Financial

Systems Committee of the CFO Council, most agencies favor an approach that uses COTS software

for core financial systems and other financial management applications. However, agency efforts to

use COTS products have been hampered by the government’s failure to communicate requirements

and functionality effectively to the vendors and a proclivity on the part of agencies to modify software

to meet existing business processes and to replicate previous system functionality. To encourage the

use of COTS, OMB and JFMIP are working to improve (1) the testing and certification of COTS

systems, (2) existing procurement schedules, and (3) processes to obtain COTS systems.

Key characteristics

• Commercial off-the-shelf software packages

implemented with limited modification.

• Processes and controls adapted to fit

commercial off-the-shelf software.

• Processes are reengineered across

functional lines.

Goals, Practices, and Strategies to Consider ♦ Provide Meaningful Information to Decisionmakers ♦ Practice 8
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 34

Case Study

Reengineering core business processes across functional

lines is the key to successful COTS implementation

When implementing its new financial management

system rather than fitting new technology to out-ofdate processes, Owens Corning redesigned its

business processes to fit the new technology. The

objective was to improve customer service and, at

the same time, cut logistical costs related to various

business processes. To achieve these objectives

Owens Corning formed cross-functional process

improvement teams for each major business process

to improve or replace long-standing and often

ineffective business processes.

During this effort, the improvement teams used

many common reengineering tools, such as process

mapping and process modeling. However,

successfully reengineering its business processes

had more to do with the parameters Owens Corning

placed on its process improvement teams. For

example, the teams were given compressed

schedules for completing “ as is” modeling to

prevent over-analysis and to force decisions.

Documenting current processes should be

accomplished in a matter of a week or two. The

bulk of time should be spent on defining user

requirements and designing new processes.

Another important aspect of Owens Corning

process improvement effort was its use of a process

reengineering management council. The council

was made up of key process and business unit

executives that acted as arbitrators when conflicts

developed.

By reengineering business processes in conjunction

with implementing new technology, Owens

Corning increased its ability to meet customer

needs. In the past, for example, many of the

company's computers were not linked, making it

impossible for sales people to check on the

availability of products or address problems on a

customer invoice. Now, all activities that occur

from the time a customer places an order to the time

Owens Corning receives payment are part of the

Customer Fulfillment Process. In addition, new

technology has integrated functions related to the

Customer Fulfillment Process, such as sales,

ordering, production, shipping, billing, and

accounts receivable, providing users with greater

access to data. As a result, Owens Corning's

salesforce not only has access to up-to-date

information, but more efficient processes allow

sales staff to respond immediately to customer

inquiries, instead of handing the problem off to

another department.

Other outcomes related to process improvement

included (1) reducing the time it takes to close the

books from 13 days to 5 days--with a target of 1

day, (2) reducing the chart of accounts from 2,400

to 900, and (3) standardizing reporting, which

allows comparisons to be made between operating

divisions.

Goals, Practices, and Strategies to Consider ♦ Provide Meaningful Information to Decisionmakers ♦ Practice 8
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 35

Strategies to Consider

To reengineer processes that support new technology, senior executives could:

• Form cross-functional teams to (1) examine existing core business processes and (2) define user

requirements.

• Compare COTS products against the agency’s requirements and identify the COTS packages that

most closely match the agency’s needs.

• Reevaluate user requirements not supported by COTS software and determine, before customizing

software, whether each requirement is still valid or whether alternatives exist that may be more

cost-effective.

• Where software modifications are required, implement an effective configuration management

system that includes (1) clearly defining and assessing the effects of modifications on future

product upgrades before the modification is approved, (2) clearly documenting software products

that are placed under configuration management, and (3) maintaining the integrity and traceability

of the configuration throughout the system life cycle.

• Implement a quality assurance process that ensures that project activities and software products

adhere to management’s established plans, standards, and procedures. This includes ensuring that

the configuration management process is effectively implemented and that product changes are

clearly documented and tested before being placed into production.

• Implement an effective risk management strategy to ensure that project risks, such as customization

and vendor’s ability to deliver a given system, are adequately identified and effective mitigation

strategies are implemented.

Goals, Practices, and Strategies to Consider ♦ Provide Meaningful Information to Decisionmakers ♦ Practice 8
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 36

Practice 9

Translate Financial Data

into Meaningful Information

While new technology has made financial data more available, without the ability to translate that data

into relevant, understandable information, decisionmakers are left powerless. Traditionally, finance

organizations have used voluminous paper reports, based primarily on the prior month's activity, to

communicate financial information. Further, management reports were often designed around current

organizational structures. Consequently, as organizational structures changed over time, many

management reports became irrelevant.

Today, leading finance organizations have eliminated, reduced, and/or redesigned much of their old

management reporting formats to better meet the needs of the user. These organizations have designed

new reporting formats around key business drivers rather than organizational structures to provide

executives and managers with relevant, forward-looking information on business unit performance.

During this process, one company we visited actually stopped distributing selected management

reports to determine whether anyone would miss them. They used the subsequent lack of reaction as

an indicator that the information in the report was no longer relevant.

Further, standardized reports are designed to present information that is analyzed to bring out pertinent

and fundamental points with suitable amounts of detail and explanation. For example, Owens

Corning's executives and managers access a standardized monthly financial report via the company's

internal area network. The report's executive summary is 10 pages long and contains executive-level

reporting, forecasting, and budgeting information. However, multiple levels of detail are available,

and decisionmakers can drill down to the desired level of detail.

Similarly, efforts are currently underway across government to develop a meaningful, user-friendly

accountability report on individual departments and agencies. These reports consolidate and integrate

audited financial statements and reporting under the Results Act and other related laws to (1) show the

degree to which an agency met its goals and at what cost and (2) aid the reader in determining whether

the agency was well run.

Key characteristics

• Reports are designed around key drivers

such as markets, products, and customers.

• Relevant financial information is presented

in an understandable, simple format with

suitable amounts of detail and explanation.

Goals, Practices, and Strategies to Consider ♦ Provide Meaningful Information to Decisionmakers ♦ Practice 9
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 37

Case Study

Redesigning management reports around key

business drivers provides decisionmakers with

relevant, forward-looking information

As part of an overall initiative to better address the

strategic imperatives of Pfizer Inc, the CFO

spearheaded an effort that radically changed the

company’s traditional management reporting

process. At that time, the finance organization

prepared a monthly report called the “ Greenbook.”

The report was very detailed, comprised of static

reports and schedules entirely based on what “ had

happened” and contained no external or

competitive perspectives. Although intended as a

senior management briefing document, the report

was voluminous and very accounting oriented.

In the interest of providing a more customerfocused document, a prototype was developed

based on the Pfizer CEO’s management style and

preferences. The new report, known as the

“ Executive Financial Summary” , is a 30-page

report that contains a wide array of financial and

operational information. Instead of containing an

inventory of every data set and answer to every

question previously asked, the document features

“ exceptions” or those items specifically worthy of

focus. In addition, information is presented in the

form of charts and graphs. This approach enhances

the document’s readability, increases the impact of

the message, and is sensitive to the demands on the

audience’s time. Actual financial performance is

supplemented with forecasts so as to provide a

perspective of what has happened with a view of

what is expected to happen. The report also

contains “ peer comparisons,” or a benchmarking

section that compares Pfizer’s key measurements to

other companies in the industry. For example, the

report shows a graphic analysis of research and

development cost; operating cost; sales, general and

administrative cost; and product cost as a

percentage of revenue compared with other major

pharmaceutical firms. An external perspective is

vital to putting performance in a relevant context.

The same operating results can be substandard or

outstanding depending on the relevant industry

benchmarks. In general, the chairman’s overall

visions, as well as the key objectives of the business

units now drive the measurement and reporting of

performance.

Goals, Practices, and Strategies to Consider ♦ Provide Meaningful Information to Decisionmakers ♦ Practice 9
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 38

Strategies to Consider

To improve management reporting of financial information, senior finance executives, as part of the

top management team, could:

• Meet with key policymakers and managers on an ongoing basis to define key business drivers and

determine what key business information is needed for management and oversight of the agency’s

mission and objectives.

• Determine what information is needed by program executives and managers to meet and support

key business information requirements.

• Present various reporting format and content options to executives, managers, and Congressional

Committees.

Goals, Practices, and Strategies to Consider ♦ Provide Meaningful Information to Decisionmakers ♦ Practice 9
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 39

Build a Finance Team That Delivers Results

As the finance function has evolved over the past decade, from a paper-driven, labor intensive, clerical

role to a more consultative role as advisor, analyst, and business partner, many leading finance

organizations have seen a corresponding shift in the mix of skills and competencies required to

perform this new role. To respond to these changing business needs, the leading organizations we

visited developed finance teams with the right mix of skills and competencies and built finance

organizations that attract and retain talent as part of an overall strategic approach to human capital

planning.

Similarly, the CFO Act, GMRA, and GPRA have placed new demands on federal finance

organizations. Accordingly, federal agencies need to reassess their human capital practices to ensure

that federal financial professionals are equipped to meet these new challenges and support their

agencies’ mission and goals. This executive guide, along with our 1998 report on the training and

qualifications of key financial management personnel and our 1999 human capital self-assessment

checklist,9 can provide a framework to strengthen the qualifications, skills, and competencies of federal

financial management personnel.10

9 Human Capital: A Self-Assessment Checklist for Agency Leaders (GAO/GGD-99-179, September 1999).

10 Financial Management: Profile of Financial Personnel in Large Private Sector Corporations and State Governments

(GAO/AIMD-98-34, January 1998).

Success

factors

Goals

Practices

Vision: To be a Value-Creating, Customer-Focused Partner in Business Results

Build a

team

that

delivers

results.

Provide

meaningful

information to

decisionmakers.

Redefine the

role of

finance.

Make financial

management

an entitywide

priority.

.

7. Develop

systems that

support the

partnership

between

finance and

operations.

8. Reengineer

processes in

conjunction

with new

technology.

9. Translate

financial data

into meaningful information.

1. Build a

foundation of

control and

accountability.

2. Provide clear

strong executive

leadership.

3. Use training to

change the

culture and

engage line

managers.

4. Assess the

finance

organization’s

current role in

meeting

mission

objectives.

6. Organize

finance to

add value.

5. Maximize

the efficiency

of day-to-day

accounting

activities.

•Organization

•Customer

•Technology

•Process •People •Leadership

•Culture

11. Build a

finance

organization

that attracts

and retains

talent.

10. Develop a

finance team

with the right

mix of skills

and

competencies
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 40

Practice 10

Develop a Finance Team with the Right

Mix of Skills and Competencies

At leading finance organizations, developing a finance team with the right mix of skills and

competencies starts by defining a set of skills and competencies that will enable the finance team to

meet the current and future technical, management, and leadership needs of the business. The

resulting competency profile is used to assess gaps in individual or group competency levels and

develop human capital strategies to address current or expected future deficiencies. In this practice we

discuss the training, career development, and succession-planning strategies leading finance

organizations use to develop a team with the right mix of skills and competencies.

The training and career development programs of the leading finance organizations we visited

provided intensive 2- to 3-year entry level programs as well as midcareer and executive-level

programs that used both classroom instruction and rotational assignments to develop technical,

management, and leadership skills and competencies. The programs' course work focuses initially on

the tools and techniques of advanced accounting and finance as well as general business skills. Then,

the focus shifts to the strategic application of these tools within business-specific environments.

However, the key to implementing a successful career development program is to complement course

work with real-life business experience through the use of planned rotational assignments. The

leading finance organizations we visited provided opportunities for staff to rotate through various

positions throughout the finance organization as well as the operating divisions. Such opportunities

are critical not only in developing employees that understand the whole business and, in turn, provide

greater value to their customers in the operating divisions but also as a way of ensuring that an

adequate supply of well-prepared financial professionals is available to fill key positions.

Similarly, federal finance organizations are recognizing the need to provide a broad range of

experience to its financial professionals. For example, as a way to develop a cadre of experienced and

diverse leaders, the CFO Council Fellows Program was initiated in April of 1998 with the selection of

nine fellows to serve 1-year appointments at host organizations.

Goals, Practices, and Strategies to Consider ♦ Build a Finance Team That Delivers Results ♦ Practice 10

Key characteristics

• A defined set of technical, management,

and leadership skills and competencies is

developed as part of the entity’s overall

approach to strategic human-capital

planning and is used as a foundation for all

human-capital management activities and

decisions.

• Training and career development programs

use both classroom instruction and

rotational assignments.

• Opportunities to "learn the business" are

provided.
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 41

Case Study

Defining finance skills and competencies as part

of an entitywide approach to human-capital planning

enables finance to better support business objectives

As part of Pfizer’s strategy to become the preeminent

finance organization in the industry, Corporate Finance

formed a leadership and career development team to

redesign and enhance the finance organization’s

employee development practices. The team was charged

with identifying and developing competencies that

would be the foundation for all human resource

management activities and decisions, including

recruitment, succession planning, training, rewards and

recognition, and staff reductions. The team defined the

knowledge, skills, abilities, and behaviors for success

and grouped the competencies into three main areas:

leadership, management, and functional/ technical.

Within each group they identified specific competency

categories, as shown below.

LEADERSHIP

•Strategy

•Negotiation/influence

•Team building

• Innovation

MANAGEMENT

•Planning/priority setting

•Analytical

•Manage/develop people

•Communication

FUNCTIONAL/TECHNICAL

•Business policies and procedures

•Financial reporting

•Accounting principles

•Business alliances

•Operational/financial analysis

•Financial instruments

•Macro-economics

• Information technology

•Tax environment

Specific competency requirements and the level of

expertise required varies depending on the position held

within finance. For example, leadership and

management skills were emphasized at all levels, not

just within the ranks of managers and executives.

Financial professionals at all levels are expected to be

innovative and proactive in providing solutions to

business problems. However, the scope and

importance of this competency increases as you rise

in the organization. To illustrate: Innovation refers to

the ability to improve performance by doing new

things and coming up with creative ideas. The

corporate controller demonstrates this ability by

creating a climate that proactively approaches change

and emphasizes the need for continual skill

enhancement and learning. A staff accountant, on the

other hand, might demonstrate this ability by

challenging the status quo as it relates to

consolidation processing, procedures, and other

routine responsibilities.

At Pfizer, management and staff are jointly

responsible for an individual’s career development.

This means providing and seeking appropriate

training and experience to ensure that competency

requirements are achieved. While classroom training

can often address technical and functional

requirements, experience is generally required to

attain many of the leadership and management

competencies needed. Therefore, to accommodate

employee development and business needs, an

integral part of Pfizer’s staff planning and

development processes involves planned movement

of people. Rotations, including short-term

assignments within and outside of Corporate Finance

are a part of Pfizer’s culture. To aid this process, the

leadership and career development team produced the

Career Track Chart that illustrates possible career

moves within Corporate Finance. The chart includes

positions and developmental assignments that move

individuals both vertically and horizontally to

develop both breadth and depth in their careers.

Goals, Practices, and Strategies to Consider ♦ Build a Finance Team That Delivers Results ♦ Practice 10
42 GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-Class Financial Management

Strategies to Consider

To develop a team with the right mix of skills and competencies, senior executives could:

• As a part of an agencywide strategic approach to human capital planning

(1) determine the leadership, management, and functional/technical competencies required for the

finance organization to support agency missions, goals, and objectives, (2) evaluate the finance

organization’s current and future human capital capabilities, (3) identify skill gaps, (4) develop

human capital policies and practices that will allow agencies to fill the identified skill gaps, and

(5) evaluate these efforts and use performance data to continually update human capital strategies.

• As a first step, assess the finance organization’s human capital policies, programs and

practices to determine whether they support the organization’s mission and vision for the

future. (See GAO’s human capital self-assessment checklist.11)

• Using both classroom training, planned staff rotations, and interagency assignments, design a career

development program geared toward

• improving leadership, management, and traditional financial management competencies,

including the analytical skills needed to support program decisionmaking;

• understanding how reform legislation (e.g., CFO Act, GMRA, FFMIA, GPRA) will affect

the finance organization’s roles, responsibilities, and processes within the context of

specific agency operations; and

• understanding overall agency operations, including program implications of financial

decisions.

• Establish continuing professional education requirements for financial managers similar to those

required for auditors.

11 Human Capital: A Self Assessment Checklist for Agency Leaders (GAO/GGD-99-179, September 1999).

Goals, Practices, and Strategies to Consider ♦ Build a Finance Team That Delivers Results ♦ Practice 10
43 GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-Class Financial Management

Practice 11

Build a Finance Organization

that Attracts and Retains Talent

As discussed in practice 10, sound training and career development strategies are needed for the

finance organization to meet the current and future human capital needs of the business. Equally

important, however, are recruitment, retention, and reward strategies that enable the finance

organization to attract and retain talented financial professionals at all levels. Although their styles

and strategies varied, the leading organizations we visited agreed that several key factors were

important in attracting and retaining talent.

First, recruiting a talented workforce requires the commitment of top leadership. The CFOs at these

organizations are often heavily involved talent assessment and senior executive leaders are actively

involved in on-campus recruiting. This sends a powerful message to potential new recruits that the

position is important enough to the organization that it warrants senior executive attention.

Second, attracting and ultimately keeping a highly qualified and motivated workforce involves

providing meaningful career opportunities, such as the opportunity to

(1) participate in exciting ground-breaking projects, (2) build a portfolio of new skills, and (3) choose

a variety of career paths. These organizations often used their staff development programs to provide

these opportunities. For example, as discussed in practice 10, career development programs often

include rotational assignments and not only provide excellent growth opportunities but also expose

staff to a variety of career path opportunities.

Third, compensation is a key factor in any career decision. While, according to employee

compensation surveys, compensation is fairly comparable between the private and public sectors for

entry level and middle management positions, executive compensation in the private sector far exceeds

that of federal executives, thereby limiting federal agencies' ability to attract and retain federal

executives. (See appendix IV for compensation survey results.) However, other factors such as the

desire to effect change and make a difference may attract senior executives to public service. In

addition, opportunities may exist that will enhance agencies’ ability to attract and retain talent at all

levels. For example, the revolutionary changes that are taking place as a result of the CFO and Results

Acts provide an ideal occasion to revamp the opportunities available to federal financial professionals

and to market the possibilities offered by a career in federal financial management.

Key characteristics

• Top financial leadership participates in the

recruitment of new talent.

• A variety of clear career path opportunities

are offered and staff development programs

are used as a means of exposing staff to

different career opportunities.

• Competitive compensation and benefits

packages are available.

Goals, Practices, and Strategies to Consider ♦ Build a Finance Team That Delivers Results ♦ Practice 11
44 GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-Class Financial Management

Case Study

Providing a variety of challenging career

opportunities and experiences helps to attract

and retain talented professionals

The primary entry point into the General Electric

(GE) financial community is its Financial

Management Program (FMP). FMP is an intensive

2 to 2-1/2 year program for professional staff that

consists of on-the-job experience combined with

formal classroom training. It is designed to teach a

combination of technical, financial, and business

skills that prepare staff for financial leadership

positions. While FMP was designed to be a

training and development program for financial

managers, it has also served as a valuable tool for

attracting and retaining talented financial

professionals. By providing staff with valuable and

exciting opportunities and experiences, the program

sells itself--a financial career, kicked off with an

entry via FMP, can take staff anywhere--not just in

terms of geography, but in terms of achievement.

Typically, during the 2-1/2 year program, staff

rotate approximately every 6 months into a new

assignment, gaining experience in diverse aspects

of GE's business. Staff will rotate through general

accounting, manufacturing accounting, financial

planning and analysis, auditing, and one business

process project. Staff are placed in challenging

positions where they gain exposure to a number of

different elements of finance. Experienced

managers and FMP administrators will act as

mentors, supporting staff, connecting them with

resources, and helping them grow.

Six months prior to completion of the program staff

begin to plan their off-program placement with the

assistance of local financial managers and the

program administrator. One of the most sought

after assignments is with GE's corporate audit staff.

GE has broadened the scope of its internal audit

function and used it as a training ground for new

staff. The auditor’s role extends beyond financial

reviews to risk management, due diligence, and

business integration. Auditors also play a key role

in best practice sharing across business lines. The

Experience Financial Leadership Program (EFLP)

is another path available to select FMP graduates

and midcareer hires with 5 or more years of

business experience. EFLP is a structured program

comprising advanced financial classes and business

projects designed to supplement on-the-job

development and provide cross business exposure

and interaction with senior management. EFLP

also plays an important role in accelerating the

development and exposure of more experienced

staff who are hired from the outside.

GE recognizes the value of providing staff with

diverse opportunities and experiences throughout

their careers across business, finance organizations,

and outside the finance function. Therefore, GE's

CFO insists that the brightest people within finance

spend time outside the finance function--in

manufacturing or marketing. When they come back

they are immeasurably more valuable to finance

because they know something about the businesses.

About one-half of the employees coming out of the

FMP and EFLP programs take management

assignments in the operating areas–with the CFO's

blessing. This is a huge change from the days when

managers had one objective for their best people,

which was to hoard them. Now, finance trains a

resource that is available for the leadership of the

entire company, not just finance.

Goals, Practices, and Strategies to Consider ♦ Build a Finance Team That Delivers Results ♦ Practice 11
45 GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-Class Financial Management

Strategies to Consider

To build an organization that attracts and retains talent, the CFO and senior executives could:

• Actively work with colleges and universities to (1) market the opportunities available for financial

professionals and (2) include a federal accounting and financial management curriculum that will

not only prepare students for careers in federal accounting but will also help promote federal career

possibilities.

• Continue to work with the Office of Personnel Management to provide more flexible career paths

that provide opportunities for movement throughout the finance organization and agency program

offices.

• Utilize staff development programs and planned staff rotations to expose financial managers and

staff to a variety of career paths.

Goals, Practices, and Strategies to Consider ♦ Build a Finance Team That Delivers Results ♦ Practice 11
46 GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-Class Financial Management

Appendix I

Research Objectives, Scope, and Methodology

The objectives of our research were to (1) define and describe the characteristics of a world-class

finance organization, (2) identify the factors that are essential for finance organizations to improve their

financial management and move towards world-class standards, and (3) provide case studies which

illustrate the efforts of leading finance organizations from private sector companies and state

governments to improve their financial management and the overall performance of their organizations.

We formed an advisory group to assist with job design, our overall scope and methodology, and case

study selection as well as to critique our research findings and comment on our draft report. The

group consisted of private sector executives, state and local comptrollers, academicians, and other

experts and consultants outside the federal government. (Key contacts and project advisors are listed

in appendix VII.) We also consulted with members of various CFO Council committees and

representatives from OMB and Treasury.

To meet our research objectives, we performed an extensive literature search on the subject of

financial management best practices using commercial best practice databases, the Internet, prior

GAO reports, trade journals and magazines, federal guidelines, private sector studies, and other

resources. We synthesized and analyzed the numerous documents acquired from our literature

search and case study organizations to determine the objectives essential for organizations to

improve their financial management. Based on consultations with our advisory group and our case

study entities, we consolidated and refined the factors to those presented in this guide.

We selected six private sector companies and three state governments to serve as our case studies.

We selected the private sector companies based on (1) recognition for outstanding financial

management practices and/or successful financial reengineering efforts, (2) size and complexity

comparable to federal government agencies, and (3) discussions with members of our advisory

group. We selected the state governments based on (1) the 1995 "The State of the States" report

issued by Financial World magazine and (2) discussions with members of our advisory group and

the CFO Council. We interviewed various officials, including chief financial officers, chief

information officers, business unit executives, state executive and legislative branch officials,

treasurers, controllers, internal auditors, agency administrators, and human resource specialists. We

also reviewed various company documents, including vision statements, strategic plans, core

competencies for finance personnel, training and development guides, key financial reports,

performance metrics, and other documents related to reengineering efforts of the finance

organization.

We asked officials at the private sector companies and state governments profiled in the case studies

to verify the accuracy of the information presented on their respective organizations and

incorporated their comments as appropriate; however, we did not independently verify the accuracy

of that information. In addition, we provided a draft of this entire guide to OMB, members of the

CFO Council, and our advisory group for their review and comment.
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 47

Appendix II

Supplemental Case Study Information

The Boeing Company’s Personal Planning Guide

for Developing Business Competence (excerpt)

Performance Expectation: Include business process and financial information in decision-making

Key elements Supporting actions Rating

Importance/Personal*

Use appropriate facts

and data from company

information systems to

support accomplishment

of business plans

• Locate sources of company information

• Operate selected information systems

• Select appropriate data and information

• Make decisions based on analysis of data

• Manage information resources to ensure ready access to information

 

 

 

 

 

Make informed

decisions

• Apply company integrity, values, and ethics

• Identify key components of decisions

• Collect pertinent data

• Analyze alternatives

• Use selection criteria

• Apply wisdom, judgement, and experience

• Take action

 

 

 

 

 

 

 

Create business

forecasts

• Lead the estimating and budgeting process

• Develop schedules

• Apply target costing (should cost)

 

 

 

Apply total cost

management principles

• Monitor budgets, costs, and schedules

• Apply variance analysis

• Reallocate resources to meet objectives

• Predict management estimate at completion

• Use earned value

 

 

 

 

 

Recognize cost

structure (elements of

product cost)

• Apply unit cost practices

• Apply process cost practices

• Identify cost elements

• Use life cycle costing to identify present and future costs

• Identify components of rates

 

 

 

 

 

Apply economic and

financial principles

• Analyze cash flow needs

• Explain cost of capital

• Use discounted cashflow, present value analysis, and internal rate of return

• Explain investment management

• Explain importance of economic decisions on shareholder value

• Use financial analysis tools

• Use Boeing financial reports and statements

• Perform make/buy analysis

• Explain impact of taxes

• Explain billings and collections

 

 

 

 

 

 

 

 

 

 

Note 1: Importance Rating of the supporting action to your specific assignment (H = high, M = medium, L = low.)

Note 2: Personal Rating of your level of competence for the supporting action. Use a scale of 1 to 5 (1 = weak, 5 = strong.)
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 48

Appendix III

World-class Finance Performance Metrics

Table 1: Comparison of Performance Metrics--Average vs. World-class Companies

Performance metric Average World-class

Cost as % of revenue 1.4% 0.97%

A/P productivity per FTE 12,500 15,900

Processing locations >3 1

Systems per process 2-3 1

Budget cycle 95 days 60 days

Closing cycle 5-8 days <4 days

Source: The Hackett Group.

Table 2: Comparison of Labor Costs per Transaction--Average vs. World-class Companies

Process Measure Average World-class

Payables Invoice $3.55 $1.98

Receivables Remittance $0.36 $0.14

Travel & expense Expense report $6.05 $3.96

Payroll Paycheck $1.91 $1.39

Source: The Hackett Group.
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 49

Appendix IV

Comparison of Selected Federal Agencies & Case Study Entities

Table 1: Total Revenues/Outlays at Case Study Entities and Federal Agencies for 1998

Agency/company Total revenues/outlays (in millions)

Social Security Administration $393,311

Department of the Treasury 379,345

Department of Health and Human Services 339,535

Department of Defense 288,604

General Electric Company 100,469

Boeing Company 56,154

Department of Agriculture 52,547

Hewlett Packard Company 47,061

Office of Personnel Management 45,404

State of Texas 43,816

Department of Transportation 39,832

Department of Veteran Affairs 39,280

Commonwealth of Massachusetts 31,249

Department of Labor 30,458

Department of Education 30,009

Department of Housing and Urban Development 27,527

Commonwealth of Virginia 19,245

Chase Manhattan Corporation 18,656

Department of Energy 14,467

Pfizer Inc 13,544

Owens Corning 5,009

Department of Commerce 3,783

Federal Emergency Management Agency 3,326

National Science Foundation 3,130

Source: 1998 company annual reports, 1998 state comprehensive annual financial reports, Budget of the United States Government, Fiscal

Year 1999.
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 50

Table 2: Total Employees at Case Study Entities and Federal Agencies

Agency/company Total employees

Department of Defense 742,437

General Electric Company 276,000

Department of Veteran Affairs 242,685

Boeing Company 238,000

State of Texas 231,335

Department of the Treasury 139,794

Hewlett Packard Company 121,900

Department of Justice 117,699

Department of Agriculture 104,095

Commonwealth of Massachusetts 100,000

Commonwealth of Virginia 94,253

Chase Manhattan Corporation 69,033

Department of the Interior 68,815

Social Security Administration 66,489

Department of Transportation 64,163

Department of Health and Human Services 59,111

Pfizer Inc 49,000

Department of Commerce 34,738

Department of State 24,283

Owens Corning 22,000

National Aeronautics and Space Administration 19,816

Environmental Protection Agency 17,901

Department of Energy 16,917

Department of Labor 15,820

General Services Administration 14,323

Department of Housing and Urban Development 10,311

Federal Emergency Management Agency 4,839

Source: 1997 company annual reports, 1997 state comprehensive annual financial reports, 1997 U.S. Office of Personnel Management.

Appendix IV ♦ Comparison of Federal Agencies and Case Study Entities
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 51

Table 3: Comparison of Revenues/Outlays In Millions with CFO Compensation (Salary and Bonus) at

Selected Case Study Entities for 1997

Company Revenues/outlays CFO

salary

Bonus Total

General Electric Company $100,469,000 $1,100,000 $2,000,000 $3,100,000

Federal Agency $72,568,000

(average)

$151,800

(max.)

$151,800

(max.)

Boeing Company $56,154,000 $392,261 $137,700 $529,961

Hewlett Packard Company $47,061,000 $997,625 $147,804 $1,145,429

Chase Manhattan Corporation $18,656,000 $628,846 $1,168,750 $1,797,596

Pfizer Inc $13,544,000 Not available -- --

Owens Corning $5,009,000 $371,875 $795,000 $1,166,875

Source: 1998 company annual reports; Budget of the United States Government, Fiscal Year 1999; 1999 company proxy statements; 1998

Senior Executive Service pay schedule.

Appendix IV ♦ Comparison of Federal Agencies and Case Study Entities
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 52

Appendix V

Related Resources, Information Links, and Tools

Information Management Financial and Performance Management

Information Security Risk Assessment: Practices of Leading

Organizations (Exposure Draft) (GAO/AIMD-99-139)

Executive Guide: Leading Practices in Capital Decision-Making

(GAO/AIMD-99-32)

Executive Guide: Measuring Performance and Demonstrating

Results of Information Technology (GAO/AIMD-98-89)

Standards for Internal Control in the Federal Government

(GAO/AIMD-00-21.3.1)

Executive Guide: Information Security Management--Learning

From Leading (GAO/AIMD-98-68)

The Accounting Profession: Major Issues: Progress and Concerns

(GAO/AIMD-96-98)

Executive Guide: Improving Mission Performance Through

Strategic Information Management and Technology

(GAO/AIMD-94-115)

Executive Guide: Effectively Implementing the Government

Performance and Results Act (GAO/GGD-96-118)

Information Technology Investment Evaluation Guide: Assessing

Risks and Returns: A Guide for Evaluating Federal Agencies' IT

Investment Decision-Making (GAO/AIMD-10.1.13)

The Results Act: An Evaluator's Guide to Assessing Agency

Annual Performance Plans (GAO/GGD 10.1.20)

Information Technology Investment: Agencies Can Improve

Performance, Reduce Costs, and Minimize Risks

(GA0/AIMD-96-64)

Agencies' Strategic Plans Under GPRA: Key Questions to Facilitate

Congressional Review (GAO/GGD-10.1.16)

Framework for Federal Financial Management System Checklist:

Systems Reviewed Under the Federal Financial Management

Improvement Act of 1996 (GAO/AIMD-98-21.2.1)

Agencies' Annual Performance Plans Under the Results Act: An

Assessment Guide to Facilitate Congressional Decision-making

(GAO/GGD/AIMD-10.1.18)

Core Financial System Checklist: Systems Reviewed Under the

Federal Financial Management Improvement Act of 1996

(GAO/AIMD-21.2.2)

Program Measurement and Evaluation: Definitions and

Relationships (GAO/GGD-98-26)

Financial Management: Outsourcing of Finance and Accounting

Functions (GAO/AIMD/NSIAD-98-43)

Human Capital Management Process Improvement

Human Capital: Key Principles From Nine Private Sector

Organizations (GAO/GGD-00-28)

Reengineering Organizations: Results of a GAO Symposium

(GAO/NSIAD-95-34)

Human Capital: A Self Assessment Checklist for Agency Leaders

(GAO/GGD-99-179)

Framework for Implementation: Job Process Reengineering

(GAO/OIMC-95-8)

Transforming the Civil Service: Building the Workforce of the

Future: Results of a GAO-Sponsored Symposium

(GAO/GGD-96-35)

Privatization: Lessons Learned by State and Local Governments

(GAO/GGD-97-48)

Federal Quality Management: Strategies for Involving Employees

(GAO/GGD-95-79)

Workforce Reductions: Downsizing Strategies Used in Selected

Organizations (GAO/GGD-95-54)

Video Teletraining: A Guide to Design, Development, and Use

(GAO/TI-95-1)

Business Process Reengineering Assessment Guide

(GAO/AIMD-10.1.15)

Organizational Culture: Techniques Companies Use to Perpetuate

or Change Beliefs and Values (GAO/NSIAD-92-105)

Best Practices Methodology: A New Approach for Improving

Government Operations (GAO/NSIAD-95-154)

Terms Related to Privatization Activities and Processes

(GAO/GGD-97-121)

Privatization: Questions State and Local Decisionmakers Used

When Considering Privatization Options

(GAO/GGD-98-87)
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 53

Accounting and Financial Management

International Federation of Accountants—www.ifac.org

IFAC is an organization of national professional accountancy organizations that represent accountants employed in public

practice, business and industry, the public sector, and education as well as some specialized groups that interface frequently

with the profession. This site provides access to publications and technical guidance related to accounting, auditing, financial

management, and information technology.

American Institute of Certified Public Accountants—www.aicpa.org

This site provides online access to accounting publications like the Journal of Accountancy and the CPA Newsletter. In

addition, “ CPA Links” provides a gateway for online users who wish to visit other accounting-related sites on the Internet.

Association of Government Accountants—www.agacgfm.org

AGA is an educational organization dedicated to the enhancement of public financial management. AGA serves the

professional interests of financial managers from local, state, and federal governments as well as public accounting firms.

Business Finance Magazine—www.businessfinancemag.com

This site maintains links to academic resources, accounting organizations, accounting and auditing resources, accounting

software, business and management resources, government resources, and other noncommercial web sites.

FinanceNet—www.financenet.gov

FinanceNet serves as a vehicle and catalyst for continual improvement and innovation, at all levels of government, by

impacting financial management resources, practices, policies, and professional standards through the electronic sharing of

best practices and dissemination of electronic information. This site provides links to other federal financial management

related sites such as the Federal Accounting Standards Advisory Board, Joint Financial Management Improvement Program,

CFO Council, and federal finance offices.

Financial Accounting Standards Board—www.fasb.org

The mission of the Financial Accounting Standards Board is to establish and improve standards of financial accounting and

reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.

Governmental Accounting Standards Board—www.gasb.org

GASB’s mission is to establish and improve standards of state and local governmental accounting and financial reporting that

will result in useful information for users of financial reports and guide and educate the public, issuers, auditors and users of

reports.

Institute of Management Accountants—www.imanet.org

The IMA is a professional organization devoted to management accounting and financial management. This site provides for

its members access to research databases, custom bibliographies, and full-text articles related to accounting and financial

management.

Rutgers Accounting Web—www.rutgers.edu/Accounting/

This site includes a database of accounting research and publications. Other accounting organizations on this site include:

Association of Government Accountants, American Accounting Association, Institute of Internal Auditors, Inc., Institute of

Management Accountants, Financial Accounting Standards Board--FASB, and Governmental Accounting Standards Board--

GASB.

Appendix V ♦ Related Resources, Information Links, and Tools
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 54

Treasury Board of Canada Secretariat—www.tbs-sct.gc.ca

This site highlights the reports and assessment guides associated with Canada’s initiative to modernize its comptrollership

function.

Auditing

AuditNet—www.auditnet.org

This site provides information links, tools, and resources developed for the benefit of the audit profession, including audit

programs, best practices, and research services.

The Institute of Internal Auditors—www.theiia.org

For IIA members who are internal auditing practitioners, executive management, boards of directors, or audit committees, this

site provides standards, guidance, and information on internal auditing best practices.

Internal Auditing World Wide Web—www.bitwise.net/iawww/index.html

This site promotes the sharing information and knowledge pertaining to the internal auditing profession across associations,

industries, and countries.

Performance Management

The Balance Scorecard Institute—www.balancedscorecard.org

The Balanced Scorecard Institute is a web clearinghouse for managers to exchange information, ideas, and lessons learned in

building strategic management systems using the balanced scorecard approach. This site provides guidance, information and

tools to government and nonprofit managers as they attempt to design and implement measurement-based management in

state, local, and federal government environments.

Hackett Benchmarking & Research—www.answerthink.com/hackett/

Hackett Benchmarking & Research maintains comprehensive, ongoing benchmarks of finance, human resources, information

technology, planning/performance measurement, procurement, customer contact centers, and shared services centers.

Information Technology

The International Institute of Business Technologies, Inc.—www.iibt.org

IIBT is a nonprofit educational and research institution for advancing the management of business technologies in the public

and private sectors in order to improve performance.

IT Governance Institute—www.itgovernance.org/itgi/

This web site is designed enhance the vital link between IT and enterprise governance by offering information and resources

for efficiently and effectively deploying secure, reliable information and applied technology, and providing best practice

guidance on the management of IT-related risks.

Carnegie Mellon Software Engineering Institute—www.sei.cmu.edu

The purpose of the Software Engineering Institute (SEI) is to improve the practice of software engineering.

Appendix V ♦ Related Resources, Information Links, and Tools
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 55

Appendix VI

Bibliography

Buckingham, Marcus and Coffman, Curt. First, Break all the Rules: What the World’s Greatest Managers Do

Differently, The Gallup Organization, 1999.

Camp, Robert C. Benchmarking: The Search for Industry Best Practices That Lead to Superior Performance.

ASQC Quality Press, 1989.

Conference Board, The. “ Benchmarking In the Finance Function: A Council Report,” The Conference

Board, 1994.

Cooper, Robin and Kaplan, Robert S., Cost and Effect: Using Integrated Cost Systems to Drive Profitability

and Performance, Harvard Business School Press, 1998.

Davis, Henry A. and Militello, Frederick C. “ The Empowered Organization: Redefining the Roles and

Practices of Finance.” Financial Executives Research Foundation, 1994.

Dunleavy, John, Hjelm, Elizabeth, Johansson, Henry, and Walther, Thomas. Reinventing the CFO: Moving

From Financial Management to Strategic Management. Coopers & Lybrand, 1997.

Gates, Stephen. “ The Changing Global Role of the Finance Function.” The Conference Board, 1994.

Heian, James B., Jablonsky, Stephen F., and Keating, Patrick J. “ Business Advocate or Corporate

Policeman? Assess Your Role as a Financial Executive.” Financial Executives Research Foundation, 1993.

Hackett Group, The. “ Reengineering the Finance Function.” Financial Executives Research Foundation,

1995.

McLemore, Ivy. “ The New And Improved Business Analyst.” Controller Magazine, 1998.
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 56

Appendix VII

Leading Organization Contacts and Project Advisor Acknowledgements

We would like to acknowledge the following private sector and government executives whose

advice and assistance throughout this project has been invaluable.

Key contacts at leading organizations

Bruce H. Adams

Senior Vice President, Global Services Administration

The Chase Manhattan Bank

David Devonshire

Chief Financial Officer

Ingersoll Rand Corporation

(formerly with Owens Corning)

Lynn L. Saylor

General Electric

Director-Corporate Finance

General Electric Company

Boyd E. Givan (Retired)

Chief Financial Officer

The Boeing Company

Richard L. Hoddeson

Vice President,

Operations Planning and Analysis

Pfizer Inc

Larry Lazicki

Executive Assistant-Fiscal Mgmnt. Div.

Comptroller of Public Accounts

State of Texas

William Landsidle

Comptroller

Commonwealth of Virginia

William C. Steere, Jr.

Chairman of the Board & Chief Executive Officer

Pfizer Inc

William Kilmartin

Vice President

American Management Systems, Inc.

(formerly with the Commonwealth of Massachusetts)

Project advisors

Julia Carroll

Chief Financial Officer

Naperville, Illinois

Thomas V. Fritz

President & Chief Executive Officer

Private Sector Council

Edward J. Mazur

Vice President

Virginia State University

John L. Puckett

Assistant Vice President - Information Technology

www.toysmart.com

Gerald R. Riso (deceased)

Chief Executive Officer

Riso & Riso

Cornelius E. Tierney

Professor of Accountancy

George Washington University

Patricia M. Wallington

Vice President & Chief Information Officer

Xerox Corporation
GAO/AIMD-00-134 ♦ Executive Guide: Creating Value Through World-class Financial Management 57

Appendix VIII

GAO Contacts and Staff Acknowledgements

GAO Contact

♦ Linda P. Garrison (404) 679-1902

♦ Diane G. Handley (404) 679-1986

Acknowledgements

In addition to those names above, Francine M. Delvecchio, Marshall L. Hamlett, and Elizabeth M.

Mixon made key contributions to this report.
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