GovernmentExecutive.com

Technological and demographic changes are driving a major shift in the federal financial management workforce, and agencies must do a better job preparing for future needs, according to a study conducted by the Association of Government Accountants and Management Concepts, a Washington-based professional services firm.

"The mix of federal financial management positions is changing: clerical and technical positions are decreasing and professional and administrative positions are increasing," the report found.

The report, "21st Century Federal Financial Managers: A New Mix of Skills and Educational Levels?" said technology has reduced reliance on manual processes and remaining positions require a better-educated workforce.

Specifically, the report cites increasing demand for people able to provide analysis that supports executive decision-making. The need stems from new reporting requirements from the Office of Management and Budget and pressure from lawmakers to provide program outcomes and measures. "All three major federal financial management positions -- accountant, budget analyst, and management and financial analyst --require analytical and decision-support competencies," the report noted.

While agencies are conducting workforce planning, most are failing to identify competency gaps and develop strategies to make sure they have enough people with the right skills -- and they won't be able to count on recent college graduates filling the gap. The study found that schools generally are not teaching basic federal budgeting, accounting and program concepts, and college graduates often lack understanding of federal appropriations law and the government's accounting and budget process.

Among the study's recommendations:

• Develop a comprehensive plan for improving the financial management workforce.
• Introduce incentives to move workforce planning forward.
• Establish continuing education requirements for both professional and administrative positions in financial management (as is now the case for federal auditors).
• Urge the National Association of State Boards of Accountancy and the American Institute of Certified Public Accountants to include questions about federal accounting on the certified public accountant examination. This would encourage colleges and universities to include a "federal accounting 101" course in their curriculum.

Anna Miller, the association's director of research, said, "This report is of particular importance given the magnitude of the anticipated problem." The Office of Personnel Management estimates that about 60 percent of federal workers will be eligible to retire in the next 10 years.

Although agencies have focused broadly on the potential impact a wave of retirements may have during the next decade, they need to focus more on what that may mean in the realm of financial management.

"A mass retirement of experienced managers could leave an agency with an inadequate workforce and thus vulnerable to mission failure. What is true for human capital management in general is also true for the federal financial management workforce," the report said.

"We must act if we are to avoid compromising standards of accountability and transparency to taxpayers," Miller said.

COMMENTS

• Fomerly, I worked in the goernment finance area but due to circumstances outside my control I no longer do and now work in a program type position. Nothing new has really been presented here. However, the proposal to have a Federal Government 101 course in Accounting Programs is new, along with courses in Federal Appropriations Law and Budgeting. To my knowledge there is no school in the country that offers such courses including those in the D.C area. In the current Governmental Course that students take, federal government Accounting might be included in the course, in that both Federal and State & Local Accounting follow the same general principle, that is that accounting is done on a fund basis, with each different fund being accounted for independently, and most government funds in the end have the same objective, that profit is not their main motivation, but having fund revenues meet the funds expenses. EMPLOYEE Posted May 20, 2008 3:11 PM
• I'm having trouble understanding the comments that government accounting is different that corporate accounting. Then I remembered that in gov't 2 + 2 doesn't equal 4 it might = 3 or 6 or 19. The most ridiclous examples are "gov't savings" the last awards banquet recognized 10 folks who had saved the gov't $20 BILLION, that in a nutshell is the problem with gov't accounting Dan ketter Posted May 20, 2008 1:20 PM
• The study does make a good job of identifying a future (current?) gap but the solution is not valid in my opinion. Accounting majors and CPAs armed with government accoutning 101 will only know the basics of government accounting, this will not make them good financial decision makers. CPAs exist primarily to satisfy external reporting and the law. Would not a CMA be more appropriate certification if we are looking to move beyond reporting and get to a level of financial discipline, accountability and efficiency? Also, college graduates cannot step into a highly polictical and rule-bound environment of government financial management and expect to be effective in getting the most bang for the buck. Financial reporting can be taught in the classroom; good analysis in comes with experience and higher level understanding than 101 level classes. My proposed solution: Key finacial positions should have an MBA as well as CMA and CDFM certifications. David Posted May 20, 2008 11:35 AM