New Competencies Needed for Financial Management
In today’s rapidly changing financial landscape, financial management professionals in federal agencies must possess new competencies and skills to navigate complex financial systems, regulations, and laws. In this blog, we will explore the new competencies needed for financial management in federal agencies and the principles of federal appropriations law.
Competencies Needed for Financial Management in Federal Agencies
Below are some of the most important competencies required for financial management in federal agencies.
Strategic Planning
Federal financial management professionals must be able to develop strategic financial plans that align with the agency’s goals and objectives. This includes forecasting budgets, identifying funding sources, and allocating resources effectively. They must also be able to evaluate the performance of financial operations and adjust strategies as needed.
Leadership
Effective financial management professionals must possess strong leadership skills. They must provide direction, set goals, and motivate their team to achieve desired results. They must also be able to lead change and be innovative in their approach to financial management.
GPRA Implementation
The Government Performance and Results Act (GPRA) requires federal agencies to develop strategic plans and annual performance reports. Financial management professionals must be able to integrate financial management with performance management, including developing performance measures, tracking financial results, and reporting on financial performance.
Budget Formulation
Federal financial management professionals must be able to develop and justify the agency’s budget request. This includes understanding the agency’s programs and activities, identifying funding needs, and developing funding requests that align with the agency’s priorities.
Budget Justification
Federal financial management professionals must be able to develop clear, concise, and accurate budget justifications that explain the agency’s funding requests. They must also be able to provide detailed information on the agency’s programs and activities and demonstrate how they align with the agency’s strategic goals and objectives.
Budget Execution
Federal financial management professionals must be able to manage the execution of the agency’s budget, including monitoring spending, tracking obligations and expenditures, and identifying and addressing budget variances.
Federal Government Accounting
Federal financial management professionals must have a thorough understanding of federal government accounting. They must be familiar with the unique accounting principles, concepts, and standards that govern federal financial reporting. This includes knowledge of federal accounting principles, such as the Statements of Federal Financial Accounting Standards (SFFAS). Some of the main principles of federal government accounting include:
- Purpose:Appropriations must be used for the purpose they were appropriated.
- Time:Appropriations are available for a specific period, usually one fiscal year.
- Amount:Appropriations are limited to a specific amount of money.
- Source:Appropriations must be used for the purpose for which they were appropriated and from the source designated by Congress.
- Control:Appropriations must be controlled by the agency head or an authorized official.
CFO Act
The Chief Financial Officers (CFO) Act requires federal agencies to establish and maintain effective financial management systems. This includes developing and implementing financial management policies and procedures, conducting financial management training, and ensuring compliance with applicable laws and regulations.
Customer Orientation/Service
Financial management professionals must have a customer-focused mindset. They must understand the needs of their customers, both internal and external, and be able to provide excellent service. They must also build strong relationships with customers, suppliers, and other stakeholders.
Organizational Theory
Financial management professionals must be knowledgeable about organizational theory and design. They must understand the structure and culture of their agency and how financial management fits within that structure. They must also be able to identify opportunities for improvement and make recommendations to enhance organizational effectiveness.
Decision Making
Financial management professionals must be skilled in decision-making. They must be able to analyze complex financial data and make informed decisions based on that data. They must also balance competing priorities and make sound financial decisions in the agency’s best interest.
Public Relations
Financial management professionals must have excellent public relations skills. They must communicate effectively with the public, media, and other stakeholders. They must also be able to manage the agency’s reputation and ensure that financial management practices are transparent and accountable.
Performance-Based Budgeting
Financial management professionals must be able to develop and implement performance-based budgeting. They must be able to align budgets with agency goals and objectives and ensure that resources are allocated to achieve desired outcomes. They must also be able to measure performance and adjust budget priorities as needed.
Program Evaluation
Financial management professionals must be skilled in program evaluation. They must be able to evaluate the effectiveness of agency programs and make recommendations for improvement. They must also be able to measure the return on investment for programs and ensure that resources are used efficiently.
Cost-Benefit Analysis
Financial management professionals must be able to perform a cost-benefit analysis. They must be able to analyze the costs and benefits of various financial management strategies and make recommendations based on that analysis. They must also be able to identify opportunities to reduce costs and increase efficiency.
Cost Accounting
Cost accounting is a critical competency for financial management professionals in federal agencies. They must be able to analyze and manage costs associated with government programs and operations. This includes knowledge of the Federal Acquisition Regulation (FAR) and cost accounting standards.
Federal Auditing Standards
Financial management professionals in federal agencies must be familiar with federal auditing standards. They must be able to design and implement internal controls to ensure compliance with these standards. This includes knowledge of the Generally Accepted Government Auditing Standards (GAGAS) and the Office of Management and Budget (OMB) Circular A-123.
Creative Thinking
Financial management professionals in federal agencies must be able to think creatively and develop innovative solutions to financial challenges. This includes the ability to identify opportunities for cost savings and process improvements.
Problem-Solving
Problem-solving skills are essential for financial management professionals in federal agencies. They must be able to identify and address financial issues, such as fraud, waste, and abuse. This includes investigating and resolving financial discrepancies and implementing corrective actions.
Individual Effectiveness
Financial management professionals in federal agencies must be able to work effectively as individuals and as part of a team. This includes communicating clearly, collaborating with others, and managing time and resources effectively.
Capital Programming Guide (OMB Circular A-11, Part 3)
The Capital Programming Guide (CPG) is a vital resource for financial management professionals in federal agencies. The CPG is part of the Office of Management and Budget’s (OMB) Circular A-11, Part 3, which guides the development and execution of capital planning and investment control (CPIC) processes. Federal financial management professionals must be familiar with the CPG and its requirements for developing and implementing CPIC processes that align with agency goals and objectives.
Federal Procurement
Federal procurement is a complex process that requires financial management professionals to be well-versed in procurement laws, regulations, and policies. They must also develop effective procurement strategies that align with agency goals and objectives. Procurement decisions must be based on sound financial principles, such as cost-benefit analysis and return on investment.
Financial Systems Requirements
Federal financial management professionals must be able to identify and implement financial systems that meet agency requirements and comply with federal regulations. They must be familiar with the Federal Financial Management Improvement Act (FFMIA) and the financial systems requirements outlined in the OMB Circular A-123. They must also be able to evaluate the performance of financial systems and make recommendations for improvements.
Financial Reporting
Financial reporting is a critical component of federal financial management. Financial management professionals must be able to produce accurate and timely financial reports that comply with federal regulations and provide meaningful information to agency stakeholders. They must be able to implement the necessary controls and processes to ensure the accuracy and reliability of financial reports.
Contract Management
Contract management is a complex process that requires financial management professionals to be well-versed in federal procurement laws, regulations, and policies. They must also develop effective contract management strategies that align with agency goals and objectives. Contract management decisions must be based on sound financial principles, such as cost-benefit analysis and return on investment.
Conclusion
The rapidly changing financial landscape requires new competencies for financial management professionals in federal agencies. Federal financial management professionals can help ensure federal agencies’ financial stability and success by developing and refining these competencies.
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