21st Century Federal Financial Managers

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21st-Century Federal Financial Managers A New
Mix of Skills and Educational Levels?

• Preliminary Results of Research Study sponsored
  by Management Concepts
• John D. Webster, CPA, CGFM
• Wednesday, June 27, 2007
• Nashville, Tennessee

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Research Study Question

• Are new competencies required
• for the 21st-century federal
• financial workforce?
• -- Do federal agencies now
• require or will they require a
• financial workforce with a new
• mix of skills and different
• educational levels to work
• effectively?

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Research Methodology

• Review of existing studies and practices and OPM
  personnel data
• Interviews with and/or survey responses from 9
  CFO/DFCOs of major agencies, 6 CFOs from smaller
  agencies/components of major agencies and
• Survey responses from 20 other Federal Financial
  Managers.

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Research Questions

• Is there a change in the mix of Federal financial
  management positions?
• Is there any increase in demand for people with
  more analysis and decision support capabilities?
• What are the most important competencies needed
  for core financial positions?
• What are the major competencies that recent
  college graduates need and lack and are there any
  programs or training provided to address the
  deficiencies?
• What is the status of workforce planning?

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1. Is a change taking place in the mix of
positions?

• Yes -- But, the change is slow,
• evolutionary.
• Drivers of Change
• Technology (e.g., new systems,
• better communications)
• Consolidation/Standardization
• Outsourcing/Contracting
• Additional Value-Added Services Requested

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OPM Employment Data Supports Workforce
Transformation

• Total budget and accounting series (05XX),
• excluding tax, financial institution, and
  auditing
• positions, declined slightly -- 70,000 in
• September 1998 to 69,400 in December 2006.
• Trend masks a significant shift in positions
• from non-professional to professional.

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OPM Employment Data Supports Workforce
Transformation (cont.)

• Specific changes include
• Accounting Technicians (525 series) a
• decline of 39, from 16,700 to 10,300
• Financial Specialists/Analysts (501 series)
  -
• an increase of 88, from 8,600 to 16,200
• Accountants (510 series) - grew only
• marginally, 500 or 4
• Budget Analysts (560 series) an
• increase of 8 (from 12,900 to 14,800) and
• Budget Technicians (561series) a
• decline of 40 or 1,400.
• Over this same 8-year period, the number of
• administrative positions related to financial
• management (301, 341, and 343 series)
• increased 34 or 36,000 positions.

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2. Survey Responses Confirm Trend Toward a More
Professional Workforce

• 63 of the people interviewed or surveyed
  indicated a decrease in the need for people who
  process transactions
• 83 of the people interviewed or surveyed
  indicated a greater demand for people with more
  analysis and decision support capabilities

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• What are the most important competencies?

• Three financial management job series
• evaluated
• Accountant (510)
• Budget Analyst (560)
• Management Financial Analyst (501)
• For each job series survey responders
• indicated
• Most important competencies
• Explanation of priorities
• Competencies Lacking

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What are the most important competencies/skills
for Accountants?

• Top 3 Competencies Selected
• Federal Accounting Federal GAAP and
• Reporting appropriations law
• Basic Government Accounting/Operations
• Mission, functions, and organization of central
  and
• program agencies agency accounting policies
• financial laws and regulations audits and
  formal
• reviews and management controls
• Information Technology Basic concepts and
• personal computer applications federal
  financial
• management systems

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Rationale for selecting the most important skills
for Accountants

• Fundamentals (e.g., GAAP, Federal
• Accounting) can be built on but are hard to
• learn on-the-job If accountants have the
• fundamentals, other skills can be learned
• Management Controls competencies are
• critical to provide confidence in financial
• information
• Financial Management Systems competencies
• are necessary in todays world of integrated
• systems

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What skills do Accountants lack?

• Written and oral communications,
• including writing concisely
• Management controls and implementing
• guidance
• Analytical capability and business acumen
• to be able to provide the right information
• at the right time
• Understanding budgetary and accounting
• relationships

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What are the most important competencies/skills
for Budget Analysts?

• Top 4 Competencies selected
• Basic budget, accounting, and program
• concepts
• Agency Systems for control of resources
• Agency budget operations and processes
• Effective oral and written communication

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Rationale for selecting the most important skills
for Budget Analysts

• Basic knowledge of budget concepts
• and agency programs and ability to
• integrate them is key to work
• Sound basis in general analytics is key
• to budget analysis
• Effective oral and written communication
• skills are needed to formulate and justify
• the budget

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What skills do Budget Analysts lack?

• Written and oral communications skills
• Knowledge of agencys program
• operations and processes
• Analytical capability necessary to
• evaluate and present budget information
• Knowledge of accounting systems and
• appropriations law

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What are the most important competencies/ skills
for Management Financial Analysts?

• Top 3 Competencies Selected
• Basic techniques of financial mgmt, economic
• analysis, internal controls, auditing, and
• evaluation
• Basic budgeting, accounting, and program
• concepts, including financial management
• systems
• Effective oral and written communication

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Rationale for selecting the most important skills
for Management Financial Analysts

• Most important competencies reflect
• the core skill set needed to do the work
• Internal controls and analytical capability
• are critical skills needed to provide useful
• information that has the confidence of
• users
• Effective oral and written communication
• skills are key to presenting information
• in a useful way

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What skills do Management and Financial Analysts
lack?

• Cost accounting and analysis skills
• Written and oral communications skills
• Knowledge of agencys financial systems
• Knowledge of accounting concepts and
• appropriations law
• Ability to integrate planning, budget, and
• program performance information

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4. What major skills do recent college graduates
need and lack? (In order of Survey Frequency)

• Knowledge of Federal appropriations law
• Knowledge of the Federal budget process
• Knowledge of Federal GAAP
• Knowledge of the U.S. Standard GL
• Skill and ability in written and oral
• communications
• Knowledge of basic management control
• systems and processes

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How are agencies handling lack of skills in
recent college grads?

• 76 indicated that a training program
• is used to provide missing skills
• For example, HUD has established a
• Career Management Program (CMP)
• HUDs CMP develops a skills gap
• analysis and then training is provided
• (e.g., mentoring, classroom, details) to
• develop JFMIP core competencies

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5. What is the status of Work- force Planning?

• Most agencies are doing workforce
• planning in support of the budget
• process and are reevaluating positions
• when people retire or leave
• However, only half of agency
• respondents matched service goals
• with workforce skills to identify
• competency gaps and only 41 took
• into consideration planned changes in
• technology

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What is the Real Issue?

• 69 indicated that the current OPM classification
  system meets their needs -- Classification is
  workable
• But, Workforce Planning needs improvement,
  including identification of skill gaps and
  strategies for Training, Recruitment, and
  Retention

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Financial Management Workforce Planning Guide

• Leadership is needed to provide a
• government wide agency guide for 21st-
• Century Federal Financial Managers
• OPMs workforce planning guide could
• be used as a starting point
• An essential element of a workforce
• planning guide for Federal Financial
• Management would be case studies or
• proven strategies in training,
• recruitment, and retention

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Recommendations

• Establish a Federal government wide task force or
  committee to develop a workforce planning guide
  specific to Federal Financial Management
• Establish incentives for workforce planning, such
  as performance indicators, that reward
  implementation of the specific workforce planning
  guide mentioned above

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Recommendations (cont.)

• As a critical part of the Federal Financial
  Management workforce planning guide, document
  strategies used to
• Develop relationships with colleges
  universities to address missing competencies and
  improve the pool of qualified applicants
• Provide training for competencies missing in
  new or existing staff and
• Retain staff.

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Final Comments

• Email John Webster with any
• comments or suggestions at
• jgwebs_at_comcast.net
• Provide any background or related
• information