2009 aga survey analysis steve clyburn may 5, 2009
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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
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- 168 senior executives in U.S. federal & state governments & Government of Canada (in-person)
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- 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
- 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
- Communicate more: educate public, program managers, others about the value of the statements & how to use them
- No value: the statements have no value whatsoever
- 14. How can CFOs increase the value of the annual audited
financial statement? (Selected DOC responses)
- Change statements
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- Benchmark results against those of other agencies.
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- Report in plain English
- Communicate more
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- If you dont demonstrate the value, then people wont give you the dollars. Need to demonstrate that you can account for the dollars.
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- There needs to be continued emphasis & communication about the importance of a clean opinion.
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- Break reports down into aspects important to customers & educate them on these aspects.
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- 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
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- Most major decisions are political with financial statements providing little or no value.
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- 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
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- strengthened controls over financial reporting
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- raised awareness among non-financial managers
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- results mostly financial, not mission-oriented
- Need to emphasize program efficiency & effectiveness scope :
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- 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:
- www.agacgfm.org or
- www.grantthornton.com/publicsector
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