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CFOs needed to steer ship in rough budget seas

Sep. 9, 2012 - 02:30PM   |  
By SRIKANT SASTRY   |   Comments

Agency budgets are shrinking, but not as much as they will when Congress and the president agree on steps to reduce the deficit and take us back from the fiscal cliff.

The list of savings initiatives — the Campaign to Cut Waste, reducing improper payments, strategic sourcing — is growing. Congressional oversight of agency spending is at a fever pitch.

It’s a perfect time for agency chief financial officers to lead. Unfortunately, too many CFO chairs are vacant. Congress and the president should make filling them a priority.

Grant Thornton and the Association of Government Accountants recently surveyed federal CFOs to gauge their challenges and concerns. The report, “Charting a Course through Stormy Seas”(www.government cfosurvey.com), offers a window into the turbulent environment in which this talented group of public servants is working. What we found was not surprising.

CFOs say the president’s Campaign to Cut Waste is a lot of work. Every president has a financial management agenda, and CFOs understand it’s their job to implement it. But they said that, because the Campaign to Cut Waste doesn’t strategically advance the mission of agencies, it sometimes diverts resources from potentially better uses. One CFO said, “We’ve spent more on meetings about the Campaign to Cut Waste than we’ve actually saved from cutting waste.”

CFOs nurture and protect their workforce. With staffing cuts driving up workload for remaining staff, pay freezes driving down morale and elections making employees fair game for attacks, CFOs rely on strong teams to keep everyone focused on results. One CFO said, “My guys have a clear notion of what they need to do.” Another put it this way: “We are a can-do organization that wants to make a difference.”

We ask CFOs each year to list their greatest challenges. This year, the challenge cited most often by far was the budget — increasing requirements, finding more cost savings and dealing with continuing reductions. Over half of all respondents cited the budget as their greatest challenge. Some were trying to figure out how to get more funding, while others were trying to determine how to live with less. But one CFO said, “We have to get away from the phrase ‘do more with less’; we need to choose.”

Whether they are political appointees or career civil servants, CFOs are working with their staffs to get the job done. They are taking whatever resources are available, and they are helping leadership allocate those resources to high-priority activities. No agency gets everything it wants, and the CFO plays a critical role helping the agency meet its priority goals regardless of the level of resources it receives.

To agency leaders, a talented CFO is essential. Without a strong, capable CFO, navigating the budget process — allocating resources to high-priority, high-performing activities, while managing reductions strategically — is more difficult. But today, there are few true CFOs in the top job. The 1990 CFO Act is the defining legislation for the roles and responsibilities for the federal CFO in 24 agencies. Sixteen of these agency CFOs are appointed by the president with the advice and consent of the Senate. Although the Obama administration has filled 12 of these positions, with one holdover from President Bush’s administration, only nine of the 16 Senate-confirmed CFOs remain in place today. With the massive challenges agencies face — particularly in guiding agencies through today’s unpredictable and volatile budgetary environment — we shouldn’t keep vacant the one job best suited to lead through the storm. The president should focus his personnel team’s attention on attracting and recruiting the CFO talent agencies need and work with the Senate to get them in their jobs as soon as possible. Otherwise, agencies will be sailing in increasingly rough seas without a rudder.

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Srikant Sastry, managing principal of Grant Thornton LLP’s Global Public Sector practice in Alexandria, Va., has more than 20 years’ experience consulting for agencies in federal, state, local and international governments.

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