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21st Century Federal Financial Managers A New Mix of Skills And Educational Levels?

AGA CPAG Research Series: Report No. 14January 2008

About the Authors and ResearchJohn D. Webster, CGFM, CPA, is an independent con-

sultant providing accounting and training services and isvice chairman of AGA’s Journal of Government FinancialManagement Editorial Board and a member of the Architectof the Capitol Audit Committee. He previously served aschief financial officer at the Library of Congress from 1989to 2005 and was responsible for strategic planning, annualprogram performance planning, budget, accounting opera-tions, financial reporting, financial systems and disbursingfunctions. From 1975 to 1989, Mr. Webster worked with theOffice of Personnel Management (OPM), most recently asdeputy assistant director for Financial Control and Manage-ment, Retirement and Insurance Group.

Prior to joining the government sector, Mr. Webster was asenior accountant with Haskins & Sells where he special-ized in financial audits and systems development for publicand private organizations. Mr. Webster holds a bachelor’sdegree from the University of Maryland (1972). Mr. Websterhas received numerous awards, including the distinguishedservice award from both OPM and the Library of Congressand the Donald L. Scantlebury Memorial Award from theJoint Financial Management Improvement Program inMarch 2005.

Views expressed in this report are those of the authorand are not necessarily the views of AGA.

AGA is Proud to Recognize the Firm Supporting This Effort:

AGA Corporate Partner Advisory Group Research

ACKNOWLEDGEMENTS

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AGA’s Corporate Partner Advisory Group (CPAG), execu-tive director and director of research are creating researchprojects of value to governments, industry and the entireAGA membership. These studies are expected to result inreports assessing current and/or best practices and makerecommendations for future improvements in federal, stateand local governmental accounting, auditing and financialmanagement. CPAG members support AGA researchthrough either cooperative or sponsored research projects.“By undertaking research, AGA is fulfilling its mission as athought leader in advancing government accountability,”said AGA Executive Director Relmond Van Daniker, DBA,CPA. “This is one of numerous research initiatives that willbenefit government and bridge the gap between the publicand private sectors.”

The CPAG was organized in 2001 as a business elementwithin AGA. The mission of the CPAG is to bring industryand government executives together to exchange informa-tion, support professional development, improve communi-cations and understanding, solve issues and buildpartnership and trust, thereby enhancing AGA’s focus onadvancing government accountability. Corporate memberinvolvement in the CPAG is limited to organizations thatsign up for the AGA Corporate Partner membership pro-gram. For more information on the research program, pleasevisit www.agacgfm.org/research/default.aspx or contact AnnaMiller at [email protected].

AGA’s Corporate Partner Advisory Group Research Program: Building the Bridge Between Government and Industry

Corporate Partner Advisory Group Leadership

ChairmanHank Steininger, CGFM,CPAManaging Partner, Global Public Sector, Grant Thornton LLP

Vice ChairmanJohn Cherbini, CGFM, CPAPartner, KPMG LLP

AGA Professional StaffRelmond Van Daniker,DBA, CPAExecutive Director

Anna D. Gowans Miller,MBA, CPADirector of Research

Susan FritzlenDirector of Corporate Partner Program

Marie ForceDirector of Communications

Christina CamaraPublications Manager

We would like to express our sincere thanks toMitch Laine, CGFM, and Evelyn Brown, CGFM, fortheir valuable comments on an earlier draft of thisreport. Their expertise and efforts markedlyimproved the quality of the report.

3January 2008

TABLE OF CONTENTSExecutive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Findings and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

The Study—Questions Posed and Discussions of Survey Responses . . . . . . . . . . 6

The Status of Workforce Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

The Workforce of the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Most Important Competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Accountants (510) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Budget Analysts (560) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Management and Program Analysts (343) or Financial Specialists (501) . . . . . . 11

Summary of Most Important Competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Recent College Graduates—The Most Important Competencies . . . . . . . . . . . . . . . . . . 13

Agency Training Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Need for Better-Educated Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Lessons Learned and Best Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Where Do We Go from Here? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

End Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Appendix A: Advisory Group Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Appendix B: Survey Instrument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18


21ST CENTURY FEDERAL FINANCIAL MANAGERS

4 AGA Corporate Partner Advisory Group Research

Executive SummaryFederal government agencies face a serious human capital

and leadership challenge. Pundits have long predicted amassive retirement wave, and the wave is now approachingthe shore. Sixty percent of the workforce is expected tobecome eligible for retirement over the next 10 years. A massretirement of experienced managers could leave an agencywith an inadequate workforce and thus vulnerable to mis-sion failure. What is true for human capital management ingeneral is also true for the federal financial managementworkforce. Recognizing the human capital challenges facinggovernment agencies, the Association of GovernmentAccountants (AGA), with support from its Corporate PartnerAdvisory Group partner Management Concepts, decided toconduct a study to provide a snapshot in the year 2007 ofhow federal financial management leaders and mid-levelprofessionals are framing the challenges facing them.

The study identifies the skills federal financial managersneed to do the work of the government in the 21st century,discusses the research findings and makes recommendationsfor action to improve the capacity and capability of the fed-eral financial management workforce for the next century.This study concludes that the federal government should:• Develop a comprehensive improvement plan for the fed-

eral financial management workforce, including provenstrategies for making sure the people with the right skillsare in the right jobs. A Workforce Planning Guide specificto federal financial management is needed to help agen-cies develop and implement their plans.

• Set up incentives to push workforce planning along andencourage leadership. There have been some attempts tomake legislative changes to provide incentives, but moreis needed. The crucial component for any reform is strongleadership, the “tone at the top.” Strong leadership wouldenable agencies to make use of such incentives and con-duct more effective workforce planning.

• Institute a requirement for continuing professional educa-tion (CPE) programs for professional and administrativefederal financial management positions, as is done nowfor federal government auditors. Managers would berequired to obtain a specific number of CPE hours everytwo years. Education providers could tailor courses thatwould provide the CPE hours and ensure that managersobtain and maintain the skills they need to perform theirjobs. One way to ensure that managers obtain the requiredcontinuing education would be to promote a certificationthat includes a CPE requirement.

• Urge the National Association of State Boards of Accoun-tancy and the American Institute of Certified PublicAccountants to include basic federal accounting questionson the CPA examination, which already includes ques-tions on state and local government accounting. Includingthese would encourage colleges and universities toinclude a “Federal Accounting 101” course in their curriculum.

Without adequate planning and strategies to handle thechanges that will continue to take place in the federal finan-cial management workforce, federal agencies will not be ableto support adequately the future financial decisions of themost complicated entity in the world. If they fail, the resultwill be government inefficiencies and ineffectiveness on agrand scale or a costly, and perhaps inappropriate, depend-ency on outsourcing with contractor staff providing theneeded expertise.

IntroductionThe goal of this research was to identify the skills and

educational levels needed by federal financial managers toimprove the efficiency, effectiveness and accountability offinancial management in the 21st century, discuss best prac-tices, if applicable, and make recommendations for improve-ment. The impetus for the study was a series of task forcediscussions addressing human capital issues and suggestingsolutions. These were held in conjunction with AGA’s annu-al Professional Development Conference & Exposition in2004,1 20052 and 20063 and spurred action on a number offronts to improve human capital management in the federalgovernment, including this research study on the skills andeducation needed by financial managers.

One of the task force members and an AGA CorporateAdvisory Group Member (CPAG), Management Concepts,identified the need for further data about the changes takingplace in skills required for federal financial managers in the21st century and approached AGA in 2006 with a proposalto sponsor a research study. The research study assessedwhether federal agencies now require or will require a finan-cial workforce with a new mix of skills/competencies anddifferent educational backgrounds to work effectively in the21st century. The study also assessed the status of workforceplanning, which is a key element for ensuring the accom-plishment of agency goals. The study addresses federal gov-ernment agencies only, not state and local governments.

This research report describes the results of the researchstudy. It is hoped that the findings and recommendationspresented in the report will help guide the federal financialcommunity in workforce planning and making available thetargeted training and education programs that will prepareboth recent college graduates and its more experienced newstaff to face the challenges of acting as effective stewards oftaxpayers’ money.

Findings and RecommendationsFindings

The study’s findings, albeit from a small sample, reinforcethe changes and trends reported previously by other studies.Respondents in interviews and the online survey indicate that:• Workforce planning is being done as part of the budget

process at most agencies. What is lacking—and is moreimportant—is the identification of competency gaps anddevelopment of strategies to make sure the people with the right skills are available to ensure mission accomplish-ment. Technological and demographic changes, among

other factors, are driving a major shift in the workforce,and targeted workforce planning is urgently needed todevelop and implement strategies that are effective inresponding to and implementing these changes.

• The mix of federal financial management positions ischanging: clerical and technical positions are decreasingand professional and administrative positions are increas-ing. Technology is the major driver of this shift.Improved technology has decreased reliance on manualprocesses and the need for the clerical and technical staffthat process transactions. Positions that are still neededrequire a better educated workforce.

• Organizations are experiencing a greater demand forpeople capable of providing analysis that supports deci-sion-making. All three major federal financial manage-ment positions—accountant, budget analyst andmanagement and financial analyst (see page 9)—requireanalytical and decision-support competencies. Much ofthis analytical and decision support work is being drivenby the influx of new reporting requirements such as OMBCirculars A-123 and A-136, by the Performance Assess-ment Rating Tool (PART) and the budgeting process, andOMB and congressional requests of agencies to provideprogram outcomes and measures.

• Respondents indicate that the top competencies requiredfor accounting, budget analysis, and management andfinancial analyst positions are knowledge of basic federalbudgeting, accounting, and program concepts and princi-ples. College graduates will not enter the federal workforcewith these competencies. Agencies will have to train them.

• The major competencies that college graduates lack areknowledge of federal appropriations law and the federalaccounting and budget process. For existing staff, com-munication skills and analytical capabilities are compe-tencies that survey respondents cited most often asmissing.

• Changes in technology, more demands for analytical anddecision support skills, and new laws and regulationsrequire a long-term commitment by employees and man-agement to continuing professional education. Auditorsand acquisition professionals in the federal governmentshow this commitment. They must complete a certainnumber of continuing professional education (CPE)hours in every reporting period to prove that they aremaintaining their skills. There is currently no similarrequirement for federal financial managers.

RecommendationsThe federal government should:• Develop a comprehensive improvement plan for the fed-

eral financial management workforce, including provenstrategies for making sure the people with the right skillsare in the right jobs. A Workforce Planning Guide specificto federal financial management is needed to help agen-cies develop and implement their plans.

• Incentives are necessary to push this process along. Therehave been some attempts to make legislative changes to

provide incentives, such as better compensation and ben-efits, but more is needed. The ability to make use of suchincentives would encourage agencies to do more effectiveworkforce planning

• Institute a requirement for continuing professional educa-tion (CPE) for professional and administrative federalfinancial management positions, as is done now for fed-eral government auditors. Managers would have toobtain a specific number of CPE hours every two years.Education providers could tailor courses that would pro-vide the CPE hours and ensure that managers obtain andmaintain the skills they need. One way to ensure thatmanagers obtain CPE would be to have a certificationthat includes a CPE requirement.

• Urge the National Association of State Boards of Accoun-tancy and the American Institute of Certified PublicAccountants to include basic federal accounting ques-tions on the CPA examination, which already includesquestions on state and local government accounting.Including these would encourage colleges and universi-ties to include a “Federal Accounting 101” course in theircurriculum. AGA is currently working with colleges anduniversities to have such a course included in their cur-ricula.

BackgroundFor the past two decades, federal agencies have faced the

challenge of providing financial services in an environmentwhere work is being shaped by new technology (for exam-ple, integrated financial systems) and the need to respondto new requirements and requests for value-added services,often with existing or reduced budgetary resources. As fed-eral work is changing, there has been increased federal gov-ernment focus on workforce issues and acquiring “the rightpeople with the right skills.”4 However, progress towardthat goal has been slow.

In 2001, the Government Accountability Office (GAO)identified human capital management as a governmen-twide high-risk area because federal agencies lacked astrategic approach to human capital management that inte-grated human capital efforts with their missions and pro-gram goals.5 In following agency progress on addressingthis high-risk area, GAO has issued a number of reportsand provided testimony before the Congress (several ofthese are cited in the End Notes to this paper).

In 2001, the Executive Office of the President released thePresident’s Management Agenda (PMA), which set out fivemanagement governmentwide reform initiatives for federalagencies.6 The first of the five, Strategic Management ofHuman Capital, encourages federal agencies to implementstrategic workforce planning to support the development ofa high-performing workforce. Agencies are encouraged toundertake these efforts toward the goal of developing ahigh-performing workforce that supports accountability.

The Chief Human Capital Officers Act of 2002 establisheda Chief Human Capital Officers (CHCO) Council, and theCHCO established a subcommittee on Human Capital

5January 2008

A NEW MIX OF SKILLS AND EDUCATION LEVELS?

Workforce. This subcommittee is working with the Office ofPersonnel Management (OPM) to analyze existing compe-tency gaps in the federal human capital profession anddevelop strategies to close these corporate competency gapsin the human capital management occupation. AnotherCHCO subcommittee, the Subcommittee on Hiring andSuccession Planning, supports innovative solutions to meetthe complex mission requirements of the 21st century feder-al workforce, which includes the financial job series.

David M. Walker, comptroller general of the UnitedStates, has emphasized the critical importance of humancapital management for the federal government. Mr. Walker,in testifying before the National Commission on the PublicService in July 2002, stated, “I believe that there is no moreimportant management reform than for agencies to trans-form their cultures to respond to the transition that is takingplace in the role of government in the 21st century. Strategichuman capital management must be at the center of thistransformation effort.”

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In 2003, the Joint Financial Management ImprovementProgram (JFMIP) addressed concerns around workforceplanning as it relates to federal financial management in itsreport, The Future of the Financial Management Workforce.8 Thereport examined the skills and competencies needed in thefederal financial management workforce. Among its find-ings was identification of the need for new analytic anddecision support skills in the financial management work-force. The Federal Systems Integration Office (FSIO) hastaken over the role previously filled by JFMIP in developingcore competencies, and now produces the core competencyguides for the various functional areas, see page 10 and End Note 17.

In October 2006, a workgroup of the National Academyof Public Administration (NAPA) issued a report thatencouraged the training, development and recruitment ofthe financial management community, which included a ref-erence to financial management intern programs. NAPAstated that “such a recruitment program allows financialmanagers to operate on a level playing field with non-gov-ernmental organizations in employing individuals with aninterest in financial management careers, and preparingthem to be effective in that field.”

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In testimony before Congress on March 6, 2007, OPMDirector Linda M. Springer stated that roughly 60 percent ofthe federal workforce is expected to be eligible for retire-ment over the next 10 years.10 Ms. Springer further statedthat OPM plans “to submit a number of legislative propos-als to improve certain features of our benefits programs andto enhance federal agencies’ ability to recruit and retain ahighly skilled workforce.”

Despite all these efforts, as of July 2007, human capitalmanagement was still included as a problem area on theGAO’s high risk series. The GAO has retained it as a gov-ernmentwide high-risk area because “the federal govern-ment has not transformed, in many cases, how it classifies,compensates, develops and motivates its employees toachieve maximum results within available resources and

existing authorities. A key challenge is determining how toupdate the government’s classification and compensationsystems to be more market based and performance orient-ed.” Clearly, more remains to be done. This AGA reportsuggests directions for further improvement.

MethodologyThe research focused on federal departments and agen-

cies and comprised interviews with selected officials andsurveys completed online by managers, supervisors andothers in the financial community. The project had fourphases:• review existing studies and practices. • conduct interviews, either by phone or in person, with

chief financial officers (CFOs), deputy CFOs or their rep-resentatives, and with a limited number of financial man-agers who responded to the online survey.

• compile data from other studies, interviews, online sur-veys and information from other interested parties.

• prepare a report summarizing the results and providingrecommendations. An advisory group (see Appendix A on page 17) com-

posed of representatives from the federal government andthe private sector helped define the scope of the researchand provided additional input.

This report includes results of interviews and/or surveyresponses from nine CFOs/deputy CFOs of the major agen-cies (making up 38 percent of the total major agencies), sixCFOs from smaller agencies or components of major agen-cies, and survey responses from 20 other federal financialmanagers.

Input was sought from both senior people and mid-levelstaff (from online survey responses) to ensure that bothwere included in the results. Senior people typically workmore closely with agency strategy and goals, whereas mid-level staff personnel operate closer to the actual financialwork. Interestingly, interview and survey results revealedlittle appreciable difference in the perspectives of eachgroup, though, in some cases, mid-level staff had lessawareness of workforce planning efforts.

The Study—Questions Posed and Discussion of Survey ResponsesThe following questions were posed in the survey: • What is the status of federal workforce planning?• Is there a change in the mix of federal financial manage-

ment positions?• What are the most important competencies needed for

core financial management positions?• What are the major competencies that recent college

graduates need and lack, and are there specific programsor training provided to address the deficiencies?

• Is there an increase in demand for people with moreanalysis and decision support capabilities?



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In the interview process, these same questions wereposed, but the format allowed for a more expansive discussion. For a complete list of survey questions, seeAppendix B on page 18.

Discussion of the survey follows by topic area.The Status of Workforce Planning

Identifying future federal financial management work-force requirements is a challenge in a changing environmentwhere new technology, financial standards and serviceexpectations are the norm. The changes ushered in by a his-toric number of new financial management laws has beendramatic, including the establishment of a new organiza-tional structure for federal financial management requiredby the Chief Financial Officers Act of 1990.

As noted earlier in this research report, key organizations(that is, GAO, OMB, JFMIP, CHCO Council/OPM) have allpointed to the need for strategic workforce planning, whichaddresses two critical needs: aligning an organization’shuman capital program with its current and emerging mis-sion and programmatic goals, and developing long-termstrategies for acquiring, developing and retaining staff toachieve programmatic goals.

Workforce planning typically involves setting goals orlevels of service for an organization, identifying the

resources—including personnel competencies—required tomeet those goals, establishing an inventory of competenciesin the current workforce, identifying competency gaps inthe workforce, and identifying strategies to transform aworkforce to meet the needs of the future.

As Figure 1 illustrates, the survey found that most agen-cies are doing workforce planning in support of the budgetprocess. But workforce planning in the context of the budg-et process may not cover all of the elements necessary forthe future. Figure 2 shows that most respondents’ agencies(79 percent) base workforce plans upon identified goals orservice levels but only half of respondents’ agencies matchthose service goals with workforce skills to identify compe-tency gaps or use the core competency documents. Also,only 39 percent took into consideration planned changes intechnology. In addition, the number of unsure answers mayreflect a lack of knowledge and exposure to the workforceplanning process. The survey did find that two-thirds of theagencies are taking future retirements into account as partof the planning process.

Agencies are doing workforce planning, but the surveyshows that workforce planning needs improvement, includ-ing identification of skill gaps and strategies for training,recruitment and retention.

Workforce Planning Statement Response RankWorkforce plans are prepared in support of the budget process, which typically covers two to three years 37% 1

Workforce plans are prepared annually as part of an agency’s operating plans 23% 2

Workforce plans are prepared in support of the strategic planning process, which typically covers five or more years 20% 3

Workforce plans are not prepared 11% 5

Other (e.g., do not have access to this information) 17% 4

Figure 1: Statement That Best Reflects the Status of Workforce Planning for Your Organization

Survey Statement “Yes” “No” “Unsure”“Yes” Rank

Workforce plans are based upon identified goals or service levels 79% 3% 17% 1

Workforce plans use core competency documents to identify the types of peoplerequired to meet goals or service levels 52% 17% 31% 4

Your organization maintains an inventory of competencies in the current workforce 62% 24% 14% 3

Workforce plans identify competency gaps 50% 18% 32% 5

Workforce plans identify retirement projections 66% 7% 28% 2

Workforce plans take into consideration planned changes in technology 39% 25% 36% 6

Figure 2: Preparation of Workforce Plans




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OPM’s Human Capital Framework11 provides a model forworkforce planning. The model uses the following five-stepprocess:• Set Strategic Direction—Link the workforce plan with

the agency’s strategic plan, annual performance plan andwork activities.

• Analyze Workforce—Determine what the current work-force skills are, develop what are the types, numbers andlocations of workers required to meet strategic goals andidentify what gaps exist between the current and project-ed workforce needs.

• Develop Action Plan—Identify the strategies to closeskills gaps; plan to implement the strategies; and meas-ures for assessing strategic progress.

• Implement Action Plan—Ensure that roles are under-stood and that the necessary communication, marketingand coordination are occurring to execute the plan.

• Monitor, Evaluate and Revise the Plan—Monitorprogress against workforce planning milestones, assess-ing for continuous improvement purposes, and adjustingthe plan to make course corrections and to address newworkforce issues.Effective workforce planning is a valuable tool to align

workforce requirements to the agency’s strategic plan,develop a comprehensive picture of where gaps existbetween competencies the current workforce currently pos-sesses and future competency requirements, and identifyand implement gap reduction strategies.12

Other organizations have also released reports on work-force planning, including the International Personnel Man-agement Association (2002 report), National Association ofPubic Administration (1999 and 2000 reports) and the GAO(2003 report). In GAO’s 2003 report,13 common elements ofthe various models were listed:• Examining future organizational, environmental and

other issues that may affect the agency’s ability to attainits strategic goals.

• Determining skills and competencies needed in thefuture workforce to meet the organization’s goals andidentifying gaps in skills and competencies that an organ-ization needs to address.

• Selecting and implementing human capital strategies thatare targeted toward addressing these gaps and issues.

• Evaluating the success of the human capital strategies.Why did this survey find workforce planning lacking at a

time when changes in the workforce are apparent and whenleading management organizations are all recommendingthat agency’s prepare the plans? The answer to this ques-tion is two-fold. First, additional guidance is needed to helpprepare workforce plans, and second, day-to-day require-ments are consuming management’s attention andresources. Plans may be on the bottom of a long to-do list,especially when there is no direct measurement of whetherthe plans are being prepared, and no impact on personalperformance evaluations.

The Workforce of the FutureWhen asked whether the mix of financial management

positions has changed and the demand for people with moreanalysis and decision support capabilities has increased,respondents answered in the affirmative. Data from OPMand from the survey confirm that a change is taking place inthe mix of federal financial management positions.

Survey results confirm what OPM data reveals regardingthe shift from clerical and technical positions to more pro-fessional and administrative positions. Typically, profession-al and administrative staff require more substantialanalytical capability and a better knowledge of “why” notjust “how” a transaction works. The OPM database on fed-eral employment indicates that the total number of peoplein the budget and accounting series (05XX) was relativelythe same over an eight-year period from September 1998 toDecember 2006.14 But the trend masks a major shift fromclerical and technical positions that support primarily man-ual processing to professional and administrative positionsthat provide decision support, as well as other services.

Figure 3 shows that the total number of accounting andbudget personnel, excluding audit, tax and financial institu-

PositionSept1998

March2007 Change

%Change

PROFESSIONAL AND ADMINISTRATIVE

Financial Specialist (501) 8,633 16,720 + 8,087 + 93.7

Financial Management (505) 1,523 1,267 - 256 - 16.8

Accountant (510) 12,284 12,578 + 294 + 2.4

Budget Analyst (560) 12,874 13,444 + 1,091 + 4.4

Subtotal 35,314 44,009 + 8,944 + 24.6

CLERICAL AND TECHNICAL

Financial Clerical (503) 6,329 7,167 + 838 + 13.2

Accounting Technician (525) 16,719 9,725 - 6,994 - 41.8

Cash Processing (530) 1,556 1,149 - 143 - 3.9

Voucher Examining (540) 2,044 1,046 - 998 - 48.8

Civilian Pay (544) 2,138 1,313 - 825 - 38.6

Military Pay (545) 2,273 1,972 - 301 - 13.2

Budget Clerical (561) 3,464 1,936 - 1,528 - 44.1

Student Trainee (599) 195 448 + 253 + 129.7

Subtotal 34,718 24,756 - 9,962 - 28.7

TOTAL 70,032 68,765 - 1,267 - 1.8

Source: Office of Personnel Management.

Figure 3: Federal Financial Management Employment:September 1998 Compared to March 2007

9January 2008

tion personnel, decreased slightly from 70,032 in September1998 to 68,765 in March 2007, a decrease of 1,267 or 1.8 per-cent (see Figure 1). During this same period, the mix of pro-fessional and administrative to clerical and technical shiftedfrom roughly 50/50 to 64/36 percent. Figure 3 details thisshift and Figure 4 illustrates the overall shift from clericaland technical to professional and administrative positions.(Note: OPM classification standards define federal job seriesand separate the accounting and budget group into twoareas: professional and administrative and clerical and technical.)

Over the same eight-year period, the number of generaladministrative professional positions related to financialmanagement (301, 341 and 343 series) increased 34,683 or 33 percent.

Survey results confirm the shift from clerical and techni-cal to professional and administrative. Sixty-three percent ofthe survey respondents answered “yes” to the question, “Isyour organization experiencing a decrease in the need forpeople who process transactions?”

Technology is seen as the major driver of this change.New integrated financial management systems and addi-tional interfaces are examples cited by respondents to sup-port the argument that better technology has decreasedmanual processes and the need for clerical and technicalstaff to process transactions.

Consolidation and standardization of multiple processinglocations, implementation of cross-servicing arrangementswith shared service providers, and outsourcing of voucherprocessing and other manual processes were also cited asreasons for a decrease in clerical and technical staff.

Survey results overwhelmingly (83 percent) indicate thatagencies are experiencing a greater demand for people withanalysis and decision support capabilities. A representativelisting of reasons cited as driving the increase in demandfollows:• “As systems are upgraded, fewer personnel will be

required to provide basic reports and raw data extracts asthis will be incorporated into the functionality of theupgraded systems. The personnel who were responsiblefor providing the basic reports and raw data will transi-tion into providing analysis and decision support.”

• “Budget constraints drive more analysis ... to supportdecisions.”

• “Data is more readily available and a demand for opti-mizing the use of resources requires data analysis.”

• “There has been an influx of new reporting requirements(for example, OMB A-123, OMB A-136) over the past fewyears that are requiring more analysis and decision sup-port capabilities.”

• “Need to be able to take the data generated by the newsystems and answer ‘why,’ becoming an enabler to seniorlevel decision-makers.”

• “Shift to value-added information for decision-making.”• “PART (Program Assessment Rating Tool) and budgeting

forcing this need because you must explain outcomes andmeasures; responses to OMB and Hill questions requireanalysis skills.”

• “Providing management information (cost accounting).”All of the professional and administrative financial posi-

tions (for example, accountants, financial specialists, budgetanalysts) provide decision support. Survey respondentsindicated that people were being hired for those positions tomeet the need. For example, the Chief Financial Officers(CFO) Act of 1990 calls for the development and reportingof cost information. Statement of Federal Financial Account-ing Standards No. 4, Managerial Cost Accounting Conceptsand Standards for the Federal Government, further definesMCA, which involves the accumulation and analysis offinancial and nonfinancial data. GAO has found in a seriesof reports that uneven progress was found in implementingMCA.15 Meeting MCA requirements is one example of whyagencies need more people with analysis skills. Severalrespondents pointed to a move toward the more generalfinancial specialist (501) position, which provides staff sup-port for financial decisions as well as an alternative for hir-ing people without 24 hours of college credit in accounting.

Other studies have reported an increase in demand foranalysis and decision support capabilities. A 1996 report bythe Institute of Management Accountants found that overthe previous five to ten years, management accountantswere increasingly being asked to supplement their tradi-tional accounting role with more financial analysis andmanagement consulting.16

The Most Important CompetenciesA competency is a piece of knowledge, a skill or an abili-

ty that, when acquired, allows a person to perform a task

Figure 4: Shift in Federal Financial ManagementEmployment: Comparison of Professional and Administrative to Clerical and Technical Positions in September 1998 and March 2007

-10000

0

10000

20000

30000

40000

50000Non-ProfessionalProfessional

ChangeMar 07Sep 98

Source: Office of Personnel Management.




10

or function at a defined level of proficiency in a particulardiscipline. Core competencies serve as the foundation forjob classification, recruitment, selection, evaluation andtraining of staff, and thus serve as the basic building blockfor workforce planning. The JFMIP issued core competencydocuments for various disciplines involved in financialmanagement to help agencies identify the knowledge, skillsand abilities (KSAs) that those in federal financial manage-ment positions need to perform their functions effectively.These can be found at www.FSIO.gov.17

Survey respondents were asked to identify from amongthe JFMIP core competencies the most important competen-cies staff needs to support 21st-century federal financialmanagement. They were also asked which competencieswere lacking among those hired under each of the threemost populated professional and administrative financialmanagement job series.18

• Accountant (510)• Budget Analyst (560)• Management & Financial Analyst (343 and 501)Accountants (510):

The JFMIP core competency document for accountantslists 27 core competencies, grouped into seven categories.Employees occupying these positions participate in a broadrange of activities related to the accounting and budgetingpractices of their agencies. OPM standards require a mini-mum of 24 college credit hours of accounting courses toqualify for this position, in contrast to the financial special-ist (501) job series, which does not have this requirement.(The complete list of core competencies for accountants isshown in Appendix A, Survey Instrument.)

The top three competency categories survey respondentsselected were basic governmental accounting/operations,information technology and federal accounting (see Figure 5).

The importance of knowing the fundamentals of govern-mental accounting/operations and federal accounting is the

reason survey respondents cited for selecting the highestranked competencies, followed by the necessity of havingpeople with information technology skills in today’s worldof integrated financial management systems. A representa-tive listing of the rationale for selecting the top accountingcompetencies are:• “Knowledge of accounting and automation are most

important— must have core knowledge coming in or theskills are never obtained.”

• “As a CFO organization, the basic competencies relate toaccounting and financial reporting, including reporting tomanagement for operational requirements. Internal con-trols and analytical capability are critical componentsnecessary to provide the public and departmental man-agement with information that is usable for achievingdesired results and in which management will have con-fidence.”

• “Two most important categories—basic governmentaccounting/operations (including analytical skills) andgeneral skills (for example, communications). I can buildon these skills to develop a great federal accountant.”

• “Need fundamentals which can be built upon, for exam-ple, GAAP (Generally Accepted Accounting Principles)and internal control basics can be built upon for othertasks such as analysis and communications.”

• “Expert knowledge and analytical skills are paramount.Our financial statements are complex and diverse, requir-ing experience and skill in analysis and reporting.”

• “They need to understand the GAAP behind their trans-actions. They need to be IT (Information Technology)proficient—especially things like databases—they need tounderstand that in today’s competitive environment, youhave to be able to measure your performance against theagency’s strategic objectives, they need to understand theimportance of internal controls and lastly, the big push isfor audited financial statements so knowledge of finan-cial statements and preparation is critical.”When asked what top competencies their experienced

accountants lack, most frequent responses were as follows:• Written and oral communications, including writing

concisely.• Management controls and implementing guidance.• Analytical capability and business acumen to be able to

provide the right information at the right time.• Understanding basic budgetary and accounting concepts

and relationships.A representative listing of the comments made for select-

ing the top competencies that accountants lack are:• “Communication skills, oral and writing are needed to

present information; we must use contractors now to pre-pare the PAR (Performance and Accountability Report),for example.”

• “Analytical skills are usually the most lacking—account-ants are spending so much time trying to derive the whator the answer, that they can not figure out the why.”

Competencies for Accountants Rank

Number ofSurvey

Responses Basic Government Accounting/Operations 1 24

Information Technology 2 22

Federal Accounting 3 20

General Accounting 4 17

General/Leadership Skills 5 15

Planning, Budgeting, andAccountability/Business Practices 6 14

General Management 6 14

Figure 5: Top Competencies for Accountants

11January 2008

• “Budgetary reporting is definitely one of the weakerareas. We have incorporated Treasury’s tie point projectand OMB’s reporting relationship edits into a trainingsession.”

• “Internal controls; unfortunately, many people lack theskills to properly identify controls in our programprocesses and know when controls are missing.”

• “Federal accounting concepts and standards, includingcost accounting, basic techniques of financial manage-ment, economic analysis, management controls, auditingand program evaluation.”

Budget Analysts (560):The JFMIP core competency document for budget ana-

lysts lists 20 core competencies, grouped into three cate-gories. Employees occupying these positions participate in abroad range of activities related to the formulation, justifica-tion and execution of their agency’s budget. (The completelist of core competencies for budget analysts is shown inAppendix A, Survey Instrument.)

Figure 6 shows the top five competencies survey participants selected: • basic budget, accounting and program concepts. • agency systems for control of resources. • agency budget operations and processes. • effective oral and written communication. • basic techniques of budget and economic analysis.

Comparable to the responses for accountants, respon-dents identified the need for basic skills. For budget ana-lysts, that represents knowledge of basic budget conceptsand agency programs, and the ability to integrate them incompleting budget tasks. In addition, respondents identi-fied the need for a sound basis in general analytics andeffective oral and written communication skills to supportthe budget process. A representative listing of the rationalefor selecting the top competencies are as follows:• “Knowledge of and abilities essential in budget concepts

and presentation/justification competencies, especiallythose regarding agency systems and budget formula-tion/execution. Our budget analyst would not be able todo their jobs without these skills.”

• “Knowledge of federal budget execution is the mostimportant because this is a specialized area and theknowledge, skills and experience cannot be found in contractor staff.”

• “The skills to answer why the numbers are the way theyare, both during budget formulation and execution arecritical…they need to be able to provide managementwith analysis and recommendations to enable good decision support.”

• “The ability to integrate financial/budget formulationwith mission/programmatic content to enrich and informvalue-added consultation to decision-makers.”When surveyed about the top competencies budget ana-

lysts lack, respondents’ comments largely mirrored theirresponses about accountants. They most often cited: • Analytical capability necessary to evaluate and present

budget information.• Knowledge of an agency’s program operations and

processes.• Written and oral communications skills.• Knowledge of accounting systems and appropriations

law.Comments that indicate the rationale for selecting the top

competencies budget analysts lack are as follows:• “The biggest gap is being able to answer the ‘why’ a

number is the way it is. They do not know how to ana-lyze…budget analysts are not doing much analyzing inmy organization.”

• “Greater abilities are needed in written communications.”• “Sufficient knowledge and ability to interpret and apply

statutes, regulations…specific congressional mandatesincluded in the agency’s authorizing legislation, appro-priations acts and committee reports.”

• “Need additional strength in budget analysis; this will belargely achieved through on-the-job training, mentoringand course work.”

Management and Program Analysts (343) or Financial Specialists (501):

The JFMIP prepared a combined core competency document titled, “Financial Management for Management

Competencies for Budget Analysts Rank

Number ofSurvey

Responses Basic budget, accounting, and program concepts, principles and terminology 1 11

Agency system for the administrative control of resources, fund allocation, and fund control 2 9

Agency’s budget operations and processes and how obligations and expenditures are incurred for assigned program areas 2 9

Effective oral and written communication skills 2 9

Basic techniques of budget, financial, and economic analysis; good business practices; sound basis in general analytics 3 8

Figure 6: Top Competencies for Budget Analysts




12

Analysts and Financial Specialists,” which lists 18 core com-petencies, aligned into four categories. Employees occupy-ing these positions serve as the office “generalists,”participating in a broad range of activities related to thebudget and accounting practices of their agencies. (Thecomplete list of core competencies for this combined seriesis shown in Appendix A, Survey Instrument.)

Figure 7 shows the top four competencies identified bysurvey respondents: • basic budgeting, accounting and program concepts,

including agency budget procedures and its financialmanagement systems.

• basic techniques of financial management, economic analy-sis, internal controls, auditing and program evaluation.

• oral and written communication. • knowledge of basic missions, functions and organiza-

tional structure of the agency and its offices.Comparable to the responses for accountants and budget

analysts, knowing the basic budget and accounting con-cepts, agency programs, internal controls and having theability to analyze issues and conduct evaluations is therationale survey respondents cited for selecting the highestranked competencies. In addition, effective oral and writtencommunication skills are needed to present information in auseful way. A representative listing of the rationale forselecting the top competencies is:• “Understanding the organization that you are working

for—its mission, goals and objectives, how to strategicallyplan and align costs to meet these criteria, how to meas-ure performance, and how to communicate the processand progress are all key components to successful man-agement and financial analyst positions.”

• “Financial analysis, value added, ability to grasp andmake connections of people, process and systems.”

• “For the program/management series, the analytical ismost important; whereas for the financial specialist seriesthe computer applications and basic accounting conceptsare most important.”

• “Any CFO organization will require different skill sets foreach 343/501 position … I chose the more general com-petencies as the average set of important skills.”

In response to the question, “What top competencies doyour experienced management and financial analysts lack?”respondents provided answers similar to those regardingaccountants and budget analysts. The most frequentresponses were:• “Analytical capability, putting information into context.”• “Oral and written communications skills—particularly

written.”• “Knowledge of performance measures, cost accounting,

analysis, internal controls.”• “Knowledge of basic accounting principles and under-

standing account relationships.”Summary of Most Important Competencies

For all three job series evaluated, survey respondentsindicated the importance of having the basic knowledgeand skills in federal financial management and informationtechnology necessary to support each position, and the abil-ity to communicate information in a useful way to bettersupport decisions. Communication skills and analyticalcapabilities are competencies that survey respondents citemost often as missing.

Each of the three job series in the survey contain the com-petencies survey respondents value. JFMIP lists 27 corecompetencies for accountants, 20 for budget analysts, and18 for management and program analysts or financial ana-lysts (the combined core competency document). What isthe real issue? The 2003 JFMIP white paper stated that“financial management leadership should define a broaderfinancial management career concept to ensure thatadvancement is contingent on broad knowledge and experi-ence; restructure the position classification managementframework to support multi-skilled knowledge workers.”The current job series are broad and cover the competenciessurvey respondents valued.

We asked whether the current classification system meetsthe needs of agencies and 69 percent of survey respondentsanswered in the affirmative. Respondents who answered“no” and gave explanations said:• “The recruitment process is broken, not the classification.”• “In today’s financial management field, accountants need

to have a degree, not just 24 hours of accounting. The 510series should be revised accordingly.”

Competencies for Management Analysts and Financial Specialists Rank

Number ofSurvey

Responses Basic budgeting, accounting, and program concepts, principles and principles including agency budget procedures and itsfinancial management system(s) 1 20

Basic techniques of financial management, economic analysis, internal controls, auditing, and program evaluation 1 20

Oral and written communication 2 18

Knowledge of basic missions, functions, and organizational structure of the agency and its offices 3 14

Figure 7: Top Competencies for Management Analysts and Financial Specialists

13January 2008

• “Although the current position descriptions meet ourneeds, the recruiting and hiring process is cumbersomeand long and should be reengineered to improve our hir-ing efforts.”

• “Can live with the current system but there should besomething better.”

• “[There should be] some accounting specific positions sothat agencies can reach candidates with a specific set ofskills.”

• “[There should be] a private sector approach to pay andpositions to get the multifunctional financial managersdescribed above. Small agencies require more flexibility.”

• “The current job series available to choose from do notaddress today’s needs in our financial managementorganization. That is true for all grade levels but moretrue lately at the lower grade levels of GS-7/9.”

• “Pay banding would be helpful.”• “Current structure is based on old transaction processing

duties, dependent on contractors.”Recent College Graduates—The Most Important Competencies

Several recent AGA surveys have pointed to a lack oftraining in federal financial management at the collegelevel. One survey of accounting faculty found that theteaching of accounting standards for state and local govern-ments is considered the most important topic in govern-mental accounting education.19 Federal financialmanagement standards or competencies did not evenappear on the list of topics cited.

The survey results in Figure 8 indicate that recent collegegraduates hired by federal agencies lack key federal finan-cial management competencies. One reason may be inatten-tion to or lack of demand for federal competencies incollege accounting programs.

Can federal leaders expect colleges and universities toaddress the missing competencies in federal financial man-agement in the future? Recent research indicates that theycannot. An article published in the Journal of GovernmentFinancial Management points to a shortage of governmentaccounting Ph.D.s and a steep decline in the number ofaccounting doctoral graduates.20 With the “gurus” of gov-ernmental accounting retiring and fewer faculty with thebackground to teach federal financial management compe-tencies, federal agencies must assume that new collegegraduates will continue to enter the workforce unpreparedfor financial management work. Most colleges and universi-ties will focus on teaching students how to learn and not onindustry-specific training.Agency Training Programs

In an effort to identify how agencies are making up forcollege graduates’ lack of preparation for federal financialpositions, the survey included a question on what agencieswere doing to make up for the lack of major competencies.The survey found that 77 percent of the respondents areusing training programs. Agency training programs addressthe gaps in competencies for new and existing staff andimprove job retention. Typical features of these programsare:• Formal program with top-level support.• Developmental or gap assessment to guide training

program.• Multi-year program with periodic assessments and

feedback from participants.• Rotational assignments (on-the-job experience).• Classroom training, including orientation sessions.• Mentoring and/or buddy system.• Group sessions and/or projects.• Networking opportunities and exposure to agency

culture.

Competencies Response RankKnowledge of federal appropriations law 74% 1

Knowledge of the federal budget process 71% 2

Knowledge of federal generally accepted accounting principles 50% 3

Skill and ability in written and oral communication 41% 4

Knowledge of the U.S. Standard General Ledger and posting rules 38% 5

Knowledge of basic management control systems and processes 35% 6

Skill in basic cost and operations research analysis 35% 7

Skill and ability with modern, integrated Financial Management Systems 32% 8

Figure 8: Major Competencies That Recent College Graduates Need and Lack


AGA Corporate Partner Advisory Group Research14

• Program evaluation, including staff retention statisticsand participant surveys.Among the programs identified were:

• General Services Administration’s (GSA) Financial Management Specialist (FMS) Program

• Department of Defense Finance and Accounting Service’s(DFAS) Leaders In Motion (LIM) Program

• Department of Housing and Urban Development’s(HUD) Career Management Program (CMP)

• Department of Homeland Security’s Mentorship Program• Department of Homeland Security’s New Hire

Orientation• Government Accountability Office’s (GAO) Professional

Development Program (PDP)Performance indicators (retention rates, for example) for

a number of these programs point to very positive results. Ageneral description of the each program is listed below:

General Services Administration’s Financial Manage-ment Specialist Program—GSA administers the FMS pro-gram to support and maintain core financial managementexpertise and address changes in the workforce. The pro-gram uses the Federal Career Intern Program to hire finan-cial specialists (501) into the two-year program that involvesthree- to six-month rotational assignments through GSA’sfinancial organizations, classroom training in federal finan-cial management competencies, professional developmentassessment and training, and independent projects. A strate-gy for retaining graduates includes supporting tuition assis-tance, flexible and challenging work assignments andopportunities for promotion.

Department of Defense Finance and Accounting Service’sLeaders In Motion Program—DFAS runs the LIM programto recruit new financial talent to meet future demands,including moving from technician work to professionalwork and addressing demographic changes taking place.The initial focus of the program is hiring accountants (510)into a three-year internship that involves four six-monthrotations through various financial organizations in the firsttwo years and a work area assignment for the last year.Interns receive classroom training in federal financial man-agement competencies, attend conferences and meetings,and receive coaching and mentoring. Strategies for retentioninclude meaningful, challenging work assignments, person-al feedback from program coordinators, and participating indecisions about their career and permanent placement.

Department of Housing and Urban Development’s CareerManagement Program—HUD’s CFO office runs the CMPprogram to create a cadre of highly motivated “cross-busi-ness line” experts and a succession management pipeline.The focus of the two-year program is a series of rotationalassignments through all financial areas and educationalopportunities for a select number of current staff. The CMPincludes an orientation program, group learning projects,networking opportunities and a mentoring program.

Department of Homeland Security’s MentorshipProgram—The department’s CFO runs a mentorship pro-gram to develop a cadre of strong candidates for seniorfinancial management leadership positions. The programprovides participants with rotational assignments, formaltraining, assessments and development activities, whichsimultaneously support individuals’ professional develop-ment and strengthen the potential candidacy pool for futureCFOs/Deputy CFOs within the next two to three years.

Department of Homeland Security’s New Hire Orienta-tion—The CFO provides semi-annual, three-day orientationsessions for all new hires into financial management posi-tions within the CFO components. The compulsory sessionsprepare new hires for the financial management field byoffering an overview of the department as a whole and CFOfunctions specifically, references for common financial man-agement scenarios, a financial management fundamentalscourse, and several workshops addressing the varied ele-ments of financial management.

GAO’s Professional Development Program—GAO’s PDPconsists of formal and on-the-job training; regular feedbackand counseling; and exposure to different issues, engage-ment stages, methodologies and management styles. Inaddition to four rotational assignments over a two-yearperiod, new Band 1 analysts participate in the creation of anIndividual Development Plan, attend formal orientation ses-sions and speaker programs, shadow senior executive staff(including the managing director), maintain contact with apeer buddy/mentor and attend formal training. A bubble-matrix tracking document is used to summarize new staffwork experience and ensure competencies for analysts arecovered by rotational assignments and training.Need for Better Educated Workforce

In addition to the challenge of training new hires, thework of existing federal financial management staff ischanging. Technology and the increase in demand for moreanalytical and decision support skills are bringing to theforefront the need for training of existing financial staff.Integrated federal financial systems are driving changes inhow data is processed, stored and made available for making decisions. New systems also present different typesof control risks, which require mitigation through changesin control activities. In addition, new laws and regulationsplace additional requirements on the federal financial work-force. For example, the Chief Financial Officers Act of 1990(as amended by subsequent legislation) requires the prepa-ration of proprietary-based financial statements and bienni-al reviews of agency fees and other charges. Both of theserequirements drove the need to train agency financial staff,who continue to require training to keep up with changingstandards and practices. If the federal finance offices aremoving toward more of a partnership with program officesin providing value-added information to make decisions,then additional ongoing training of existing staff is crucialto support this cultural shift.

Other professions have addressed the need for continu-ing professional education (CPE) by requiring a minimum


15January 2008

number of CPEs on a biannual basis. For example, general-ly accepted government auditing standards require eachauditor to take 80 hours of CPE every two years.21 The fed-eral contracting job series (GS-1102) also requires 80 contin-uous learning points every two years to maintain theGS-1102 federal acquisitions certification.22 No such CPErequirement exists for the federal professional and adminis-trative financial workforce. The Certified GovernmentFinancial Manager (CGFM) certificate program sponsoredby AGA requires 80 hours of CPE every two years to main-tain the certificate, but this certificate is not required for fed-eral financial staff. Lacking a CPE requirement, the federalfinancial workforce is vulnerable to having inadequate oroutdated skills.

Lessons Learned and Best PracticesThe survey instrument asked respondents to cite any les-

sons learned or best practices they had noted regarding hir-ing and retaining the right people with the right skills.Examples cited were:• The human resources function in most federal govern-

ment agencies is not capable of meeting the requirementsof fast and efficient filling of vacancies, mandating train-ing and making it available for staff, or documenting thepending surge of retirements. Fortunately for Washing-ton, D.C.-based staff, training can be supplied by AGA,the Greater Washington Society of CPAs (GWSCPA), andother professional groups.

• One agency cited legislation passed in 2002 that hadallowed it to set up a pay parity program, which withsupplemental benefits such as dental benefits, allow theagency to compete with federal, public and private prac-tices in hiring and retaining the best workforce. Pay ishigher and benefits more attractive, thereby allowing it toattract and retain a highly qualified workforce.

• Use of temporary (120-day) jobs to bring in college stu-dents and other early career candidates, which has theadded benefit of bringing in a recruitment pool for full-time jobs.

• Summer-hire and intern programs.

Where Do We Go From Here?The survey confirms that a major change is taking place

in the federal financial management workforce. An urgentneed exists for adequate planning to handle this change.The results of this study indicate that the following recom-mendations will help push this process forward.

Develop a Federal Financial Management WorkforcePlanning Guide—A federal government-wide task force orcommittee should develop a Workforce Planning Guidethat is specific to federal financial management. The leader-ship for this should be at a high level, OMB or OPM. Theguide could use the generic models (for example, OPM,GAO) as a starting point, but to improve implementation itmust include examples of strategies now in use by federalfinancial managers to recruit, train and retain the federal

financial management staff that will be brought on boardwithin the next five to 10 years. The survey found a numberof good examples of workforce planning strategies, and animplementation guide with those and other strategieswould greatly assist agencies in completing this criticaltask.

Establish Incentives for Workforce Planning—Incentivesare needed to move workforce planning to the top ofagency CFO’s to-do lists. Performance indicators that recog-nize the importance of a complete workforce plan (forexample, a plan that contains the four common elementsnoted by GAO’s 2003 report) should be included in the rat-ings system to reward agencies for implementing innova-tive strategies for recruiting, training and retaining staff.Legislative solutions would also help, as noted on page 24in the Lessons Learned section.

Evaluate Requiring a Certification and a MinimumBiannual Number of CPE Hours—Keeping up with changesin technology, more demands for analytical and decisionsupport skills, and new laws and regulations require a long-term commitment by employees and management to con-tinuing professional education. One way other professions(auditing and acquisition, for example) have shown thiscommitment is requiring a certification or license thatincludes a requirement for the certificate or license holderto obtain a certain number of CPE hours over a one- or two-year period. The federal financial community needs to con-sider requiring CPEs for professional and administrativepositions, perhaps associated with a certification.

ConclusionThis report provides another glimpse into the changes

taking place in the federal financial management workforcein 2007 and confirms the trends identified in previousreports. The federal financial management workforce isbecoming more professionized. More people have compe-tencies focused on doing a better job supporting decision-making. However, there is no overall strategy for acquiringthe right people with the right skills for the right jobs.

Recent college graduates do not possess the competen-cies federal financial managers need to support fully theinformation required for decision support, and strategiesmust reflect this reality. There is no evidence that competen-cies specific to federal financial management (for example,knowledge of federal appropriations law or the budget) arelikely to be a part of a new college graduate’s skill set. As aresult, federal agencies must implement programs to fill inthe training gap for these new hires. Some agencies arealready doing so.

Workforce planning is lacking in the federal financialmanagement community. Technology, demographics andother factors are driving a major change in the workforce,and adequate workforce planning is urgently needed toimplement strategies that are effective in handling thischange. A Workforce Planning Guide specific to federalfinancial management is needed to help agencies develop


and implement the plans and incentives, including legisla-tive, necessary to push this process along.

These changes also require a long-term commitment byemployees and management to continuing professionaleducation. Mandatory certification and continuing profes-sional education for federal financial management profes-sionals, similar to what is in place for auditors andacquisition professionals, would enable agencies to ensurethat their workforce has up-to-date skills.

The implications are clear. Changes in the federal finan-cial management workforce will continue to take place.Without adequate planning and strategies to handle thesechanges, agencies will not be able to support adequatelyfuture financial decisions for the most complicated entity inthe world. If they fail, the result could be inefficiencies andineffectiveness on a grand scale, or a costly and perhapsinappropriate dependency on contract staff.

Editor’s Note: We see this research report as a startingpoint rather than an end point. The hope of the author,AGA, and Management Concepts is that this documentstimulates further discussion and, more important, actionon this critical issue.

End Notes1. Association of Government Accountants (AGA), AGA—The Leader in

Government Financial Management, Executive Session, White Paper, July2004, p. 4.

2. AGA, AGA—The Thought Leader in Government Financial Management,Executive Session, White Paper, July 2005, p. 4.

3. AGA, AGA—Addressing Challenges in Government Financial Manage-ment, Executive Session, White Paper, August 2006, p. 4.

4. Joint Financial Management Improvement Program (JFMIP), The Fed-eral Financial Management Workforce of the Future, September 2003, p. 9.

5. Government Accountability Office (GAO), High-Risk Series: AnUpdate, GAO-01-263, January 2001, pp. 18–19.

6. Office of Management and Budget (OMB), President’s ManagementAgenda, www.whitehouse.gov/omb, 2007.

7. GAO, Using Strategic Human Capital Management to Drive Transforma-tional Change, GAO-02-940T, July 15, 2002.

8. JFMIP, The Federal Financial Management Workforce of the Future, Sep-tember 2003, p. 7.

9. National Academy of Public Administration, a report by a work-group for the U.S. House of Representatives, Committee on GovernmentReform, Subcommittee on Governmental Management, Finance, andAccountability, Moving from Scorekeeper to Strategic Partner: Improving Finan-cial Management in the Federal Government, October 2006.

10. Office of Personnel Management (OPM), Issues in the Federal Work-force, Testimony before the House Appropriations Subcommittee on Finan-cial Services and General Government, March 6, 2007.

11. OPM, Human Capital Framework,www.opm.gov/workforceplanning/wfpmodel.htm, September 2005.

12. OPM, Human Capital Framework,www.opm.gov/workforceplanning/wfpmodel.htm, September 2005.

13. GAO, Effective Strategic Workforce Planning, GAO-04-39, December2003.

14. OPM, FedScope: Federal Human Resources Data,www.fedscope.opm.gov, July 2007.

15. GAO, Managerial Cost Accounting Practices, GAO-06-599R, GAO-06-301R, 2006.

16. Institute of Management Accountants, The Practice Analysis of Man-agement Accounting, 1996.

17. JFMIP, Core Competencies for Accountants and Budget Analysts in theFederal Government and Core Competencies in Financial Management for Man-agement Analysts and Financial Specialists, www.fsio.gov, 1998.

18. Those with the largest employment.

19. Gerald J. Miller, “Trends and Challenges in Governmental Account-ing Education,” Journal of Government Financial Management, Summer 2006.

20. Lee Schiffel and Kenneth Smith, “The Looming Crisis in Govern-mental Accounting Education,” Journal of Government FinancialManagement, Summer 2006.

21. GAO, Government Auditing Standards, GAO-07-731G, June 2007.

22. OMB, Office of Federal Procurement Policy, Developing and Managingthe Acquisition Workforce, Policy Letter 05-01, April 15, 2005.



17January 2008

APPENDIX A: ADVISORY GROUP MEMBERSDoris A. Chew, CGFM, CPA, Deputy Director, FinancialSystems Integration Office, U.S. General Services Adminis-tration

Christopher H. Flaggs, CPA, Deputy Chief Financial Officer, U.S. Department of State

Dale R. Geiger, DBA, CGFM, CPA, Clinical Professor ofManagement Accounting, University of Southern California

Jeffrey C. Steinhoff, CGFM, CPA, CFE, former ManagingDirector, Financial Management and Assurance, U.S. Government Accountability Office

David L. Norquist, Chief Financial Officer, U.S. Department of Homeland Security


APPENDIX B: SURVEY INSTRUMENT

18

AGA Survey on 21st Century Financial Managers: AreNew Competencies Required?

The Association of Government Accountants (AGA) isrequesting your assistance in an AGA Corporate PartnerAdvisory Group research project sponsored by CorporatePartner Management Concepts. The objective of the researchis to assess whether federal agencies now require or willrequire a financial workforce with a new mix of competen-cies and different educational backgrounds to work effec-tively. Your input is invaluable to us: without it, there can beno research results. We would be very grateful if you wouldcomplete the survey and submit it to us. Although there aremany questions in the survey, it should only take 30 minutesto complete.

Anonymity—AGA surveys like this one do not attributethoughts and quotations to individuals. This preservesanonymity and encourages individuals to speak freely.

I. Demographics Please provide the following information:

Name of Respondent

Title or Function

Federal Government Agency

Name of Respondent’s Bureau/Office/Service/etc.

Address

Phone

E-mail

Please select the type of organization that best reflects whereyou work.1. An Agency’s Central Office of Chief Financial Officer

(CFO)2. An Agency’s Central Staff Office outside CFO Office3. A CFO/Finance/Budget Office within one of an Agency’s

Programs4. An Office within one of an Agency’s Programs

Note: 75 percent of the survey responses were from agencylevel CFO offices and 23 percent were from CFO/Finance/Budget Offices within an agency’s programs. As a result, notenough information was available to distinguish responsesfor agency program offices.

What professional financial management positions do yousupervise or manage?

[ ] Financial Analyst (501)[ ] Financial Manager (505)[ ] Accountant (510)[ ] Budget Analyst (560)[ ] Management and Program Analyst (343)[ ] Miscellaneous & Program (301)[ ] Administrative Officer (341)Other (please specify)

How many professional financial staff work in your organi-zation (e.g., CFO Office, Program Office)?

II. Workforce PlanningIdentifying future Federal financial management work-

force requirements is difficult in the current changing envi-ronment. New technology, financial standards andexpectations are making the identification of future missiongoals a challenge.

The Government Accountability Office (GAO) has statedthat strategic workforce planning addresses two criticalneeds: (1) aligning an organization’s human capital programwith its current and emerging mission and programmaticgoals; and (2) developing long-term strategies for acquiringand retaining staff to achieve programmatic goals.

Workforce planning typically involves setting goals or lev-els of service for an organization, identifying the resources,including personnel competencies, required to meet thosegoals, establishing an inventory of competencies in the cur-rent workforce, identifying competency gaps in the work-force, and identifying strategies to transform a workforce tomeet the needs of the future. A competency is a combinationof knowledge, skills and abilities (KSA) in a particular disci-pline which, when acquired, allows a person to perform atask or function at a specific defined level of proficiency. Anumber of core competency documents have been preparedby the Joint Financial Management Improvement Program(JFMIP) that articulate the KSAs required for specific jobs(e.g., accountants, budget analysts, financial specialists andmanagement analysts).

1. Which statement best reflects the status of workforceplanning for your organization?

a. Workforce plans are prepared annually as part of anagency’s operating plans.

b. Workforce plans are prepared in support of the budget process, which typically covers two to three years.

c. Workforce plans are prepared in support of the strategicplanning process, which typically covers five or more years.

d. Workforce plans are not prepared, skip to question 6.e. Other (please specify, e.g., do not have access to this

information).

19January 2008

2. If your organization prepares workforce plans, pleaseanswer yes or no to the following statements. If you arenot sure of the answer, please enter unsure.

a. Workforce plans are based upon identified goals or services levels.

b. Workforce plan use core competency documents to identify the types of people required to meet goals or service levels.

c. Your organization maintains an inventory of competen-cies in the current workforce.

d. Workforce plans identify competency gaps.e. Workforce plans include retirement projections.

f. Workforce plans take into consideration planned changes in technology.

3. Highlight any noteworthy strategies that are being usedto transform your workforce to meet goals or service levelsand to help with the projected retirement surge.

4. Does your agency periodically reevaluate the types offinancial management competencies/job types required fora position and/or as personnel retire or leave? Pleaseanswer “yes” or “no.” If yes, please describe the process.

5. What is your level of direct involvement in workforceplanning in your organization?

[ ] I provide input[ ] I am a decision-maker[ ] I have no direct involvement

III. Workforce of the FutureIn September 2003, the Joint Financial Management

Improvement Program (JFMIP) issued a white paper: TheFederal Financial Management Workforce of the Future. Thewhite paper stated that the demands placed on the federalfinancial workforce are changing and the “workforcerequires examination of current skill mix and anticipation ofmethods for acquiring and developing a skill mix for thefuture.”

This section of the survey examines a number of issuesraised by the 2003 JFMIP White Paper.

6. Listed below are the major professional series (posi-tions) that support financial management. For the past fis-cal year (2006), please indicate the types of positions yourorganization has hired and whether the number of hires

has increased (I), decreased (D), or stayed about the same(S) from the prior year.

Financial Administration & Program (501) Financial Manager (505) Accounting (510) Budget Analysis (560) Management and Program Analyst (343) Administrative Officer (341) Miscellaneous & Program Series

Please describe briefly the reasons for any increases ordecreases (e.g., planned strategies that explain changes inyour organization’s hiring pattern).

Please list any other major financial management positionsthat support your organization and explain briefly the hiringplans for these positions.

7. Please answer this question if your organization hiresaccountants, otherwise skip to question 8.

The JFMIP issued core competency documents for variousdisciplines involved in financial management. These docu-ments may be found online at www.FSIO.gov. The JFMIPcore competency document for Accountants lists 27 corecompetencies, aligned into seven categories. Employeesoccupying these positions participate in a broad range ofactivities related to accounting and budgeting practices oftheir agencies. What top five competencies do your organi-zation’s accountants need most to do their jobs? Please selectthe top five competencies from the general categories listedbelow.General Accounting

[ ] Generally Accepted Accounting Principles (GAAP)and concepts

Federal Accounting[ ] Federal accounting concepts and standards, including

cost accounting[ ] Federal Financial Statements and Reports

Basic Government Accounting/Operations[ ] Missions, functions, and organizational structure of

the agency and its offices[ ] Mission and functions of central agencies such as

OMB, Treasury, GSA, and OPM and how they play in government operations

[ ] Agency accounting policies and procedures[ ] Public laws, executive orders, OMB circulars, bul-

letins, agency directives, CG decisions, and court opinions governing the agency’s management processes.

[ ] Audits and formal reviews



[ ] Management Controls (Internal Controls)Planning, Budgeting, and Accountability/Business

Practices[ ] Planning and Evaluating[ ] Specific agency/organization business practices[ ] Basic budgeting and program concepts and principles

including agency budget procedures and relationship with financial management system(s)

[ ] Structure of appropriations and other funds which support the agency’s mission

[ ] Agency budget execution operations and processes and how obligations and expenditures are incurred for assigned program areas

[ ] Current accounting issues and state-of-the-art devel-opments in resources management field; areas outside of the budget which have financial importance to the programs of the agency

General Management[ ] Basic techniques of financial management, economic

analysis, management controls, auditing, and pro-gram evaluation

[ ] Performance measures and analysis[ ] Generally accepted management principles and

practices[ ] Organizational development concepts and organiza-

tional analysis techniques, performance effectiveness concepts, productivity measurement and measure-ment systems

[ ] Federal procurement, contract management and grants management

[ ] Productivity improvement systems and business reengineering processes

Information Technology[ ] Basic personal computer applications[ ] Automated data processing concepts, tools, systems

and Internet capability[ ] Federal Financial Management System (FFMS); auto-

mated data systems development, documentation, and data administration policies, concepts, tools, and standards

[ ] Financial System’s FunctionalitiesGeneral/Leadership Skills

[ ] Written communications[ ] Oral communications[ ] Other Leadership skills (e.g., accountability, conflict

management, creativity and innovation, cultural awareness, customer service, decisiveness, entrepreneurship, flexibility, human resources management)

Please explain briefly your rationale for selection. Are thereone or two competency categories that you consider moreimportant?

What top competencies (as defined within the categoriesabove) do your experienced Accountants lack? Please listeach competency, and if applicable, describe briefly anyplans to provide training or development opportunities.

8. Please answer this question if your organization hiresbudget analysts, otherwise skip to question 9.

The JFMIP lists 20 core competencies for budget analysts,aligned into three categories. Employees occupying thesepositions participate in a broad range of activities related tothe formulation, justification, and execution or their agency’sbudget. What top five competencies do your organization’sbudget analysts need most to do their jobs? Please select thetop five competencies from the general categories listedbelow.Budget Concepts and Processes

[ ] Basic budget, accounting and program concepts, prin-ciples and terminology; Agency budget principles andprocedures and the agency’s financial management system

[ ] Nature, characteristics, applications and structure of appropriations and other funds that support accom-plishment of the agency’s mission

[ ] OMB and agency object classes, agency accounting code conventions, and document flow processes

[ ] Agency systems for the administrative control of resources, fund allocation and fund control, paperwork management, program objectives, inter and intra-agency reimbursable agreements and funding and financial reports

[ ] Agency’s budget operations and processes and how obligations and expenditures are incurred for assignedprogram areas

[ ] Laws regarding appropriated and other types of funds(i.e., reimbursable accounts, working capital funds, and loan funds) Revolving funds concepts, fee-for-service operations and privatization criteria

[ ] Budget formulation, presentation and execution con-cepts and processes; Current program and budget issues and state-of-the-art developments in the budgetfield; Key agency program policy and program per-formance issues

[ ] The federal budget preparation process as it applies tothe agency

[ ] The congressional budget and appropriations process


21January 2008

APPENDIX B: SURVEY INSTRUMENTBudget Presentation and Justification

[ ] Basic missions, functions and organizational structure of the agency and its offices

[ ] The impact that agencies such as OMB and OPM, and GSA have on agency operations

[ ] Assigned program/account areas[ ] Public laws, executive orders, OMB circulars and bul-

letins, and agency directives which govern the budget process for assigned program areas

[ ] Sufficient knowledge and ability to interpret and apply statutes, regulations, Comptroller General deci-sions, court opinions, and specific congressional man-dates included in the agency’s authorizing legislation, appropriation acts, and committee reports

[ ] Basic techniques of budget, financial and economic analysis; good business practices; sound basis in gen-eral analytics

General[ ] Ability to integrate the requirements of the Govern-

ment Performance Results Act into the budget process[ ] Mathematics and statistics[ ] Effective oral and written communication skills[ ] Information Technology[ ] Stress and time management

Please explain briefly your rationale for selection of the mostimportant competencies. Are there one or two competencycategories that you consider more important?

What top competencies (as defined within the categoriesabove) do your experienced budget analysts lack? Please listeach competency, and if applicable, describe briefly anyplans to provide training or development opportunities.

9. Please answer this question if your organization hiresmanagement and program analysts (343) or financial spe-cialists (501), otherwise skip to question 10.

The JFMIP prepared a combined core competency docu-ment for management and program analysts (343) and finan-cial specialists (501), which lists 18 competencies under fourgeneral categories. Employees occupying these positionsserve as the office “generalists,” participating in a broadrange of activities related to the budget and accounting prac-tices of their agencies. What top five competencies do yourorganization’s financial and management analysts need mostto do their jobs? Please select the top five competencies fromthe general categories listed below.

Basic Government Operations[ ] Knowledge of basic missions, functions, and

organizational structure of the agency and its offices[ ] The roles central agencies such as OMB, Treasury,

GSA and OPM play in government operations[ ] Public laws, executive orders, OMB circulars, bul-

letins, agency directives, Comptroller General deci-sions and court opinions governing the agency’s management processes

Planning, Budgeting and Accountability[ ] Strategic planning process[ ] Basic budgeting, accounting and program concepts

and principles including agency budget procedures and its financial management system(s)

[ ] Structure of appropriations and other funds which support the agency’s mission

[ ] Agency’s budget operations and processes and how obligations and expenditures are incurred for assignedprogram areas

[ ] Current program, budget, and accounting issues and state-of-the-art developments in resources manage-ment field; areas outside of the budget which have financial importance to the programs of the agency

[ ] The congressional appropriations and federal budget preparation processes as they apply to the agency

General Management[ ] Basic techniques of financial management, economic

analysis, internal controls, auditing and program eval-uation

[ ] Performance measures, cost accounting and analysis[ ] Generally accepted management principles and

practices[ ] Organizational development concepts and organiza-

tional analysis techniques, performance effectiveness concepts, productivity measurement and measure-ment system

[ ] Federal procurement, contract management and grants management

[ ] Productivity improvement systems and business reengineering processes

General[ ] Oral and written communication[ ] Basic computer applications[ ] Stress and time management techniques

Please explain briefly your rationale for selection of the mostimportant competencies. Are there one or two competencycategories that you consider more important?

What top competencies (as defined within the categoriesabove) do your experienced financial and management ana-lysts lack? Please list each competency, and if applicable,describe briefly any plans to provide training or develop-ment opportunities.

10. The 2003 JFMIP white paper stated that the federalfinancial management workforce will shift from transac-tion processing support to multi-skilled analysis anddecision-making. Specifically, “the workforce will need tobe more analytic and capable of providing decision sup-port information.” Please answer the following questions.a) Is your organization experiencing a decrease in the needfor people who process transactions? Please answer “yes”or “no.” If yes, please indicate briefly why.

b) Is your organization experiencing a greater demand forpeople with more analysis and decision support capabili-ties? Please answer “yes” or “no.” If yes, please indicatebriefly why.

11. If you answered yes to question 10 a) or b), please listthe types of positions (e.g., accountant, budget analyst,financial specialist, management and program analyst)that were filled to support more analysis and/or decisionsupport capabilities or abolished due to less transactionprocessing.

12. The OPM financial management workforce statisticsindicate that the number of “generalist” positions areincreasing. For example, the number of 501 positions(financial administration and program) is increasing at afar greater rate than 510 positions (accountant). Is yourorganization changing its mix of financial managementpositions? Please answer “yes” or “no.”

13. If you answered “yes” to question 12, please describebriefly the new mix of positions that your organizationhas put in place, is planning to put in place, or is neededto support your financial goals or service levels.

14. The 2003 JFMIP white paper stated that, “financialmanagement leadership should define a broader financialmanagement career concept to ensure that advancement iscontingent on broad knowledge and experience; restruc-ture the position classification and position managementframework to support multi-skilled knowledge workers.”Please answer “yes” or “no” to the following statement:the current position classification structure meets theneeds of our organization. If you answered “no” pleaseexplain briefly why.

15. Organizations are at different stages in addressingfinancial management strategic goals and the President’sManagement Agenda (PMA), which may impact the typeof workforce required. Thinking about your own organi-zation, select the statement below that best reflects yourorganization’s stage in achieving its goals.

[ ] Early stage of achieving goals[ ] Well along the way of achieving goals[ ] Nearly achieved goals[ ] Achieved all goals[ ] Other (please specify)

IV. Recent College GraduatesSeveral recent AGA surveys have pointed to a lack of train-ing in federal financial management at the college level.One survey indicated that Governmental Accounting Stan-dards Board (GASB) Statement No. 34, Basic Financial State-ments and Management’s Discussion and Analysis for State andLocal Governments, was the most important topic ingovernment accounting courses during the past five years.

16. What major competencies do recent college graduatesneed and lack? Select all that are appropriate.

[ ] Knowledge of General Accepted Accounting Principles (GAAP)

[ ] Knowledge of federal GAAP[ ] Knowledge of federal appropriations law[ ] Knowledge of the federal budget process[ ] Knowledge of the U.S. Standard General Ledger and

posting rules[ ] Knowledge of basic management control systems

and processes[ ] Basic computer skills[ ] Skill and ability with modern, integrated financial

management systems[ ] Ability to perform basic business process analysis[ ] Skill in basic cost and operations research analysis[ ] Skill and ability in written and oral communication



22

23January 2008

APPENDIX B: SURVEY INSTRUMENT[ ] Other (please specify)

17. Does your organization provide training in the compe-tencies and/or KSAs not typically present in recent collegegraduates (for example, internship, orientation program)?Please answer “yes” or “no.” If your answer is yes, pleasedescribe briefly the program offered.

18. Has your organization hired financial staff from publicadministration (non-financial oriented) departments orschools? Please answer “yes” or “no.” If your answer isyes, please describe how this strategy has worked for yourorganization.

V. Lessons Learned and Best Practices19. If you have a best practice or success story related toworkforce planning, the financial management workforceof the future, or recruitment and training of recent collegegraduates, please tell us about it here. For example, tell usabout any unique legislative authority that your organiza-tion has that aids in the management of your workforce.

Advancing Government Accountability

Association of Government Accountants

2208 Mount Vernon AvenueAlexandria, VA 22301

PH: 703.684.6931TF: 800.AGA.7211FX: 703.548.9367

[email protected]

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