How the bean-counters helped the government through the pandemic

It took a lot of technology work to keep the government operating remotely through the pandemic. But what about the finances of it all?

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It took a lot of technology work to keep the government operating remotely through the pandemic. And IT staffs have gotten a lot of credit. But what about the finances of it all? Chief financial officers and their staffs have also labored to keep things under control. Grant Thornton and the Association of Government Accountants surveyed CFOs to document what they’ve done. For the highlights, AGA CEO Ann Ebberts and Grant Thornton Managing Principal Tony Scardino spoke to Federal Drive with Tom Temin.

Interview transcript:

Tom Temin: Let’s start with who did you ask and what did you ask of the CFO and their staffs that function about the pandemic? Tell us about this survey.

Tony Scardino: Tom, the CFO survey done in conjunction between AGA and Grant Thornton is an annual survey of CFOs in both state and federal government. And what we’re trying to do is what are topics of the day? What does the CFO community need to hear about, know about, learn about? So it’s more of a it’s a peer discussion, as well as it is about helping folks understand what are some of the challenges and opportunities in the CFO community. This past year was the first year we actually did it in a series of surveys. So with Ann’s leadership, we were able to reach out to CFOs, both across the government and really focus this past year on COVID-19, the pandemic and what it meant to the CFO community.

Tom Temin: And what did it mean to the CFO community? Ann?

Ann Ebberts: I think it really highlighted the fact that they were resilient. And they were able to continue to do their work. Most offices had had telework policies in some way, shape, or form. But I think moving to 100%,telework, at the drop of a hat, which it really was immediacy meant they had to come up with some routine, some new policies, some new ways of communicating. And I think they really stepped up to do that. And one of the things they talked about was not managing people and overseeing people, but really focusing on what do we need to get done, setting priorities and identifying the staff to focus on those priorities. The pandemic meant a lot of money going out. So that’s – it goes through the CFO community, and they need to manage and oversee and account for it.

Tom Temin: Because when you think about the demands that were on the finances of agencies, you had all of this money flowing in from stimulus bills, trillions of dollars, literally going through some of the agencies. Then you had, a lot of CIOs told us, well, we just added all this capacity for virtual private networks. And that’s not free, or we bought 10,000 laptops to give everybody so everywhere the CFO turned people were asking for money, which was either recently appropriated or had to be reprogrammed or something. So tell us how that affects the CFO operation? What kinds of demands do they face? Tony?

Tony Scardino: Well Tom, the age-old challenge for CFO organizations, the last 20 years, we’ve tried to move from an office of compliance to one of a strategic partnership. But the challenge always remains between customer service, getting money out the door, helping people spend money, plan for it, and also checks and balances – making sure rules and regulations are followed. So that, you know, nobody gets in any trouble. We haven’t done things improperly. And so with the pandemic, there was a huge push to get money out the door as quickly as possible. And as Ann said, pivot to spending money differently in different ways, meeting these needs that we’ve never had before, like you said – 10,000 laptops immediately. Normally, the government – and this is no offense, I was a fed for 24 years – the process, planning, procurement just takes more time. But the pandemic require that things move much more quickly.

Tom Temin: Yeah, and all of this while the CFO staffs and the CFOs themselves were also remote, and that must have added some complexity to the whole picture.

Ann Ebberts: I think they were able to manage – well I know they’re able to manage the complexity, because when you think about the high percentage of CFOs and agencies that completed their agency financial reports on time, their audits, those were conducted on time remotely, and they still got the reports out so they could still collaborate, communicate, and then document for the public what it was that they were able to accomplish.

Tom Temin: We’re speaking with Anne Ebert’s, she’s CEO of the Association of government accountants, and Tony Scardino is managing principal of Grant Thornton, and former fed as he just mentioned, and so what do you think the lessons learned here are what can CFOs take from this when, if it ever happens, agencies get back to normal operations or there are fannies in the actual physical seats again?

Tony Scardino: One of the things I think we’ve learned is building and maintaining relationships by being in the office, right, it’s always easier. I call them planned versus unplanned conversations. Right now, Tom, we’ve mastered efficiency. We can have 15 meetings in a day go back to back to back to back, but there’s nothing like walking out of a meeting together, walking down the hallway and truly talking about some of the things that were left unsaid in the meeting, right? I know that might sound small. But over time literally over, imagine the thousands or millions of conversations that are missing right now. Because I guarantee you, Ann, like me at 10 o’clock this morning we both have meetings, and then at 10:30 we do and then at 11 o’clock – it’s just the way everybody rolls now. So we’re really all talking about efficiency has been great, but we’re not sure about long term effectiveness.

Tom Temin: Right, I can definitely relate to that having worked in an almost empty floor for a year myself with lots and rows and rows of offices and desks. And I wanted to stop by and ask someone, but you just can’t. And sometimes there’s friction in being able to contact someone, spontaneously, I guess. And also in the survey and the results in the published piece there, Ann, there’s a lot about resiliency, which seemed to be some lessons learned here too – one about how resilient government can be, and maybe some lessons on how it can stay that way.

Ann Ebberts: I think in the CFO community, when you think about financial management, it’s rules based. I mean, there’s certain things that you need to do, you have to do, to follow the rules. But, you know, I really think the organization came together and achieved mission. And that’s where their focus was. And, you know, we heard from CFOs that they weren’t worried about managing the people necessarily, the individuals, but really focusing on the job to be done, what people you needed to pull together – to complete something on time and serve the purpose that they needed to serve. But I think too enterprise risk management -has been bred into the CFO community for years. That’s what they focus on. And I don’t believe anybody had on their risk list “pandemic that would last for 18 months, two years.” So they’ve really been able to adapt, again, the strategic planning that they’ve always been doing, the relationships that Tony talks about that they’ve built across the enterprise, to continue to move forward and do the work they need to do while even hiring and onboarding staff and having staff retire. I mean, so all those normal things are ongoing.

Tom Temin: Yeah, I wanted to ask you about that too, the idea of hiring financial staff and accountants and financial analysts and so forth that come under the CFO function. And each profession has its challenges with respect to hiring new people that you can’t have come into the office and take around and meet everybody, and so on. So, Tony, what are some of the challenges ahead here for the CFO channel, as new people come into government doing this?

Tony Scardino: Well Tom, I think the largest challenge right now, is the concept of remote working. Office space – do people need to come back into the office? If so, how many times? And that relates to recruitment. Because literally, we are recruiting folks out of college, earlier in their careers, and one of the first questions they asked is, do I have to come in the office every day? Everybody’s trying to figure out what makes the most sense. I know of many, many folks that have left jobs, because they didn’t want to come into the office every day right now. So from a retention perspective, we know that it’s becoming a competitive disadvantage to requiring people to come in every day. Everybody wants flexibility. I’m not saying everybody wants to never go into the office. Just folks haven’t figured out what is the sweet zone of how many days a week should people be in the office. And for some people, they’re like, “Hey, I never want to go on the Metro again, I never want to go to the office again.” And other people are craving it. They want to come back every day. So total flexibility may not work towards effectiveness. Let’s take office space: If people come in one day a week, do you need to keep the same amount of office space? But what about that person that wants to come in five days a week? So no one’s quite figured out – I’m sure you’ve seen some of the groups out in San Jose, they’ve changed a lot of their policies. They were going to all come in every day or three days a week in September, then it was October, and I just saw one of the big ones said January. Nobody knows the future, but it’s changing so fast. All we know is the rapid pace of technology is going to force us to make quicker decisions and be flexible and nimble.

Tom Temin: And it sounds like also the financial people will need new models. Because if the office space calculus changes, and who comes in when – a lot of variables, the real estate itself, parking permits, Metro allowances, all that kind of stuff gets completely chopped up and mixed up. And so I would think there’s some technical challenges to figuring it out all and making sure the money is there that you need for those different pieces of the personnel part as it overlays real estate and transportation.

Ann Ebberts: We know Tom, I mean, a flexible schedule has been in place for years in many offices where people did the compressed work schedule, they would take every other Friday off. So then you had to start planning meetings. “Okay. We don’t have meetings on Fridays. We only have on Monday through Thursday or whatever.” So I think the government workforce is used to adapting to different models, to the extent that some offices had gone to kind of the bullpen look with lots of modular furniture. Well think about it – those aren’t fixed walls, you can realign and move some of that around to figure out – configure the way you want to configure when you discuss with teams about how they want to work together when they are in the office.

Tom Temin: So bottom line, then for everybody else in the federal agency as you do your planning, don’t do it without checking with the CFO. Correct?

Ann Ebberts: Correct.

Tony Scardino: I’ve been the CFO of three federal agencies – I would say that all the time.

Tom Temin: Okay, yes, spoken like a former CFO. Tony Scardino is managing principal of Grant Thornton and Ann Ebbert’s is CEO of the Association of Government Accountants. Thanks so much for joining me.

Ann Ebberts: Great seeing you.

Tony Scardino: Thank you, Tom.

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