This Subcommittee, led by Chairman Todd Russell Platts (R-PA) and Ranking Member Edolphus Towns (D-NY), has jurisdiction over all matters related to financial management at executive departments and agencies, as well as the overall efficiency and management of government operations. Representatives Platts and Towns have shown a strong interest in many important financial management issues, such as accelerating agency reporting of financial statements, eliminating improper payments, and improving real property asset management in the government.

Just over two years ago, I joined OMB to become the Controller and head of the Office of Federal Financial Management. At the time, approximately a decade had passed since the enactment of the CFO Act, which created the position of a CFO at the major departments and agencies in the Federal Government. As the statutory head of financial management in the Federal Government, I direct and oversee these CFOs in carrying out substantial portions of their responsibilities. This vantage point, combined with 25 years of private sector financial and management experience, underlies the perspective I shared with the Subcommittee on the role and effectiveness of our CFOs.

Under the CFO Act, the CFO is designated as the executive tasked with financial management and related responsibilities at the agency. While his or her statutory activities are often “downstream” from the policy setting process that leads to program enactment, the CFO is an important member of an agency’s leadership team. From budgeting and funding at the front end, through cost management during program execution, to the final accounting and reporting of the disposition of expenditures, the CFO is involved throughout the entire lifecycle of nearly every agency initiative. This requires CFOs to maintain a knowledge of the agency’s operations that is distinguished by its high level of both breadth and depth.

This broad knowledge has made CFOs attractive candidates for expanded duties at their agencies. For example, a recent study conducted by the CFO Council examined the variation in roles and duties of CFOs at the 24 major agencies. The results of this study support the assertion that agency CFOs have varied duties. For instance, consistent with the CFO Act, all agency CFOs are responsible for financial systems, operations, and analysis. Additionally, nearly all CFOs are tasked with budget formulation, budget execution, and performance management functions. What is noteworthy is the prevalence of CFOs having additional duties in the areas of personnel (11), procurement (10), and grants management (11) functions. Clearly, the CFO is increasingly recognized as being positioned to provide agency-wide leadership that other officials with more limited portfolios cannot offer.

Today’s CFO is not the CFO of the past. Successful CFOs possess not only financial acumen and subject expertise, but have the full range of leadership skills that are found in CFOs of well-run private sector financial management organizations. To be effective in the expanded areas for which they are responsible, these financial executives and their offices have a comprehensive understanding of both the operational and strategic missions of their agencies. All of these characteristics support the objective that agencies and the American citizens deserve decisions that are informed by accurate and timely financial information and that programs are executed in an environment of robust control and cost consciousness.