The Finance Officer's Role in Capital Projects

By Casey, Joseph P. | Government Finance Review, June 2008 | Go to article overview

The Finance Officer's Role in Capital Projects


Casey, Joseph P., Government Finance Review


[ILLUSTRATION OMITTED]

Finance officers' responsibilities for capital projects in most mid-size jurisdictions have traditionally focused on their base of strength: budgeting, fiscal management, debt management, and accounting. These skills are critical to ensure that budgets are formulated, funding sources secured, and that the project is properly monitored through the financial and budgetary reports. However, these basic tasks by themselves do not provide the opportunity for the finance officer to contribute in determining the appropriateness, scope, and priority of capital projects. The chief administrative officer or city manager and department managers generating the capital project request primarily assume these roles.

The finance officer's role in capital project planning has great potential to expand into a leadership role. In assuming a greater responsibility for project leadership, the finance officer can help position the local government to consistently make decisions aligned with overall goals and objectives. Centralized oversight can decrease the competition for funds between departments and help ensure that long-term plans are followed to achieve the best outcomes for the jurisdiction and its citizens. The finance officer can also expand the capital improvement program formulation so it is not just a project-funding exercise, but rather a strategic plan that aligns projects to overall jurisdictional goals and strategies and works to complete projects that encompass the right scope at the right time.

HOW FINANCE OFFICERS CONTRIBUTE

Typically, department managers develop a brief description of a project, along with preliminary cost figures. This limited information is given to the finance officer, forming the basis for budgeting, funding, prioritization, and incorporation into the capital improvement program. Within this restricted role, the finance officer is relegated to serving as merely a bookkeeper for capital projects, simply compiling the requests of the many department managers and performing an affordability and political exercise to determine which projects get funded, depending on funding constraints or applicable debt capacity limits.

In some government jurisdictions, project requests are limited by available funds and are reduced in scope to fit a budget constraint, often without proper analysis into whether or not the reduced project can still effectively provide the desired service-level outcome. Occasionally, it may be possible to defer projects to later years, when they might better serve citizens and staff. If finance officers are to be involved with these decisions, they need a much greater understanding of proposed capital projects than they typically have.

Exhibit 1 illustrates the typical level of involvement for department managers, the chief administrative officer, and the finance officer for a mid-sized jurisdiction during common phases of capital projects. Relative to the department manager and chief administrative officer, the finance officer has little involvement early in the process, when criteria are developed for evaluating projects, needs assessments are conducted, alternatives are generated and considered, and cost estimates are prepared. While the finance officer may be aware that the capital project process has begun, his or her limited participation at this stage can result in later challenges. When the finance officer finally gets involved, a knowledge gap exists that presents problems with project prioritization, funding source allocation, budget formulation, and project oversight or cost control. In some situations, governments may not have a process that encourages careful analysis early in the project to define service levels, develop criteria for potential projects, properly conduct a needs assessment, and evaluate all viable alternatives, and information that would normally be supplied to the finance officer does not exist. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Finance Officer's Role in Capital Projects
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.