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Federal Financial Managers Plus Private Sector Support: Synergy for Change

Posted on: Tuesday, 5 July 2005, 12:00 CDT

Today, Federal financial managers are confronted with ever increasing demands to implement improvements in financial management practices to further enhance service to the public. Federal accounting standards, JFMIP compliant systems, performance management and "clean" financial statements are some of the challenges they face. In addition to these requirements, increased productivity is being sought through shared services, self-service technology, enterprise resource planning software, and web-based financial applications. Frequently, there is more work to be done in this rapidly changing environment than can be effectively responded to by the agency's expert workforce. Clearly, there is a need for greater staffing flexibility that uses the specialized knowledge and experience of the private sectorto meet these challenges and make better use of the innovations and tools becoming available.

Financial managers are confronted with a much broader scope than traditional accounting and reporting. The context of the CFO's role today is that of a change leader. The desired outcomes for the organization must be clearly defined and articulated within the finance arena as well as in the agency as a whole. In many organizations, successful outcomes are principally accomplished when the organization is uniquely positioned to accomplish their mission by having exceptional access to resources, information and authority so that they can act as catalysts. This model provides an ideal condition for achieving organizational success. Recognizing the changing dynamics in financial management, Federal agencies acknowledged a need to capitalize on improving technology and best practices found in the private sector. Federal financial managers realized that these trends could be applied more rapidly in their agencies by augmenting their internal subject matter experts with private sector knowledge.

Some of the issues faced by the agency financial community are:

* Federal financial offices are increasingly faced with more and more work demands that frequently involve lengthy operational activities.

* Financial offices may be performing functions that are "non- core."

* Financial staff need to augment their skill set by utilizing expert contractor support that can apply state-of-the-art technology.

* Financial offices are evolving from transactional offices to business partners in their agencies by offering more analytical support to the program office.

When confronted with new requirements and increased work demands, a common response is to reorganize. However, this approach in and of itself does not provide a complete solution in a dramatically evolving work environment and meeting the new challenges. In contrast, an agency may restructure its financial management organization to better address the new demands. Restructuring differs from reorganization as reorganization merely realigns existing functions within the overall entity. Restructuring is the process in which the mission of the organization is reassessed, focusing on the identification of core functions. Additionally, the restructured organization can augment their subject matter experts addressing their core functions with support services from within the private sector.

There are many reasons for using the expert knowledge of the private sector to enhance operations and implement new practices and procedures. Some of the primary benefits include freeing internal resources for other purposes, accelerating reengineering benefits, accessing industry best practices, reducing operating costs, reducing business risk, and augmenting the knowledge and experience of the Federal staff without bringing on permanent staff.

The melding of professional contractor talent with core government staff can bring greater innovation and state-of-the-art problem solving to the overall effort. The agency staff is able to use a team based model that draws upon a combination of their collective knowledge and experience and the expertise of the private sector support services which in essence creates an internal strategic alliance. The goal is to create an innovative environment that provides participation and involvement, flexibility, and access to skills that are not readily available internally to the organization while ensuring that inherently governmental functions are maintained. Further, this team concept should result in greater productivity and flexibility to meet changing demands.

The principle thesis is that Federal employees provide policy direction and control enhanced by expert contractors and internal departmental organizational alliances. The group's focus is to be on outcomes, not activities. Achieving outcomes in the area of financial management generally requires significant time and resources. This occurs because the outcomes frequently cross numerous functional areas and involve very complex and highly interdependent processes.

There are usually two main constraints effecting the development of the team based model. First, there is the question of which functions are inherently governmental. Clearly, the decision making process is a government function. In contrast, other tasks such as compiling data, analyzing reports, and developing alternatives for consideration by management can be readily accomplished by other than Federal employees. The second factor involves understanding and accepting the benefits associated with augmenting the organization's intellectual capital with private sector experts.

A key to the team based model is the communications network that integrates the efforts of the contractors in support of the agency staff. The communications network provides enormous capability by ensuring the combined resources of the agency and the private sector experts are focused on the agency's outcomes and function in a cohesive manner. The model refines the organizational footprint, makes the organization more flexible and responsive to change, provides greater access to new capabilities, frees up resources for other purposes, reduces business risk, and improves operations.

The combination of the agency experts augmented by private sector expertise creates a synergy of change that increases organizational productivity and results achievement, which in turn benefits the citizens.

About The MIL Corporation

Founded in 1980, The MIL Corporation is headquartered in the Washington DC area with satellite offices throughout the US. With over 400 employees, The MIL Corporation provides financial systems development and support, financial services, information technology services, and business process reengineering to Federal entities in support of the President's Management Agenda, departmental goals, and internal organizational needs. For more information, visit our website at www.milcorp.com, or email gbergantino@milcorp.com.

The MIL Corporation

4000 Mitchellville Rd.

Suite A210

Bowie, MD 20716

By A. Anthony Tisone, CPA

Copyright Association of Government Accountants Summer 2005

Source: Journal of Government Financial Management, The

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