If Congress initiated the CFO Act in 1990 and the assorted laws and regulations that followed over the next 23 years to create a governmentwide foundation, then data, risk and the need to continually be the catalyst to find efficiencies are making up the next level of the federal chief financial officers’ house.

A new online and exclusive Federal News Radio survey of federal CFOs finds this next stage is taking hold more quickly and having a bigger effect than previously imagined.

Three-quarters of the respondents say their agency uses data to make risk based decisions and more than 60 percent say the use of financial data to help them make budget, program and personnel decisions.

“We are modeling different budget formulation schedules. We have used data to create a cost allocation methodology. We are using HR data and salary data to do workforce planning,” wrote one respondent. “We are using a management suite of metrics to manage our bureaus toward goals in multiple areas such as procurement, HR, IT and cybersecurity. We are using Employee Viewpoint Survey data to understand how we can improve diversity and inclusion, and leadership.”

As part of Federal News Radio’s week-long series, the Rise of the Money People: Financial management moves front and center as agencies make final assault on wasted billions, we surveyed 88 federal CFOs, deputy CFOs and other senior financial managers over a three week period in March, and received a response rate of 17 percent. We received responses from eight cabinet level, five large agency and two small agency CFOs, deputy CFOs and senior financial managers with all but one being a career employee.

“A common theme in federal financial management over the past few years has been doing more with less. In these times of reduced budgets, agencies have had to find ways to maintain performance and achieve results while absorbing reductions in resources. However, I generally feel the state of federal financial management is improving, particularly with the addition of automated/electronic systems for data collection and payments,” one respondent wrote. “For example, through the use of electronic payment systems, my agency was able to achieve a prompt payment rate of over 95 percent in fiscal 2012, while maintaining a very low improper payment rate.”

This was the third survey of federal CFOs.

Information is power

Making better use of data is both a opportunity and a big challenge for CFOs.

About 70 percent of the respondents say they use data to make budget and personnel decisions, while about 62 percent said they use it for program decisions.

But at the same time, almost 62 percent of the CFOs and deputy CFOs say their workforces need better/more/different training to understand performance data.

The respondents were less likely to need better or different tools or didn’t need anything to better understand performance data.

“We post scorecards that demonstrate our prompt payment, undelivered orders resolution, etc., as a scorecard that uses peer pressure [to improve] organization performance,” wrote one respondent. Another respondent wrote they are using data to expose “risk areas before they turn into problem areas.”

Agencies also are finding challenges to using data, not surprisingly.

One respondent said, “Our agency’s budget structure is not as flexible as some other agencies in the ability to accommodate risk-based changes.”

Another said they “need more timely and better financial data to base decisions on.”

Working across the CXO suite

The use of data also is giving CFOs and their staffs a large path toward helping to improve the performance management of their agency. Almost 85 percent said their role is growing, while 15 percent said it’s about the same.

“We have introduced annual key performance indicators, a select subset of our existing performance measures, to gauge how our annual results contribute to our longer-term outcomes,” wrote one respondent about their growing role. “Additionally, we developed cross-cutting fundamental strategies, which set clear expectations for changing the way our agency does business in achieving results.”

Similarly, about 85 percent said their office works regularly with the programs to help make risk-based decisions. Nearly every CFO or deputy CFO said they have a “good” or “excellent” relationship with their CXO suite counterparts in technology or procurement or performance management.

All of this focus on data and performance management is helping CFOs and their staff deal better with across-the-board spending cuts under sequestration.

About three-quarters of all respondents said the impact of sequestration on their agency is significant, but 20 percent said the impact was only minor with one person saying they weren’t sure.

“Sequestration will have direct impacts on my agency’s mission related activities. For example, the budget cuts required by the sequestration could impact our ability to monitor compliance with laws and regulations, reduce our ability to assist economically disadvantaged communities with implementing projects/regulations and delay important research,” wrote one respondent.

Priority No. 1

About two-thirds of the respondents said they are dealing with a reduced budget by finding efficiencies in their agency’s processes, while almost 50 percent ranked freezing hiring as the second most popular way to make do with less.

One respondent said they also are “paring back contract tasks.” Another said, “We have merged two bureaus and have implemented more paperless transactions. We are reducing travel and training. We are reducing fleet expenses. We are reducing real estate expenses.”

It’s no surprise either that 80 percent of the respondents ranked finding efficiencies in their agencies as their highest priority. Workforce training and hiring and retaining employees received the second most votes overall.

One respondent said among their top priorities included the increased use of shared services “across a range of operational, management and technology areas. Using data to make better decisions, improving and diversifying the leadership cadre and pipeline.”

Another respondent said a top priority includes, “improving integration of budget, finance, acquisition and other business areas for transparency, [the] use of technology solutions and management.”

RELATED STORIES:

Rise of the Money People

CFOs remain tepid on financial shared services

OMB pushes CFOs to lead cost-cutting effort

Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.