CFOs not giving up budget authority to CIOs without a fight

In the almost 20 years since the Clinger-Cohen became law, the government’s reliance on hardware, software and all that comes with technology is as integral as lights, telephones and air conditioning. The government ceases to work well without these basic necessities of business.

Despite this recognition of IT’s, and even cybersecurity’s, vital role in government, the same group of executives who complained and pushed back 20 years ago against giving CIOs a seat at the table are at again.

Many federal chief financial officers are not happy with the Federal IT Acquisition Reform Act (FITARA) and the way the Office of Management and Budget is considering implementing the law.

Several sources said OMB is getting pushback on its draft guidance from several CFOs who don’t want to cede budgetary authority to CIOs.

“CFOs are worried that FITARA is taking away their providence,” said one industry expert, who requested anonymity in order to talk about the draft guidance. “CFOs are worried that having CIOs look into their tin would encroach on their prerogatives. It’s a big mistake for the CFOs to be so narrow-minded.”

This isn’t the first time CFOs have complained about giving up turf to CIOs.

Sources said during the drafting of the Clinger-Cohen Act implementation guidance back in 1995-96, CFOs released something called at the time the “CFO Manifesto.” It basically called on CIOs to answer directly to CFOs, even though Clinger-Cohen told agencies to ensure CIOs answered to the secretary of the agency.

CFOs pushed back again during the later years of the President George W. Bush administration when OMB tried to give CIOs more authorities for IT spending through a new policy. In the end, that 2009 memo ended being watered down to please the CFOs, among other constituents.

“CFOs always gave us push back,” said one former federal IT official. “They were always a tough group to work with. They view the world very black and white because for them it’s all about dollars and cents. So now what you have is the CFO always owned the budget and what you are now doing is changing that dynamic and they have to work with one of their peers, who will have input into the budget.”

While OMB drafts the implementation guidance, we do know that FITARA calls for CIOs to have a high degree of oversight of IT spending, which may include reprogramming and acquisition authorities. We also know that FITARA requires civilian cabinet and major agency CIOs to be appointed by the President, and therefore given a greater “seat at the table.”

Those two issues are the heart of the concerns that some CFOs are relating back to OMB.

One former federal CFO said the historical problem has been the unwillingness by some to give up their budget authority to anyone else.

“It can mean now CIOs are dealing directly with OMB, especially if they have to certify the annual IT budget submissions. They also are talking to congressional staffs about IT budgets,” the former CFO said. “The thing that makes your job as a CFO harder is when component agencies have direct lines to Congress, and they go around you to push their own agenda. Now they could have an IT person do that, and not the CFO or deputy secretary or secretary, which are the ones that are entrusted to make these decisions about budgets.”

Sources said even though FITARA is law, the CFOs are trying to get OMB to reduce the budgetary impact a CIO could have over the IT spending.

But the federal IT official said the budget in-and-of-itself is not the answer by far to the challenges the government faces with IT projects.

“If the CFOs were smart, they’d be looking at this specific thing and say thank goodness I have a partner now,” the former official said. “When you look at expenditures and risk, they need a partner and the savvy ones will embrace it, while the ones of traditional government hierarchy will fight it. But what CIOs really need is execution authority, which isn’t necessarily budget authority. If the budget control was a panacea, then why doesn’t the Veterans Affairs Department have a better IT shop?”

Congress gave the VA CIO oversight over all of the agency’s IT budget in 2005, and that is seen by many as the model that FITARA tried to emulate.

The former federal CFO offered similar insights from their time in government. A good relationship with the CIO is imperative and can really make both the IT and finance function much more impactful in helping the agency meet its mission.

“I can’t understand the push back,” said another former federal IT official. “This isn’t a zero sum game. If you operate collaboratively, everybody will be strengthened. The CIO’s role will not grow at expense of acquisition or finance officers. All are more influential if they are united.”

OMB continues to work on the implementation guidance. Source said it’s going through several levels of review and could be out by late April or early May.

Some said there is a growing movement to ensure that OMB Director Shaun Donovan signs off on the guidance so its importance is clear throughout the political ranks of the government.

This post is part of Jason Miller’s Inside the Reporter’s Notebook feature. Read more from this edition of Jason’s Notebook.

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