The public rarely sees the inner workings of government agencies. If they did, they’d know, financial management is key to effective mission delivery. One of the most senior practitioners of the art and science of federal finance is Danny Werfel, the controller at the Office of Management and Budget.

Werfel spoke with Federal News Radio’s Emily Kopp on The Federal Drive with Tom Temin from the Association of Government Accountants National Leadership conference in Washington. He shared some points from the State of the Union for Financial Management he will be presenting tomorrow at the conference.

“Right now, we’re at a critical point,” Werfel said. “The President just released his budget earlier this week. The budget is a balanced approach that makes a lot of tough choices. There’s a lot of cuts that federal agencies are facing, and the financial management community plays a critical role in carrying out those cuts in a way that we’re not compromising the service that we’re providing for the American people.”

Werfel added it was never more important for financial managers to be on their game and help their agencies figure out how to be more efficient and innovative.

“The President has made cutting waste a major priority,” he said. “In a lot of different ways, he has set very bold goals for the government to help eliminate waste and become more efficient.”

For example, President Obama asked federal agencies in 2010 to do better on improper payments and to prevent $50 billion in improper payments by 2013. “Since he put that mile marker down,” Werfel said, “every year since then, the error rate that federal agencies measure has gone down in a way that has helped us prevent $20 billion in improper payments so far.”

The President also set a goal for agencies to save $3 billion by 2013 through better management of their real estate holdings.

“We are halfway there,” Werfel said. “We have a dashboard that’s up on Performance.gov that shows what each agency’s contribution is to the $3 billion goal and where they are. As of today, we stand at $1.5 billion in savings due to better practices with real estate. Again, we’re not all the way to the goal, but it’s a critical foundation to build on.”

In November 2011, the President issued an executive order under the Campaign to Cut Waste asking federal agencies — and chief financial officers, in particular — to cut 20 percent of the budget through better management of a variety of administrative costs. When the President’s budget request was issued earlier this week, it contained a table showing each agency’s contribution, which added up to $8 billion in cuts.

“That’s a significant amount of money,” Werfel said. “The fact that each agency is coming through with a goal for $8 billion, and I already know in talking to the agencies, we’re already making progress on that $8 billion because agencies are taking seriously this directive to find ways to cut costs.”

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