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As Good As It Gets?FASAB – NAPA STUDY AND REPORTING MODEL NEXT STEPS

WENDY PAYNE, EXECUTIVE DIRECTOR

MAY 27, 2014

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Views expressed are my own. The Board expresses its views in official publications.

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Carol Connelly – Waitress, Single Mom, and Marvin’s Unfortunate Romantic Interest

Marvin Udall – Reclusive Writer in need of psychiatric help

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Melvin Udall: What if this is as good as it gets?

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Financial Information Just Wants to Go Dancing…. Carol Connelly: Do you want to dance? Melvin Udall: I've been thinking about that for a while. Carol Connelly: [standing up] Well? Melvin Udall: No.

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NAPA Finding – Data are Highly Accurate and Granular

◦Analyze and transform into actionable information

◦Link budget, costs, and performance

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NAPA Finding – Need Leadership, Culture Change, & Incentives to Use Financial Data More Effectively

◦Leadership instills a culture that pays attention to costs and performance

◦Create structures and incentives that encourage employees to carefully examine costs and performance

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NAPA Finding – CFO Support for Decision-making Valuable and Evolving

CFO organizations increasingly need:◦to offer valuable decision-making support

◦to evolve to a more modern approach that features sophisticated cost and performance analysis

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NAPA Recommendations

Strengthen the CFO staff’s: - knowledge of program operations (be business partners)

- data analytics skillset (augment traditional accounting)

Federal agencies should link budgeted resources to costs, outputs, and performance.

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NAPA Recommendations

Financial and programmatic dashboards tailored to the decision-making requirements of executives. Integrate financial, operational, and HR-related information in systems. Congress and OMB should create specific legislative and regulatory catalysts to focus agency attention on developing clear cost and outcome data.

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“What If We Believed in Management in Public Organizations?” Skills/Knowledge Needed by Public Managers

1. Report on the ‘state of the organization’, e.g., candid descriptions of successes, failures, future prospects, even if the politicians don’t want to hear them. Skills/Knowledge needed: data analysis and presentation; communication, both written and oral; interpersonal skills.

2. Ask your political bosses for directions …..

3. Report on gaps between the directions received from your bosses and institutional capacity. Skills/Knowledge needed: communication—both written and oral; data analysis and presentation; ability to manage and account for organizational resources; knowledge of policy options and cost-benefit analysis.

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Continued…4. Report on the present and future cost of following the directions you’ve been

given. Skills/Knowledge needed: ability to manage financial resources and estimates; communication—both written and oral; data analysis and presentation.

5. Report regularly on the organization’s productivity, e.g., cost-effectiveness, employee and contractor performance, state and use of equipment and property. Skills/Knowledge needed: data analysis and presentation; cost-benefit analysis; performance measurement; ability to manage organizational resources.

6. Look for opportunities to improve the performance of the public sector as a whole…

Mary R. Hamilton, Ph.D. is a senior executive in residence at the University of Nebraska at Omaha

From PA Times

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What We’ve Learned from Users1. Contextual Information

2. Budget Information and Comparison of Budget to Actual (SBR hard to understand.)

3. Accrual Information Useful to Citizens Hold managers accountable for more than use of “appropriations” Want to know the cost of programs and what they got Interested in long-term needs (liabilities) Various perspectives on cost are being sought and offered (but rarely cost of programs)

4. Revenue Whether exchange revenues cover related costs Who pays what taxes

5. What did we get and how much did it cost? Performance information!

6. Users want broad context – effect on the nation.

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How Users Want InformationInteractivePlain-Language Charts, Graphs, or Pictorial Illustrations Brief Video Summarized information with timely access to details. Easily accessible Ability to perform queries

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Where you can find out more about the reporting model project:

http://www.fasab.gov/projects/active-projects/concepts-the-financial-report/

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My Views – Two Key Paths to Take

1. Use the cost data◦ For Accountants – Interactive Cost Reporting◦ For Leaders – Linking budget, cost and performance

2. Be teacherso Improve communication of key information to relevant users (one size

does not fit all)o Visualize the message

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Statement of Net CostWhat is “cost”?

Which cost perspective is most useful to whom?

Does the disaggregation need to be audited?

How to direct people to the cost perspective they need?

How to offer trend information?

• Salaries• Facilities• Grants• Contracts

• Programs• Activities

• Responsibility Segments

• Subfunctions

Functions

OrganizationsNatural

Classification

Strategic Goals

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In FY 2013, we needed $4.346 trillion To pay for goods and services, acquire assets and reduce some debts.

Where did we get $4.346 trillion?

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How We Financed Goods & Services and Other Needs  FY2013  % of Financing

  Revenues: (in Billions)  

  People Paid directly for goods and services $415.5 9.6%

  Taxes Paid directly by individuals 2,196.4 50.5%

  Taxes Paid by corporations 270.4 6.2%

  Other Taxes (including excise) 375.7 8.6%

  Total Taxes 3,258.0 75.0%

  Unmatched amounts 9.0 0.2%

  Total Financing from Revenues 3,267.0 75.2%   

  Borrowing and Other Liabilities  

  Borrowed money directly from markets 696.1 16.0%

  Deferred compensation promised to employees 264.3 6.1%

  Growth in environmental and other liabilities 110.6 2.5%

  Growth in due and payable balances for transfers to individuals 8.1 0.2%

  Total Financing from Debt and Other Liabilities 1,079.1 24.8% 

  Total Financing $4,346.1 100.0%

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On the Cusp of Greatness!Melvin Udall: I might be the only person on the face of the earth that knows you're the greatest woman on earth. I might be the only one who appreciates how amazing you are in every single thing that you do, and how you are with Spencer, "Spence," and in every single thought that you have, and how you say what you mean, and how you almost always mean something that's all about being straight and good. I think most people miss

that about you, and I watch them, wondering how they can watch you bring their food, and clear their tables and never get that they just met the greatest woman alive. And the

fact that I get it makes me feel good, about me.| 

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Contact and Website Information

General inquiries can be directed to fasab@fasab.gov Phone: 202 512-7350 www.FASAB.gov

◦ Listserv (sign up for emails)◦ Exposure Drafts◦ Active Projects – assigned staff

Contact me at:◦ paynew@fasab.gov◦ (202) 512-7357