CFOs: Surviving in a New Era - AGA

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Audits and auditors
Auditors may be hard hit, too, says a state executive:
“In tight times there are more audits and
more attention to auditing and accounting standards.
That means that reductions in audit staff
would present great challenges for us to meet
required audit procedures and deadlines, which
means less accuracy. Also, federal rules and
regulations with which we have to comply create
exponential challenges for us to meet deadlines
with fewer resources.”
As for when budget reductions will begin to affect
financial management, a state financial manager
says, “There will be little impact in the short term,
and maybe midterm degradation in accuracy,
timeliness and service will be acceptable. But we
cannot keep the dam from bursting forever.”
The silver lining
“I see budget reduction as a benefit,” says a
federal executive, “We have become complacent,
and this forces the government to examine our
operations. It shakes things up.” Says another,
“There will be efficiencies if we do the budget
cutting properly. If leaders are willing to eliminate
things that do not add value to the mission,
to reduce the number of pet projects and break
up fiefdoms, then some reductions will make
things better.” Finally, a federal executive involved
in innovation says, “Any time there is a cut in the
financial management budget, agencies respond
well by finding new solutions.” The thing is to
find those solutions, says another executive, “We
have 275 financial staff and if we cut 25 of them
and do their work more effectively, then we save
money. But without better effectiveness, we will
just introduce inefficiencies and increase risk.”
Certainly, governments will have to manage their
money better. Says a federal executive, “We have
wasted a lot of money on systems, and I think
– I hope – that budget reductions will cause federal
leaders, especially chief information officers
and implementers to do a better job of managing
projects and to make better decisions on where
to spend financial management dollars. Over the
years, there have not been many penalties for
running a poor project.”
“There will be efficiencies if we do the budget cutting
properly. If leaders are willing to eliminate things that do
not add value to the mission, to reduce the number of pet
projects and break up fiefdoms, then some reductions
will make things better.”
—a federal executive
How to deal with reduced
financial management budgets
We asked executives we interviewed how they
have dealt with or plan to deal with reductions
to financial budgets.
Set priorities
Perhaps the best suggestion from all survey
respondents is to reduce the amount of work
you do according to a set of priorities based on
management decision making, risk or the public’s
need to know about government fiscal issues.
“You need not do fiscal reviews by traveling to all
grantee sites,” says a federal executive, “You can
just visit the medium- or high-risk ones.” Says
another, “Focus on the big savings opportunities.”
For example, like the sea captain who said, “The
floggings will continue until morale improves,”
elected and appointed officials tend to ask for
more reports when times get tough. Some CFOs
have been successful in persuading elected and
appointed officials and central offices to rank