After 2 years, OMB still lacks permanent controller and that’s a problem

Fred Nutt, President Donald Trump’s nominee to be the Office of Management and Budget controller, is no longer in the running for the position.

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The government hasn’t had a permanent chief financial officer, or in government talk, a controller, for more than two years.

Dave Mader, now at Deloitte, was the last person to hold the title of Office of Management and Budget controller and he left in January 2017.

The Trump administration is now considering its nominee, Fred Nutt, who had been waiting since September 2017 for Senate confirmation, for another position in the government, according to a senior administration official.

This means the administration will be three years old before it has a permanent CFO.

A Senate Homeland Security and Government Affairs Committee staff member said Nutt never received a vote in the full Senate because there were concerns about his qualifications. The aide offered no further details about the concerns. The committee held Nutt’s confirmation hearing in May 2018.

And like I said with the administrator of the Office of Federal Procurement Policy last summer, and the Federal Chief Information Officer before that, Where art thou, OMB controller?

“Not having a controller has a very negative effect when it lasts so long,” said Mark Reger, who worked in the federal financial management community for more than 40 years. “The controller is the financial community’s window into Congress. If Congress wants to know what’s going in the financial management community, the controller is intimately involved in issues, develops a relationship and fosters better communications and understanding, especially in these times when we want to do things differently and we have great opportunities to streamline, gain efficiency and combine operations. Right now, we don’t have that advocate. We just miss that advocate.”

The controller’s role is even more significant when you consider that nearly every initiative under the President’s Management Agenda has a financial component to it.

These include the obvious ones like getting payments right or federal IT spending transparency, but there also ones like moving from low-value to high value work where so much of that work is being done in the financial management community through robotics process automation (RPA) at places like the General Services Administration and the Department of Housing and Urban Development, or sharing quality services, where key milestones are around things like payroll modernization and other back-office functions.

“The PMA is one of the best ones in terms of what it covers and I’ve been impressed with Margaret Weichert’s leadership. But I would like to see more about financial management in the PMA. It’s heavy on IT and other areas,” said one federal financial management official, who requested anonymity because they didn’t get permission to speak to the press. “What the financial management community has done is the Treasury’s vision for financial management and that has filled one gap. But it’s not ideal to have that vacancy open for so long.”

Treasury released that document in August seeking to improve federal financial management across four areas.

Another federal financial management official said the CFO community is tightly coordinated and understands the path it must follow.

Is the OMB controller even necessary anymore?

So that leads us to the question of whether a Senate-confirmed controller is even needed anymore?

Similar to what I heard from the procurement community, federal financial management experts say there are definitely things having a Senate confirmed controller helps with, but CFOs and deputy CFOs know what they have to do to get the job done and move things forward.

Experts praised deputy OMB controller Tim Soltis for both is leadership and accessibility to the community.

“Tim has been an invaluable asset to not only OMB but also to the entire government financial management community. In the absence of a controller, Tim has stepped in to fill both the role of controller and deputy controller of OMB,” said Ann Ebberts, CEO of the Association of Government Accountants. “There is a lot going on and he’s bound to be pulled in multiple directions to fulfill the needs of both roles. He does a great job at balancing the external and internal demands of the job, but I do remember in prior administrations both controller and deputy controller being extremely busy working with other CFOs across the government to push new initiatives in financial management.”

Reger said while Nutt, serving as a senior advisor to the OMB director, can participate in meetings and can influence priorities and plans, he can’t, however, draw people together, be the public face of the financial management community or lead the CFO community like a permanent controller would be able to.

“CIOs are making great progress, but other administration initiatives containing cost, about being more efficient, federal financial people have lot of information that can help with that,” Reger said. “I’m not sure how well those things being married because there is no controller to help direct, coordinate and foster those changes. I don’t see it as a position that particularly effects the day-to-day operations of the government, but it’s a position that effects directional things, enforces and encourages change, and puts the initiatives in the face of people. The financial community acts well when asked to do something, but they need a leader.”

Move out of the compliance mindset

The first federal financial management executive said having that leadership in the community would be especially critical right now.

“There is a big opportunity for us to get away from being so heavy on compliance by using innovative technologies. We need to define what high-value work is for the financial management community and that’s where the controller position is pivotal,” the executive said. “Now more than ever, a federal CFO is needed. We need that leadership to take the community to the next level. Right now we are a little too heavy on compliance and not doing enough to emphasize the value that a strong controller could bring.”

Add to the need for a leader becomes more critical now that the Government Accountability Office is performing a review of the CFO Act of 1990.

“As part of our study, we are seeking information from the CFOs and deputy CFOs of federal agencies to assist us in obtaining information on progress in federal financial management as we approach the 30th year anniversary of the CFO Act and in identifying challenges and leading practices,” the GAO letter to the financial community states, which Federal News Network obtained.

And to take this discussion one step further, the lack of permanent CFOs across the agencies is dramatic.

Of the 24 CFO Act agencies, at least six agencies don’t have permanent CFOs.

AGA’s Ebberts said the lack of permanent CFOs across the government is as big of a problem as not having a permanent controller.

So the question comes back to whether the Trump administration will comprehend the importance of the OMB controller and get someone in place before 2020, or will it continue to under estimate the impact and critical role this and other management positions play in making the government run well?

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