Advancing Federal Financial Management
Williams, Clifton A., The Journal of Government Financial Management
Measures, Systems and Shared Service Centers: The 2006 CFO Survey
For the past five years, the federal financial community has been steadily improving management by meeting goals established by President George W. Bush's administration. Goals are outlined in the President's Management Agenda (PMA) and the Lines of Business initiative, both managed by the U.S. Office of Management and Budget (OMB). Major changes are imminent, including migrating agency- and departmentlevel functions to shared services arrangements called Shared Service Centers (SSCs, formerly called Centers of Excellence). Although most survey participants support in principle the financial management goals and initiatives of the administration, many of them are worried about the details of implementing SSCs and about operating under this kind of arrangement.
About the Survey
AGA, in partnership with Grant Thornton, surveyed 164 members of the federal financial community between January and April 2006, including 105 federal executives and 59 financial managers and analysts. Except as noted, this article provides the responses of the executives. The surveys focused on measures, systems and SSCs, with additional questions on other areas of interest to the financial community.
This year's surveys of the federal financial community look at three related issues: measures, information systems and the Financial Management Line of Business (FMLOB) Shared Service Centers. Measures have always been important to determining how well government operations perform. Results-oriented government, a byword of President Bush's administration, depends on sound financial and outcome measures to determine the cost-effectiveness of departments and agencies. Developing the right measures quickly and efficiently is the job of information systems, which are also important tools for the job of financial management. The cost of financial management information systems (FMIS) has increased enormously over the years, and the federal government as a whole has not produced stellar results from these investments. Instead of having each agency develop or maintain its own FMIS, economies of scale may be obtained through FMLOB Shared Service Centers (FMLOB SSCs), which are central providers of technology-heavy financial management support services to agencies.
Measures, FMIS and FMLOB SSCs-these are among the major parts of financial management in the federal government today and the near future. All are linked, which is another way of saying that the failure of one can lead to malfunctions in the others. The 2006 CFO Survey examined each part to see how the three are related.
Measures show how an agency delivers results, both in its main mission and in support functions like financial management. The PMA measures performance, and survey respondents agreed that the results-oriented aspects of the PMA's red-yellow-green scoring system are worthwhile. Although some question the method of arriving at a score, most think that agencies are making good progress toward PMA goals.
Figure 1 shows how respondents scored their progress in achieving PMA financial management goals. In interviews, more than 40 percent say that they are moving along the way to success and another 30 percent report that they are nearly there or have arrived.
Most survey respondents said that OMB should continue with its current initiatives. However, OMB and other oversight agencies should not start any new initiatives, especially without providing funding for what are now virtually unfunded mandates. It is time to consolidate gains, said several, and to look for synergies among existing improvement activities. According to many survey respondents, the next great challenge to the financial community is to integrate measures and activities involved in program performance, budget and financial management. Better cost accounting and business intelligence systems will be essential for such integration. …