CFO Model December 2007
-
Upload
oleg-barnett -
Category
Documents
-
view
33 -
download
1
description
Transcript of CFO Model December 2007
CFO Model
December 2007
Bill MatthewsA/Executive DirectorGovernment Accounting and PolicyOffice of the Comptroller General
2
Context and BackgroundBudget 2004• “Re-establish the Office of the Comptroller General of Canada to
rigorously oversee all government spending.
• Appoint professionally accredited comptrollers to sign off on all new spending initiatives in every government department.
– “The appointment of departmental comptrollers will be subject to approval of the Comptroller General” and, “Departmental Comptrollers will also have a functional reporting relationship to the Comptroller General”;
– Professional certification standards for departmental comptrollers will be established before the end of the year and these standards are to be met by departmental senior financial officers within three years.”
• The Government is moving forward to audit all annual financial statements of departments and agencies within five years.”
3
Context and BackgroundSenior Financial Officers (SFOs) in medium to large departments
• The role of the SFO has taken many different forms – “general administrator“, “chief accountant” or “CFO”.
• Uneven focus on financial management. Potential conflict of interest • Uneven qualifications and professional background in financial management and
reporting• Uneven organizational positioning and authority vis-à-vis Program delivery
organization• Lack of preparedness to deliver annual departmental audited financial
statements• Lack of back up capacity and succession • Over extended and stretched
Senior Full-time Financial Officers (SFFOs) in medium to large departments and SFOs in Small departments and Agencies
• Uneven qualifications and professional background in financial management and reporting
• Uneven level of readiness for “executive table” • Lack of back-up capacity and succession
4
The Vision
Performing a Corporate Services / Administration role and the breadth of related activities (e.g. Finance, HR, IM/IT Administration, etc,)
Focusing on full spectrum of financial management, and the associated depth of knowledge and understanding, as a full-time “seasoned” business and financial executive
Limited delegation of authorities to departments by TBS
Greater delegation of authorities to departments by TBSFrom
Focusing on short and medium term needs of the organization
Focusing on short and longer term needs of the organization from a strategic perspective.
From
From
To
To
To
5
The Vision
• Multi-tier, risk based approach for all organizations under functional direction of Office of Comptroller General
• Criteria for segmentation:– Size of managed cash-flows (revenue, expenses and capital
expenditures)
– Accounting value of assets and liabilities under management
– Complexities of operations (e.g. geographic distribution, decentralized management, stability of organization/operations)
– Inherent risks ( e.g. extensive use G&C)
• 3-Tier model:
Tier 1 20-25 largest and most complex organizations – Initial target — 80-90% of expenditures
Tier 2
15 -20 medium size departments
Tier 3all others
6
The Vision
Responsibilities of departmental CFOs • Full spectrum of financial management (short-term and long-term)
– Planning, budgeting and forecasting – Accounting and reporting, internal and external ( financial and
performance)– Financial Management policies and internal controls– Financial analysis, monitoring and challenge– Departmental financial systems– Investments
• Analysis of business case of opportunities • Sign-offs and recommendation for approval by Deputy Head• Subsequent on-going monitoring of implementation
– Budget integrity– Value for money monitoring (e.g. via program evaluations)
7
Related Initiatives
• Other related initiatives increase the “business case”– External audit committees;– Accounting officer model;– Audited departmental financial statements;– Internal control certification;– Quarterly financial statements?– Accrual Based Appropriations?;
• Views of OAG and Public Accounts Committee
8
Keys to Success
• Unequivocal support from deputy head • appropriately classified - peer around the department's
senior management table. • appropriately qualified - experience, knowledge,
personal attributes• resource the organization through appropriate
classifications • CFO needs to be a member of all key departmental
governance mechanisms. • departmental stewardship functions should be
consolidated within the CFO's organization.
9
Potential Obstacles
• Finding qualified candidates;– Now; and– Developing Future CFO’s
• Credibility – get the basics correct;
• Overburdening the function;
• Reporting relationships;
• “Phone Finance”; and
• Communication barriers
10
Impact on the CFO
Must ensure fundamentals of FM are in place
Raised the bar – Combination of strategic business and financial advice for decision-making
Increased demands and expectations from senior management
Renewed commitment to enhance training and development of employees
Change management leadership
Concerted efforts to align and work in partnership with OCG and finance community
11
Impact on the Finance Community
Finance Community will be expected to support the CFOs/DMs by: Acting as objective, strategic advisors – business and
finance
Playing challenge function within department Not to stop things but to make them work
Integrating financial and non-financial information
Providing fearless advice to senior management
Developing new skills and adaptation to new culture
Continuous learning
12
Conclusions
• More than just a title;• Can be a driver for positive culture
change;• Feasibility challenges given resource
shortages;• Policy not in place but expectations of
parliamentarians are clear.