The CFO Act of 1990 was enacted to address longstanding problems in financial management in the federal government. The act established CFO positions throughout the federal government and mandated that, within each of the largest federal departments and agencies, the CFO oversee all financial management activities relating to the programs and operations of the agency. Among the key responsibilities of CFOs are overseeing the recruitment, selection, and training of personnel to carry out agency financial management functions. Recognizing that a qualified workforce was fundamental to achieving the objectives of the CFO Act and other related management reform legislation aimed at improving federal financial management, the Human Resources Committee of the Chief Financial Officers Council and the Joint Financial Management Improvement Program (JFMIP) have proposed improvements addressing the recruitment, training, retention, and performance of federal financial management personnel. In November 1995, JFMIP published the Framework for Core Competencies for Financial Management Personnel in the Federal Government, designed to highlight the knowledge, skills, and abilities that accountants, budget analysts, and other financial managers in the federal government should possess or develop to perform their functions effectively in accordance with the CFO Act. JFMIP stressed the need for federal government financial managers to be well-equipped to contribute to financial management activities, such as the execution of budgets under increasingly constrained resource caps and the preparation, analysis, and interpretation of consolidated financial statements. A primary goal in this body of work is to obtain and share with DOD information on the formal education, professional work experience, training, and professional certifications of key financial managers in the department, including the Office of the Under Secretary of Defense (Comptroller), each of the military services, and the Defense Finance and Accounting Service. The objective of this assignment is to provide information on the formal education, professional work experience, training, and professional certifications of personnel serving in key financial management positions in the Navy and Marine Corps. We obtained this information from biographies and profile instruments due to the concerns of Navy officials regarding the completeness of personnel databases and personnel files. We worked with Navy officials to determine the key financial management positions to be included in this review. These positions typically included comptrollers, deputy comptrollers, and budget officers at Navy and Marine Corps major commands and installations. As agreed with the Navy, we did not verify the information contained in the profiles provided by the respondents. A more detailed discussion of our scope and methodology, including a description of how we obtained qualifications and work experience data, is in appendix I. We performed our audit work from March 1997 through January 1998 in accordance with generally accepted government auditing standards. The Assistant Secretary of the Navy (Financial Management and Comptroller) provided comments on a draft of this report. These comments are discussed in the “Agency Comments and Our Evaluation” section of this report and are reprinted in appendix VIII. Table 1 provides information on the formal education, careers, and professional certifications of the Department of the Navy’s four executives included in our review. All four held bachelor’s degrees and three also held master’s degrees. Majors associated with their bachelor’s degrees included mathematics, education, accounting, and engineering, while those associated with their master’s degrees included public financial management, business administration, operations research, and Middle East Affairs and Arabic. The Assistant Secretary had spent 27 years at DOD and 5 years in the private sector. The other three executives’ DOD careers ranged from 23 to 32 years. In addition to her years at DOD, the Principal Deputy Assistant Secretary had spent 2 years at the Social Security Administration. The Director of the Office of Financial Operations had spent 2 years in the private sector and as an adjunct professor; he had also served as a part-time instructor of graduate and undergraduate level accounting and financial management courses over a 10-year period. A review of biographical information provided to us showed that three of the executives had served in financial management-related positions during most of their DOD careers. One of the executives also held a professional certification. The Director, Office of Financial Operations was a Certified Public Accountant. In collaboration with Navy officials, we identified 306 key financial managers across the department for this review, of which 194 (or 63 percent) responded by providing information on their qualifications and experience. Respondents included the 7 managers from the Office of the Assistant Secretary of the Navy (Financial Management and Comptroller)—ASN/FM&C; 74 of 128 managers from four Navy operational commands and their 12 of 17 managers from the Chief of Naval Education and Training (CNET) and its installations; 68 of 110 managers from the Naval Sea Systems Command, Naval Air Systems Command, Naval Supply Systems Command, and Naval Facilities Engineering Command and (1) shipyards, weapon stations, aviation depots, fleet industrial supply centers, and public work centers which perform supply and maintenance support to other Navy and Marine Corps organizations on a reimbursable basis and (2) air and surface warfare centers responsible for the research, development, test, and evaluation (RDT&E) and procurement of Navy aeronautical, electronics, ship, and submarine systems; and 33 of 44 managers from Headquarters, U.S. Marine Corps and its commands and installations. The seven ASN/FM&C respondents performed roles including financial operations, financial management/accounting policy, and/or budget execution. The 187 respondents from Navy and Marine Corps major commands and installations included 71 comptrollers, 47 deputy comptrollers, 67 budget officers, and 2 working capital fund managers. About 23 percent of the 194 respondents were military officers. The 44 officers served mainly as comptrollers at major commands and installations, and the 150 civilians served most often as comptrollers and budget officers at installations. Table 2 provides a breakout of the officers and civilians by rank and grade, respectively. Over 85 percent (the 44 officers and 122 of 150 civilians) of the 194 respondents reported holding bachelor’s degrees, and 41 percent (39 officers and 41 civilians) also reported holding master’s degrees. Five of the 166 respondents holding bachelor’s degrees reported more than one major. A review of the profiles showed that 47 managers, or about 28 percent of these respondents, reported accounting majors, 73 managers reported other business-related majors, and 48 managers reported that one or more of their majors were not business related. Table 3 shows the bachelor’s degree majors reported by the 166 Navy and Marine Corps financial managers. Eight of the 80 respondents holding master’s degrees reported more than one major. A review of the profiles showed that, of these 80 managers, 6 reported accounting majors, 62 reported one or more other business-related majors, and 15 reported one or more nonbusiness-related majors. Table 4 shows the master’s degree majors reported by the 80 respondents. The key financial managers were also requested to provide information on the number of accounting-related subjects completed as part of their formal education. Of the 194 respondents, 176 had completed one or more of these subjects, as follows: 1-2 subjects: 20 (5 officers and 15 civilians), 3-5 subjects: 44 (9 officers and 35 civilians), and 6 or more subjects: 112 (28 officers and 84 civilians). Included in this latter group were 109 (or about 56 percent of the 194 respondents) who reported completing both principles of accounting and intermediate accounting, along with at least four other subjects. Based solely on a review of their formal education, these 109 managers appear to have met the requirements to serve in federal GS-510 accountantpositions. A review of the profiles showed that the 44 officers’ careers ranged from 4 to 33 years, averaging 21 years, while the 150 civilians’ careers ranged from 8 to 55 years, averaging 27 years. Both officer and civilian respondents, with a few exceptions, had spent most of their careers in DOD. Also, about 62 percent of all respondents reported that they had performed several of the financial management-related functions included in our review during their careers. Figures 1 and 2 show the average number of years of work experience by rank for the officers and by grade for the civilians, respectively. In collaboration with Navy officials, we identified five functions which are often performed by personnel serving in key financial management positions, including: financial statement preparation—preparing annual financial statements and footnotes; financial reporting/accounting policy—preparing financial reports and consulting on the application of accounting policy; financial analysis—performing tasks associated with cost accounting, business process improvements, budgeting, cash flow analysis, cost analysis, revenue and expenditure forecasting, and other analysis of financial position and operations; accounting operations—recording and reporting accounting transactions; and accounting systems development and maintenance—performing tasks associated with the functional design and maintenance of accounting and finance systems. Thirty officers and 90 civilians (or about 62 percent of the 194 respondents) reported that they had performed three or more of these functions during their careers. Figures 3 and 4 show the number of officers and civilians who had performed each function at sometime during their careers, and the average number of years of experience in each function. For example, figure 3 shows that 38 of the 44 officers had performed financial analysis-related tasks for an average of 7 years. During 1995 and 1996, about 64 percent of the officers and 88 percent of the civilians reported completing some training in one or more of the categories included in our review. Of these 160 managers (28 officers and 132 civilians) receiving training, (1) 94 percent listed general topics, such as computers, supervision, strategic planning, and communications skills, as examples of the training they had completed, (2) 61 percent reported completing some training in financial topics, and (3) about 44 percent reported completing training in accounting topics, such as accounting standards and financial reporting. Also, a review of the profiles showed that 46 managers completed only general training and 34 other managers had not completed any training. Therefore, 41 percent of the 194 respondents had not received any accounting or financial training for those 2 years.