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1. 2009 AGA Survey Department of Commerce Analysis Clifton A.
Williams, CPA, Partner Shiva Verma, Director Grant Thornton LLP
August, 2009
2. Agenda
About the survey
Maximizing value of financial management
Annual financial statements
What new CFOs need to know
3. About the survey
Sponsored by AGA, supported by NASACT & fmi*igf, conducted
by Grant Thornton LLP in Spring 2008
492 respondents
168 senior executives in U.S. federal & state governments
& Government of Canada (in-person)
Oversample of Department of Commerce executives
4. Maximizing value of financial management
Which is the best way for a CFO to maximize value of financial
management to others?
Provide analytical support for business decisions
Have a "place at the table"
Understand & communicate with users
V V V
5. Maximizing the value of financial management (full survey)
Internal stakeholders External stakeholders
6. Maximizing the value of financial management (DOC)
To internal stakeholders
Take their point of view, e.g., report plan v. actual
Give them good, useful information & show them how to use
it; after awhile, they will get used to using it.
Communicate the value of good budget execution & financial
management through regular communication
Don't pretend that some compliance requirements are useful when
they are notjust explain that they must be done for the greater
good
To external stakeholders
Take their point of view
The CFO is a "clearinghouse" of information requests, so there
are many opportunities for influence
Show links between financial information & customer
requirements
Be transparent; tell the truth if something is going wrong
Many times it just comes down to relationships, so build,
cultivate & maintain them with stakeholders
Provide facts: charts, figures, anecdotes
7. Skills, insights & services that FM leaders should offer
non-FM leaders (DOC)
Provide enhanced performance reporting, not private
sector-style financial statement reporting.
Other CxOs depend on the CFO to make tough choices.
This is currently being done by conducting analysis of their
budgets, regular meetings on their status, etc. These help give
non-financial leaders the understanding & focus they need to
move forward. Also, other stakeholders recognize that non-financial
leaders are in a dilemma & need assistance during tough
financial times.
Staffing needs to catch up with technology so that we can
provide more analysis to non-FM leaders. Technology does the basic
functions FM staff used to do, so we need to get better analytical
skills.
Need up-to-date, on-target information for decisionmakers
Give guidance on what can reasonably be accomplished, given
resources. Focus on ROI of new programs.
8. How can the CFO have a greater role in program management
& oversight? (DOC)
The DOC CFO is instrumental in program management &
oversight. However, there is a vacuum in the experience levels of
program managers, so that CFOs may be forced to play a more active
management role (vs. oversight role) than they should.
You have to convince individuals that you are doing the right
thing.
Help show the value of the programs & business lines, so
that they can get resources (i.e., budgets) they need.
Stay involved with programs through internal financial
reporting; make oversight part of the analysis of plan vs.
actual.
Understand the business needs of programs, along with their
missions.
Help programs with projections, forecasts & other
forward-looking data & analysisdon't simply supply historical
information.
9. What new CFOs need to know: top 5 things
Which is among the top 5 things new CFOs need to know:
Accounting standards?
Staff retention & development?
Financial systems?
10. What new CFOs need to know: top 5 things (Full survey)
Emphasize customer & stakeholder relationships &
communication
Understand entity business & program needs
Initiate succession planning staff retention & development
activities
Trust your staff
Establish effective internal controls
11. Top things that new CFOs need to know (sample of DOC
responses)
Customer/stakeholder relationships
Know them all & never surprise them
Prove your value to the programsyou exist because of them, not
vice versa
Have more details on hand than first asked forthey'll be wanted
later
Be the honest broker
Make sure auditors listen & understand
Understand business/program needs
The CFO job is both financial & non-financial; be involved
in both areas
Learn unwritten budget process rules
Need to better integrate administrative & mission needs
& procedures
Play a key role in performance management & oversight
3/4.Staff
People won't stay as long as you would like; prepare succession
plans
Newer employees have a different culture & motivation than
older ones
Maintain ties with academics to recruit the best people.
Internal controls
Important, mentioned many times
12. Annual financial statements
How can CFOs increase the value of the annual audited financial
statement?
Change them
Communicate more about them
Can't be done
13. How can CFOs increase the value of the annual audited
financial statement? (Codable answers only) Response All DOC
Change the financial statements in some way: eliminate all or
parts; re-focus; more/less detail
37% 20%
Communicate more: educate public, program managers, others
about the value of the statements & how to use them
36% 50%
No value: the statements have no value whatsoever
11% 20% Other 20% 10%
14. How can CFOs increase the value of the annual audited
financial statement? (Selected DOC responses)
Change statements
Benchmark results against those of other agencies.
Report in plain English
Communicate more
If you dont demonstrate the value, then people wont give you
the dollars. Need to demonstrate that you can account for the
dollars.
There needs to be continued emphasis & communication about
the importance of a clean opinion.
Break reports down into aspects important to customers &
educate them on these aspects.
Individual entities do not feel connected to the annual
financial statements. Each lower level feels more & more
distant. The CFO should work with business line managers throughout
the year & ensure that the managers see a link.
No value
Most major decisions are political with financial statements
providing little or no value.
Nothing that can be done to increase the value of the statement
because it doesnt provide value. The production of the statement is
value free.
15. Internal controls (2008 CFO Survey, all responses)
Current model is SOX-based OMB A-123
3 out of 4 executives positive about A-123 results
strengthened controls over financial reporting
raised awareness among non-financial managers
results mostly financial, not mission-oriented
Need to emphasize program efficiency & effectiveness scope
:
Controls over mission results more important than financial
reporting
Need more integration of control activities among CxOs &
program managers
Take a risk based approach to controls
16. For more information
Clifton A. Williams, Partner
703-637-2889
[email_address]
Shiva.Verma, Director
703-373-8740
[email_address]
To download a copy of the full report of Recovery & the
Transparency Imperative (the 2009 CFO Survey), visit: