How have CFOs been faring during this uncertain time?

Agency financial staffs have to account for everything down to the penny. So how'd they do in the past year while dealing with the pandemic?

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Congress has no problem appropriating dollars by the trillion. It likes rounding off big time. But federal agency financial staffs have to account for everything down to the penny. How’d they do in the past year, the year of COVID? For results of its latest annual CFO survey, Federal Drive with Tom Temin turned to the CEO of the Association of Government Accountants, Ann Ebberts.

Interview transcript:

Tom Temin: Ms. Ebberts, good to have you back.

Ann Ebberts: Good to be here.

Tom Temin: And this is the annual Grant Thornton survey that is done with the A GA. And I guess the first question is COVID and the pandemic, did it really have an effect on what the CFOs do? Or do they just roll along and keep their accountants running?

Ann Ebberts: Well, they kept them running. In fact, they were sprinting all year round. So I would say there was a big impact on the CFO community, and AGA has members at the federal, state and local government level. So really COVID impacted all of our members at each level of government. And I’m proud to say that the financial community, again at all levels, really stepped up to this incredible challenge. First of all, as we all know, through March and April, federal relief programs came fast and furious distributing much needed funds to federal programs, businesses, state governments, individuals, private industries, all of that. And the CARES Act was just one of four pieces of legislation and under two months, but certainly the biggest one at over $2 trillion. Now it was not business as usual because at the same time, as we all know, because it impacted all of us, we started working from home. So going from having most of your staff in the office to almost everybody teleworking was an incredible personal change for staff members. And then, as we know, a lot of employees are also working parents that have kids in school. So they became teachers, as well as, employees working from home juggling lots of work, but they were incredibly resilient and continued to keep the pandemic response as a key priority.

Tom Temin: Yeah, they had that big work load from all of the appropriations and then they had that stress of the remote work. And do you get the sense whether there was a differential between the ability to keep working remotely between the federal government, which seemed to adapt fairly quickly with online means, and those accountants and financial officers at the state and local level?

Ann Ebberts: No, I think maybe the infrastructure was more robust at the federal level, but state and local governments, it’s all across the board, as far as level of sophistication in there in IT. But again, they’re all working and have been able to adapt. Some of the funding was actually applied to helping support their infrastructure, so they could keep working at the state and local level. So there’s probably not one single answer to that kind of question.

Tom Temin: Sure. And at the federal level, just give us a sense of the survey methodology, these are in person surveys, or is it a mail survey? As I recall, you do a lot of in person, in depth talking with the CFOs.

Ann Ebberts: We do. And actually, this year, we’re taking a little bit different approach to the CFO surveys. So we’re going to issue several reports throughout the year so they’re more timely and topic focused. The first report was entitled managing finances for the future and it’s the first installment in the series. And we had an arc continuing to have meetings and conducting interviews with CFOs and DCFOs. This first report was the result of a series of interviews, more than about two or three dozen CFOs and Deputy CFOs through August and September. And, again, we continue to meet with them, and frankly, we are looking forward to meeting with new financial leaders that will be entering government in support of the Biden administration.

Tom Temin: And there could be more appropriations coming if Congress agrees, and there was one at the end of the Trump administration, and we’re talking big numbers, and they tend to go through a few concentrated departments, I guess. Did they have any thoughts on the effects of all of these big spending programs, again, which may still be coming on?

Ann Ebberts: So what was really interesting and, again, I’m incredibly impressed at how agile the CFO community and frankly, the audit community too. So it’s not just the chief financial officers, but it’s also the audit community, on how they dealt with this pandemic. Couple key things that we identified in our report is agility and collaboration, and the CFOs realized this could not be business as usual. They had to coordinate, collaborate with leaders across the agency, reach across the organization, make sure they had access to data to inform decision making, smartly negotiate and adjust spending priorities. And with the data they had available, they were able to do that, but they had to continue to do things a little bit differently. The analogy one CFO said, it’s like building an airplane while flying. So you couldn’t wait until you had all your systems in line, you had to keep moving forward. And guidance also continued to evolve, so effective communication was also critically important and that was for all levels of government to make sure that people were spending the funds focused on the intent of those funds and also auditing and being careful to make sure that they were following guidance. And as I said, the guidance was coming out in pieces also. So that was tough for I think all levels of government. But the CFOs relied heavily on their internal audit staff to make sure that funding was being used appropriately, they’re adhering to guidance, they were doing everything they could to prevent fraud, waste, and abuse. They also embraced the technologies they had changed in the work remotely, they had heavy reliance on being able to telework. And I know the infrastructure in some organizations was tough and really kind of blew up a couple of times because there’s so many people leveraging the telecommunication capabilities, but they changed and adapted their systems so they could analyze the data and provide transparency to the oversight bodies, as well as to the American people. And I think one of the key things was the agencies had a requirement to produce reports and send them to Treasury in accordance with the Data Act to update And they working with Treasury closely in the agency level, they got to the point where they were feeding on a monthly and even more frequent basis in some agencies so that the pandemic response committee, the PRAC could also have access to that data so they could monitor and evaluate and seek out instances of anomalies that might be fraudulent or using funds in the wrong manner.

Tom Temin: Now you’ve got a new set of CFOs, which tend to be Senate confirmed. So as the pandemic rolls on, as the new administration rolls on, I’m guessing that it is the deputy CFOs, the career staff that are really going to have to carry the ball to keep this continuity going.

Ann Ebberts: Yes you’re right. And actually, not every cabinet level agency has an appointed CFO, some of them are career. But needless to say, there are vacancies in some organizations, and they’ve got some challenges, but they’ve stepped up. They’re being collaborative, they’re working across the C suite to make sure that the priorities are right, that they’re working with the best interests of the American people, and making sure that the funds are applied where they need to be applied with the intention of bringing the country back to normal and keeping people safe, ensuring people getting the vaccines out, etc.

Tom Temin: And when things do return to normal, if they do and people return to their offices, will there be any, do you think, residual effects or challenges once people are back in? Or will there be some maybe new ways of thinking, new ways of operating that might be permanent after the pandemic is over but the new work ways will still be there?

Ann Ebberts: That’s an interesting question because I think a couple things. When people start coming back into the office, one, the challenge will be making sure that people are safe. And again, parents juggling multiple jobs as employee and teacher, we need to be able to continue to accommodate them. But the office environment may be different. Maybe it’s an opportunity to shrink the footprints. I know being a mother of several millennials, that they’re saying, hey I don’t need to live close to town, I can live out the hinterland have a bigger house and maybe come into DC or to the office just a couple times a week. So they’re thinking about telework will continue to be a big part of the work life. So the footprint of government buildings could be smaller. And what will the office look like? Will it be the hoteling type space? So that could be different. The challenge, I think, today with organizational culture is government is continuing to hire and onboard staff, so how do you make sure that the office or the organizational culture permeates all staff? And also how do you continue to train them and give them professional development opportunities and leadership opportunities? So I think coming back into the office might make some of that easier, but government is finding out that hey the business of government is still being done and done effectively while people are remote. So I think it will change. We’re not going to get back to the future. So it may not look like it did a year, year and a half ago. That will be interesting. If I can say one more thing. The financial community really stepped up. And like I said earlier, I’m proud to be associated with this community. It continues to evolve and adapt and learn and lean into this national priority to make sure funds are used as intended to support initiatives that will help us move towards a national recovery. So again, I look forward to continue to meet with CFOs and get ready for our next installment in this report, and hopefully we can talk again soon.

Tom Temin: Alright. Ann Ebberts is CEO of the Association of government accountants. Thanks so much for joining me.

Ann Ebberts: Thank you Tom.

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