Lonely at the Top: The Expanding Role of the Government CFO

How do you make the most of the influence you hold in the public sector?

The modern-day government Chief Financial Officer performs responsibilities far beyond finance. A typical CFO oversees budget, accounting, and financial reporting, but often has other operational functions within his or her span of control including procurement, grants administration, human resources, physical infrastructure and often IT.

If you are leading the CFO office during times of change or crisis—a major debt issuance, changes in executive leadership, political upheaval, a revenue downturn or even a global pandemic—the job becomes more complicated. More importantly, your sphere of influence expands. Yours is a demanding role full of tough decisions. And it can certainly be lonely at the top.

How do you make the most of your responsibilities? What are the levers of influence, the tools that make you more effective and the strategies for deploying your best people in the most critical positions?

CFO Advisory: A Framework for Effective Performance

One burgeoning trend is for CFOs to look outside the organization for expertise and assistance – not only for executive coaching, but also to create tools and frameworks to deploy in the organization to enhance performance. We have found some common needs:

• Budgeting Tools: The annual budget on its face is a planning document, but it is also a political document, a resource allocation strategy, a priority list, and a financial record. The CFO must maintain and develop a responsible budget while pleasing multiple constituencies.
• Cash Flow: Depending on your jurisdiction, you may have total control over your cash flow, or it may be imposed upon you by multiple authorities. Regardless, your ability to balance tax and fee collections, government aid, competitive grants and other revenue sources in concert with delivering critical services is the lifeblood of your organization.
• Vendor Negotiation: Every organization relies on key vendors. Macro-economic cycle depends on it. It is your responsibility to ensure that you are getting the most value from your vendors. As changes are made to your funding, operations and delivery of services, these will in turn run downstream to your vendors. The key is that vendor relationships must be mutually beneficial to be effective, if you squeeze too hard the value will disappear.
• Efficiency Measures/Performance Indicators: Is your organization operating efficiently and delivering services effectively? How do you know (and relative to what)? Researching best practices, benchmarking operational success and creating key performance indicators can provide new insights to improve your operations. 
• Assessments: Your organization may need a fresh perspective from an outside party. Carefully executed organizational and IT assessments can help you identify breakdowns and facilitate breakthroughs.
• Succession Planning: Short-term business disruptions often re-arrange personnel assignments and give managers insights into the staff members who are adaptable to change and prepared for larger roles and assignments. But in the longer term, at each level of the organization – all the way up to the CFO’s office – have you identified employees who can be promoted into higher positions of authority and replace their current supervisors? In addition, do you have employees with the individual traits and skills necessary for your future success? 
• Due Diligence/Valuation: Not all agencies engage in transactions that require deliberate due diligence and in some cases complex valuations. But when they do—a land sale or acquisition, market lease, expansion of a physical plant—having the right expertise on your side is essential to prudent financial stewardship.
• Solution Roadmaps: Everyone in your organization knows when a technology application is doing more harm than good. But then what? Replacement or upgrade plans can be time-consuming, complicated, and often do not lead to the right solution. Creating a solution roadmap, outside of presumed assumptions and cultural biases, can be the difference between contentment and frustration.
• Data Analytics: Across responsibilities, practical analysis of data can inform good decision-making. In many government organizations, the “tyranny of data” buries users under thousands of pages that provide no useful information. Mining your current data for what is insightful and essential and then presenting that information in a dashboard or control panel format can help you take back control over the arduous process of finding the right information at the right time.

At Weaver, our CFO Advisory Services practice can create a package of services that can make your day-to-day operations flow more seamlessly, leaving you time for more strategic activities. We would also welcome the opportunity to consult on your thorniest problems and toughest environments, perhaps giving you a fresh perspective and a new path to success. For more information, contact us.

Authored by Alyssa Martin, CPA, and Adam Jones. 

© 2020