The AGA Weblog

Help Build Recovery.gov: White House Looking for Solutions to Effective Recovery Reporting

By: Jennifer Dorn

 

Jennifer Dorn is the President and CEO of the National Academy of Public Administration

 

On his first full day in office, President Obama made the statement that “a democracy requires accountability, and accountability requires transparency.”  As members of AGA, an organization dedicated to supporting government finance professionals throughout the public, private, and academic sectors, you know better than most that accountability and transparency are critical to good government.  You also know that providing the needed level of transparency and accountability associated with the American Recovery and Reinvestment Act of 2009 is a complex and ongoing management challenge. 

 

In response to President Obama’s call to action, the team working to stand up Recovery.gov needs your help.  To disperse, track, and report on the funds associated with the Recovery Act—especially with unprecedented levels of transparency and accountability—requires systems that can gather, understand, and display information about widely distributed funds that are owned by various entities, stored in different formats, and gathered with varying levels of detail. 

 

To help meet this challenge, the Recovery Accountability and Transparency Board asked the National Academy to host a week-long online dialogue soliciting ideas from a broad range of external stakeholders, including state and local partners, IT solution providers, thought leaders, and vendors and consumers in the IT community. The initiative, called a Recovery Dialogue on IT Solutions, provides the public with an opportunity to submit, discuss and vote on the best ideas for standing up Recovery.gov—a critical element of our economic recovery. 

The voice of AGA’s membership is critically important to this discussion.  While much of the discussion is focused on IT solutions, there is no community more familiar with the fundamentals of accountability at all levels of government than you. The Recovery Board is turning to you for innovative suggestions about tracking one of the largest and most urgently needed appropriations of funds in our government’s history.

Already, more than 700 users have submitted more than 200 totally unique ideas. The Dialogue is live until Sunday evening, May 3, 2009.  Please take some time today to participate in the dialogue both by sharing your ideas and approaches, and equally as important, by aggressively reviewing and providing comments and ratings for the ideas that have already been posted.  Your engagement in this Dialogue will enable the Recovery Board to clearly identify and be informed by the best ideas and approaches. 

 

Visit www.thenationaldialogue.org to make sure that your important voice is added to the discussion!

 

 

The Changing Bar for Government Accountability and Transparency

By: Jeff Steinhoff, CGFM, CPA, CFE

Jeff Steinhoff, CGFM, CPA, CFE, is an AGA Past National President and a director with KPMG LLP.

Federal financial managers and their state and local counterparts would be well-advised to begin contemplating the prospect that the accountability and transparency guidelines in the American Recovery and Reinvestment Act (Recovery Act) may eventually expand to cover all federal spending. Underlying the Recovery Act are five accountability and transparency objectives

• Funds are to be awarded and distributed in a prompt, fair and reasonable manner.
• The recipients and uses of all funds are to be transparent to the public, and the public benefit of this spending is to be reported clearly, accurately and in a timely manner.
• Funds are to be used for authorized purposes, and instances of fraud, waste, error and abuse are to be mitigated.
• Projects funded under the Recovery Act are to avoid unnecessary delays and cost overruns.
• Program goals are to be achieved, including specific program outcomes and improved results on broader economic indicators.

You might be asking, “Aren’t these objectives on their face just straightforward good fiduciary concepts?” “What is new here?” Yes, I would certainly agree that the five accountability and transparency objectives do represent basic good government concepts. I do not believe you would get much argument on that point. But what is being asked for is different in construct and focus, with the President of the United States leading the charge on the requirement for essentially real-time public reporting. 

In a April 3, 2009, memorandum, the second installment of government-wide guidance for carrying out the Recovery Act, OMB Director Peter Orszag expanded on the president’s commitment to accountability and transparency, in speaking about transparent, merit-based decision-making; long-term public benefits of Recovery Act spending by optimizing economic and programmatic results; and targeting assistance with other policy goals, such as support to small business.

The requirement for public reporting on Recovery.gov builds on the requirement for public reporting of grants and contracts at USAspending.gov under the Federal Financial Accountability and Transparency Ac,t for which then Senator Obama was a co-sponsor. Coupled with that is the more than $300 million set aside for oversight by the Recovery Act Accountability and Transparency Board, the federal inspectors feneral, and the Government Accountability Office (GAO). For example, GAO has a continuous audit presence in the field in 16 states, with bimonthly GAO status reports on state and local use of Recovery Act funds. 

The Recovery Act contains significant agency and program reporting requirements and the expectation of accessible and visible data that is complete, reliable and real time. The Recovery Act implementing guidance from OMB now totals more than 200 pages. The Recovery Act has potential impacts on government financial management systems, internal control and the administrative control of appropriations. Requirements include the need for meaningful performance measures and continuous performance monitoring. There is an expectation that fraud, waste and abuse is managed up front and mitigated.

The Recovery Act is intergovernmental in nature, given the large sums provided to state and local governments. Also, the Act reaches to the sub-recipient subcontractor levels. Under the Recovery Act, all levels of government receiving stimulus money should be prepared to publicly defend the prudence of projects. The vice president has made clear that anyone using stimulus money for wasteful projects will be publicly called out by the administration. 

A concern about what constitutes an acceptable project was voiced at a National Academy of Public Administration panel on “The Stimulus and Intergovernmental Management: Accountability on the Line,” which I participated in on March 31.  Participants were unanimous in calling for streamlined approval processes and clear guidelines about what projects are considered acceptable. State and local governments clearly don’t want to be left hanging, wondering if they are proceeding properly. Also, how does one weigh the need to get the money out quickly to stimulate the economy versus the need for prudence in project and program planning, contracting and internal control?

Over time, the answer to these and other questions should emerge. There will undoubtedly be some trial and error and a number of lessons learned. Program and financial managers at all levels of government will need to sort things out and to identify what works and what does not work and make refinements accordingly.

Have you considered the following questions with respect to your organization?

• Do you believe the Recovery Act’s requirements for accountability and transparency may eventually expand to all federal dollars so that details on all federal spending is similarly made available through a publicly accessible Web portal, and are you preparing for this possibility?
• If so, how do you envision this impacting state and local governments, grantees and contractors?
• What are your thoughts on the current capacity of the government financial management community to handle the accountability and transparency requirements of the Recovery Act in terms of processes, systems and people and what can be done to address any current shortfalls?

This essay represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG LLP.

 

Think Big! Act Courageously! Make a Difference! AGA = Leadership!

By: William A. (Billy) Morehead, Ph.D., CGFM, CPA

William A. (Billy) Morehead, Ph.D., CGFM, CPA, is chair, Division of Accountancy, CIS, and Finance, 

Delta 

State 

University and AGA National President-Elect

As I have traveled around the country visiting chapters, I am reminded of the important role I play as a leader in AGA. Steven Covey says: “Leadership is a choice; not a position.” Therefore, I am reminded—Leadership is NOT about me; it is about YOU—our members! Leadership in AGA is also about the citizens we serve in our respective governmental entities.

As a leader, I see that part of my role is to gauge the pulse of our organization and her members. This past week, I came face to face with a few members who have lost their jobs due to layoffs within state government. I’m sure there are others. Despite this occurrence, one particular AGA member’s optimism was amazing and worth noting. He had a “can do” attitude. He was not going to allow this set back to derail his or his family’s life—he has been immediately moving on and forward to what is next for him and his career. It apears he will “land on his feet” with another good job as several AGA members are recommending him for other government financial management jobs in his area. This early careers member is an excellent example someone who is “Thinking Big!” and “Acting Courageously!” This local chapter is also noted for “Making a Difference!” by rallying around her members. 

I found another chapter which has been paying the dues for members who have lost their jobs or who cannot make the payment themselves due to the personal impact of the economic crisis. This chapters has stepped up to the plate and is “Making a Difference!” in the lives of her members.

Another chapter I visited was raising monies through a community service raffle. These funds were headed to purchase school supplies for a deserving K-12 school in their state. This chapter has done this service event for several years and has provided over $10,000 in school supplies to various schools throughout their state. This chapter has moved to the “front of the class” and is “Making a Difference!” in the lives of children in their state.

AGA is Leading in ARRA by focusing on our members and our citizens! Over the past three months, we have been and are working fast and furiously to stay on top of the ARRA of 2009 to keep you and our governmental entities informed of the ever evolving volume of information regarding the stimulus money. Check the AGA website for frequent updates. By doing so, we support you, the entities you are responsible for, and the citizens of our respective governments. AGA is raising the flag of accountability over these funds; AGA is “Acting Couragously!” and “Making a Difference!”

Today, April 27, 2009, marks the beginning of the Third Annual Habitat for Humanity week in New Orleans sponsored by AGA. I appreciate those AGA members from around the country who have unselfishly taken time off from their jobs, given up part of their retirement schedules, and used their own financial resources to join New Orleans and Baton Rouge AGA members and others as they provide sweat equity to help individuals they don’t know build a place to call “home”. This is another group of AGA members who are “Making a Difference!”

I could go on and on—many of you are doing remarkable and noteworthy tasks around the country. I’m aware of various initiatives of others throughout AGA who are working diligently in academia, federal, state, and local governments, and private sector government financial management firms to “Make a Difference!” 

You make me proud to be a member and an AGA leader!

To each of you, I simply say, “THANK YOU!”

 

Economic Stimulus and Internal Controls

By: Robert Maitner 

Robert Maitner is a senior managing consultant with IBM.

In response to current economic challenges, we have seen major action on the part of our government, starting with the Troubled Asset Relief Program (TARP) in late 2008 and the American Recovery and Relief Act of 2009 (ARRA) this past February. These efforts have been designed to prop up the ailing banking system and stimulate economic growth nationwide. Both of these initiatives infused several hundred billion dollars into the American economy, ending up in the hands of both government entities and commercial enterprises alike.

In December of 2008, the Government Accountability Office (GAO) issued a finding that the Treasury had not developed adequate internal controls over the use of TARP funds. More recently, however, in March, the GAO reported that Treasury was making progress in the establishment of an internal controls program for TARP. What about the ARRA? A quick search of the final legislation reveals no direct reference to internal controls. What efforts are in place to ensure that an adequate internal controls program under the ARRA will be included with the enormous sums of money going to state and local governments as well as private businesses? This may be more difficult to assess given that much of the money will be used outside of direct control of the federal government.

In a Feb. 18, 2009, memorandum from the Office of Management and Budget (OMB), Director Peter Orszag issued initial implementing guidance for the ARRA of 2009. In particular, the memorandum discusses risk management requirements for agencies receiving ARRA funds, and indicates that risk mitigation actions must, at a minimum, address:

• Audits and investigation of Recovery Act funds to identify and prevent wasteful spending and minimize waste, fraud, and abuse;
• Qualified personnel overseeing Recovery Act funds;
• Competitive awards maximized;
• Timely award of dollars;
• Timely expenditure of dollars;
• Cost overruns minimized; and
• Improper payments minimized.

We know that at the state and local levels, entities receiving funds through the economic stimulus plan will need to develop accurate tracking and reporting mechanisms as well as internal controls procedures. The guidance from the OMB emphasizes that the stimulus package “will require sustained focus by managers throughout the federal government, particularly in planning, awarding, managing, and overseeing contracts and grants.” Agencies are going to be required to establish significant and effective internal controls, oversight mechanisms, and other approaches to meet the accountability objectives of the act. Agencies also need to review their internal controls in the area of proper authorization for expenditure disbursement. 

Local governments are beginning to establish internal control procedures for the proper oversight of ARRA funds. The state of Oregon, for example, has developed an internal controls “tool kit” to prevent instances of fraud, waste and abuse relative to the use of ARRA money. And the GAO issued guidance on sample controls that should be considered, and include:

• Validating data used in decision-making against other government or third party sources;
• Whenever possible inspecting information to confirm its validity prior to payment;
• Conducting system edit checks to identify problems before payments are made; and
• Training staff on fraud awareness. 

As the ARRA funds continue to be disbursed and begin to impact programs at all levels of government, there will no doubt continue to be increased scrutiny that these funds are being used for their intended purposes and that adequate oversight and control measures are in place.

What are your thoughts?

Making Elephants Dance

By: Sunil Datt, MS, MBA, MA, CGFM, PMP

Sunil Datt, MS, MBA, MA, CGFM, PMP, is Senior Managing Consultant, IBM Global Business Services.

I was dreaming. The President had appointed me Chief Performance Officer (CPO). Finally, in my life, I had reached the C level (C for Czar)! As efficiency is one of the hallmarks of performance, I immediately set about examining the dimensions of the problems, so that I could sort them out in the next one, two or four years, and retire in glory.

As I looked at the numbers, my heart started doing a funny number of its own. There are about 2.73 million Federal Civilian employees, as per the Census Bureau, as of December 2007, with an annual payroll of about $180 billion.

Notes to Self:

1. What about Defense employees? Performance measures?
2. Data is as of December 2007? System seems to have reporting issues? Then how will I measure performance improvements in, what now appears like, a short tenure?
3. Don’t panic. Stay calm.

Let us look at state and local government numbers. After all, they have to perform too, right?

Holy mackerel! There are almost 16 million FTE there, with an annual payroll of about $768 billion!

Notes to Self:

1. Stay calm.
2. Don’t look at the problem as one big mass. Break it down into manageable parts. Like by different organizations etc.

There are almost 600 federal departments, agencies, commissions, bureaus, boards etc.

So will I have to think of different performance measures for each? How can the National Science Foundation have the same performance measures as the Department of Homeland Security? Of course not dummy. That is why they already have the Government Performance and Results Act (GPRA) for goal-setting and measurement at the agency level, and the program Assessment Rating Tool (PART) for doing the same thing at the Program level. So let me see how all these federal organizations have been performing. There must be a website where it is all available. Everything is on the web nowadays.

Five days later, and I still haven’t found that one website which pulls it all together. Looks like I have to go to every agency, commission, bureau separately. This tenure thing is becoming a real constraint. May be I should ask my predecessor how he/she did it. Oh no, how could I forget? I have no predecessor, I am the first CPO! My heart swells with pride, and then deflates with fear!

Notes to Self:

1. DON’T PANIC
2. Need to ask for lots of staff; deputies, and assistant deputies. Otherwise, all my time will go looking at websites; really short tenure as CPO.

This state and local government thing is still bothering me. There are so many of them, all over the place, literally. And I am sure there is no standard performance management methodology that they are all following. Really, this is beyond my jurisdiction. But…it really is the bigger elephant of the two; difficult to ignore. Ah yes! It is for GASB to take care of state and local stuff. If I remember correctly, they are working on some voluntary effort for Service Efforts and Accomplishments (SEA) reporting.

Note to Self:

1. Do not mention state and local government issues to President, unless he asks himself.
2. Political minefield.

So now the real issue is, how is the linkage established between the individual performance of an employee and the performance of a program or agency? Because, if every one of those 2.73 million federal employees, and 16 million state and local employees becomes more productive, more aligned to the organizational goal, more enthusiastic, we could have a revolution right here. The recession would become a minor painful memory!

If I remember right, the GAO did a study of six pilots in 1998 (GAO-GGD-98-162). Gosh, a decade has gone by in a blink! A couple of the challenges reported were employees ‘gaming’ the system to look better than they really were, and the necessity of a ‘cultural’ change across the organization. This culture thing always bothered me. Don’t know why but it reminds me of the Mayan and Indian cultures, things that took hundreds of years to gel, and then vanished instead of adapting.

Note to Self:

1. Leave the culture thing to the President. After all, he said he would ‘Set the Tone’.
2. Initiate six new pilots to see how we can establish the link between individual performance and agency performance.
3. Mention to president that four year tenure too short for teaching elephants to dance.

Morning after, to my friends at the water cooler: It really was a strange dream. I really liked the being the CPO. But can you help me make the elephants dance?

 

 

 

 

 

Transparency? Yes. Accountability? Heading in that Direction!

By: William W. Kilmartin, CGFM, and Mark H. Howard

William W. Kilmartin, CGFM, and Mark H. Howard are directors with Accenture.

With President Obama’s election has come a greater use of the phrases ‘transparency’ and ‘accountability’ in government performance. Those words have been thrown around even more as ARRA funding has been legislated and now distributed. But, what really do they mean and are we seeing it happen?

There has clearly been an explosion among state governments, in particular, of websites that say they offer both ‘transparency’ and ‘accountability.’ If you have not seen it, this is one of the best single jumping-off points to all of those sites that we’ve found : http://www.transparent-gov.com/Pages/default.aspx.

Most of these sites certainly offer a wealth of information, most of it focused on relatively simple questions such as expenditures by agencies, revenues by source, and what vendors have been awarded what contracts. However, in all that disclosure of detail exists a large question—we know where the money went, but what did we actually achieve with it? We call this the ‘so what?’ factor.

Don’t get us wrong—if you’re going to truly increase accountability to focus on performance and results, you have to start by demonstrating where the money has actually gone. So, the ‘transparency’ explosion we’re seeing is certainly an important step. This is a necessary but not sufficient condition for successfully accomplishing accountability.

We believe the time is now for U.S. governments to get serious about doing more than reporting who got paid what. It’s time to also say what that spending was supposed to deliver, in terms citizens care about, and report whether that’s actually happened. That type of reporting is truly ‘accountability.’

What are your thoughts?

All aTwitter?—The Utilization of Social Networking by Public and Nonprofit Managers in an Economic Recession

By: Sara R. Dickson, MPA candidate, BS/BA, AS/BA

Sara R. Dickson, MPA candidate, BS/BA, AS/BA, is currently serving as special events coordinator for the National Newspaper Association. She has served as a legislator assistant for the Missouri House of Representatives, administrative assistant and Veterans Certifying Official for Columbia College—Jefferson City.

Working at a Rapid Pace

Downsizing, rightsizing, layoffs and cutbacks… in times of recession, all sectors (private, public and nonprofit) are at a higher risk for experiencing a reduction in employees. However, unlike the private sector—where if demand drops, supply eventually drops and it is plainly understood that the company will simply cease to exist—in the public and nonprofit sectors, the job must go on. The public expects, and rightfully so, to continue to be served as long as the department or organization is funded and administratively charged with a mission. Yet, those who survive and remain often find their job description expanded to include the tasks of those who are no longer employed. Practical training, association memberships and trade publications are vital to effective and efficient public service, but with departmental budget cuts, often these areas get slashed first. This effectively removes public/nonprofit managers from their wide spectrum of information network loops, leaving them overworked and in a silo of whatever limited forms of communication and training are spared from the chopping block.

Further, negotiating budget cutbacks is often out of the question or ineffective (for the nonprofit, donors may be overtapped) and this leaves these public and nonprofit administrators searching for any and all free or inexpensive tools that are available to aid busy government/nonprofit professionals. They need fast, effective tools to connect with peers, colleagues, donors, volunteers and constituents, keep abreast of new regulations and legislation, and to keep a watchful eye open for job opportunities, should their job be eliminated next.

In the Private Sector, Social Media is Becoming Increasingly Important

Here’s an example drawn from the private sector: CPAs should find some comfort in the expanding role that social media is playing and its significance in today’s professional (albeit private) networks. According to a recent report by CPATrendlines’ Rick Telberg (president and chief executive of Bay Street Group LLC), it is becoming increasingly important for CPAs to be informed of the various forms of social media available to reach potential employees and clients. In order to obtain an insider’s perspective, Telberg interviewed Tom Hood, chief executive of the Maryland Association of CPAs, and shares the following guide incorporating Hood’s advice regarding “the new world of social media for CPAs”:

• LinkedIn is a professional’s version of Facebook, a social networking site for business professionals and groups. Hood calls it a great place to start as CPAs. It works on the “six degrees of separation” concept. Hood’s network has 229 “trusted connections,” 25,000 second-level connections (friends of friends), and 2,057,400 third-degree connections.
• Plaxo is another business and professional network much like LinkedIn. It’s a great way of keeping up with changes in people’s contact information and current activities. Both Plaxo and LinkedIn provide a method for CPAs to exchange referrals and recommendations, which Hood calls “a very useful application.”
• Facebook, long the preeminent application for college students, is fast going mainstream. “I am seeing many CPA firms and employers using Facebook to reach the college student community,” Hood says. “There are also business groups and many other ‘social’ uses of Facebook for many areas of special interest.”
• MySpace has evolved into mainly a high school and music social networking site. Hood sees less use for CPAs on this site than any of the others.
• Twitter, the micro-blogging site, asks “what are you working on?” and your answer has to be in 140 characters or less. Hood says, “I have made more valuable connections on this tool than any other. I have also found a vibrant community of CPAs, CFOs, regulatory watchers, and others who provide amazing insights and information about a lot of important accounting topics. Did you know the SEC is on Twitter? That certainly got my attention.”

According to their website, CPATrendlines has more than 400 people “following them” on Twitter. That’s a substantial number.

The Public Sector Should Consider Pros and Cons of Social Media and Plan a Gradual Transition

The public and nonprofit sector is in the infancy stage of recognizing there is such a thing as social media and has not yet discovered or set down best practices for its use. However, it is still important for public and nonprofit managers to consider how they might best implement such a tool for enhanced communication, transparency and outreach between the agency and its staff, volunteers, clients and the public. It is a good idea to first perform a cost-benefit analysis and then plan a gradual transition. The current trend suggested by many advertising and marketing publications is to use a mix of traditional and social media to reach consumers/clients with the agency’s message. It is also important to recognize there is a massive shift toward low-cost marketing campaigns (namely, e-mail) that are causing electronic communications to lose their effectiveness in communicating with the public due to the flood of communications competing for the recipient’s attention. 

Final Thoughts and Questions

There are many potential negative and positive externalities (costs) involved with social media implementation in your agency/organization: 

·      How much time will be spent on social networking that is not job-related? How can or should this be monitored/measured?

·      What are the rules of proper etiquette in this new dimension of cyberspace? If a “friend” request is ignored, what are the personal and professional ramifications for government employees?

·      What is the policy impact of using the tool of social media for public agencies? (that is, legal ramifications, privacy violations, inappropriate release of confidential information)

Other thoughts? Ideas?

This essay represents the views of the author only, and does not necessarily represent the views of the National Newspaper Association or any other entity.

Federal Accounting Standards-Setting Process: Stacked Against the Public

By: Sheila Weinberg

Sheila Weinberg is the CEO for the Institute for Truth in Accounting.

Thomas Jefferson once said, “An informed electorate is the basis of a sound democracy.” To be knowledgeable participants in their government, the public must be given relevant, accurate, objective and understandable information. At the core of such information are unbiased accounting standards. The heart of these standards is the standard-setting body. The soul of this body is independence. The information reported, using these standards, must not be skewed to the advantage of elected officials, their appointees and employees, or any political entities. The selection of Federal Accounting Standards Advisory Board (FASAB or the board) members and the procedures used to set standards must facilitate this neutrality and objectivity.

Many question the FASAB’s independence. Significant political consequences may result from the information reported on the federal financial statements. The board exists as a part of an agreement among its three principals, the Secretary of the Treasury, the director of the Office of Management and Budget (OMB) and the head of the Government Accountability Office. These principals are appointed to their positions by elected officials. The FASAB has 10 members; four federal members who are employed by elected officials and six “public” members, who are appointed by the three principals. Because most of the principals and federal members of the board hold their positions based upon their relationship to elected officials, they have a vested interest in the content and format of the financial information reported to the voting public. There is a clear conflict of interest for the federal government employees placing them in an awkward and untenable position when considering decisions that can have a direct or even indirect impact on their agencies. And, virtually all the FASAB decisions have a direct impact on the federal members’ employers. This is especially true with the accounting standard for Social Security, Medicare and other social insurance programs, which the FASAB is in the process of re-evaluating.

During the deliberations of the social insurance standard, my apprehension about the board’s independence was heightened. In the fall of 2006 the FASAB issued a Preliminary Views document on accounting for Social Security, Medicare and other social insurance programs. All six public members of this board agreed that a social insurance liability should appear on the federal balance sheet and a corresponding expense should appear on the “income statement.”

Usually when such a consensus is reached, the board issues an Exposure Draft for public review. It appears that the Preliminary Views document was issued as a part of a stall technique. It appears that the people in the federal government do not want sunlight to be shed on the fact that last year’s federal deficit was not $452 billion as reported in budget documents or $1 trillion deficit as reported on the federal income statement. The true deficit was more than $5 trillion if social insurance costs were reported properly. The process seems to have been stalled until new members could be appointed to the board. Since the fall of 2006 three of the six “public” or non-federal members have left the FASAB. New members were appointed by FASAB’s three principals. Two of the three new board members are former deputy controllers at OMB. These two new board members also represented that agency on the FASAB.

In November 2008 an Exposure Draft on accounting for social insurance was issued and a public hearing on the Exposure Draft was held. With the new members, the board has switched its position and is now proposing a standard that would not report the social insurance liability as a liability on the balance sheet or a social insurance expense on the federal income statement. 

This seems like a form of jury tampering—the deliberate attempt to influence the composition and/or decisions of a jury during the course of a trial to get a desired outcome. Jury tampering undermines the public confidence in the deliberation process, the verdict and the whole judicial system.

The influencing of the FASAB’s composition and the attempt to influence the social insurance accounting decision has left me with little confidence in their standard-setting process and the final social insurance standard that will be issued. Such tampering leaving me questioning the whole federal government financial reporting system and the information it produces. It is very disheartening to know that this process is stacked against the most important constituents of the federal financial information—WE, THE PEOPLE. To read my complete FASAB testimony, please go to the federal section of the Truth in Accounting website.

I'd like to hear your thoughts on this issue.

Whether You're Ready or Not, We're Millennial-Bound: Recruiting and Motivating Today's Millennial Generation

By: Andrew C. Lewis, CGFM, CPA 

Andrew C. Lewis, CGFM, CPA, is the former primary campus recruiter for the audit and tax practices of KPMG’s Washington, D.C., area offices, and is a senior manager with KPMG LLP’s government audit practice. In addition, he is an adjunct professor in the Masters of Accountancy program at The George Washington University.

RU ready 4 us? (“Are you ready for us?”) 

As the title of this article says, the Millennial generation (commonly defined as those born after 1980) is an active and growing portion of today’s work force. With the Baby Boomer generation rapidly facing retirement, today’s workplace is facing new challenges in adjusting recruiting, retention and morale programs to appeal to the new generation of professionals.

KPMG makes it a strategic business priority to attract the best and the brightest and the firm recognizes the importance of the Millennial generation. That’s why it has developed several highly effective recruiting and career development initiatives aimed directly at attracting and retaining this generation of workers. For example, KPMG has:

• expanded global assignments, so that many younger professionals can gain international experience earlier in their careers;
• created a culture of flexibility, so people can fulfill their job responsibilities and address personal obligations in ways that achieve work/life balance; and
• launched an Employee Career Architecture website where professionals can get online information and advice on the best steps they can take to advance their careers.

In light of this, what can your agency do to recruit and motivate today’s Millennial generation? Some ideas include:

• Emphasize public service—The draw to be part of something bigger and more meaningful is a chord that runs deep in the Millennial generation. Does your agency have ways to position itself as having a broad impact on the country, or affects deeper social or societal issues? At a recent college career fair, one federal agency had done a superb job of using a tag line that focused on global travel and global impact. I was amazed to see how many college students lined up for that booth.
• Provide meaning to assignments—When asking a new professional to take on a new responsibility, do your supervisors describe the role in terms of how it will support the agency’s mission or the overall project’s objective? In addition, does your agency allow new professionals to take charge of their assignment and show autonomy in determining the task’s outcomes and objectives?
• Offer rotational opportunities—A common urge of the Millennial generation is to ‘see it all and do it all.’ Does your agency’s human resources office and other program officials have a rotational program with other offices? Such a rotation program could provide exposure and a deeper understanding of your agency among your new professionals, and could help to develop leadership and professional skills. I’m aware of one federal agency that offers its new professionals a position in its accounting office, but promises extended rotations in the budget and contracting offices, and the opportunity to work directly for program officials in an analyst capacity. At the end of the rotation, the new professionals can ‘declare’ a career track for permanent placement.
• Promote workplace flexibility—Federal agencies offer a benefit that’s rare in the public sector: the opportunity to work alternative schedules early in one’s career. What are some ways that your agency emphasizes its flexibility associated with hours and work location? Also, Millennials are generally looking for recognition from their employers that there is more to life than working. Are there any additional programs can you offer to your new professionals?
• Provide opportunities to network with all levels—The expectation to interact and be mentored by upper management is a common one among Millennials. What ways does your agency allow your employees to network with one another? Have you created opportunities for your new professionals to meet and interact with the head of your agency or your agency’s senior management? I’m aware of one federal agency that has a routine “brown bag” luncheon series that focuses on current topics facing the agency. But, more important, the luncheon series is sponsored by the agency’s senior management and offers a great chance for new professionals to sit down with senior management and learn from their careers. In addition, it’s not just about interacting with senior management. New professionals want to meet each other! Does your agency have programs in place to identify and sponsor ways for your new professionals to interact and network with one another? 
• Integrate technology into the workplace (or ask them for ideas how!)—The Millennial generation has routinely used technology to learn, study, socialize and relax. When preparing a workplace for a generation that’s so inter-connected with technology, what ways does your agency make technology available in your workplace? For those agencies that aren’t sure how to further integrate technology into your processes, have you considered asking your new professionals to help find automated solutions? 

Recruiting and motivating the Millennial generation is going to cause some drastic shifts in how our workplaces interact. But, it’s important for us to share those ideas as we face them as a government accounting community.

So, I ask again, what can or does your agency do to recruit and motivate today’s Millennial generation?

This essay represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG LLP. 

Has the Federal Government Created an Embarrassment Waiting to Happen?

By: Harold I. Steinberg, CGFM, CPA

Harold I. Steinberg, CGFM, CPA, is the technical consultant for AGA’s Certificate of Excellence in Accountability Reporting Program.

I recently attended a meeting at the National Academy of Public Administration (NAPA) on the American Recovery and Reinvestment Act. The first speaker was an OMB staffer who explained the guidance OMB is providing the agencies for the distribution of the monies and the subsequent reporting of how the monies are spent. OMB appears to be requesting a ton of information, more for transparency than for control. What struck me was that, as to be suspected, the OMB staff person was bright, articulate and knowledgeable. But he was very young and relatively new to government. He also said he is the sole OMB staff working on the Act.

The next speakers were the heads of the Governors, State Budget Officers, County, City, and City and County Management associations. They discussed their principals’ needs, expectations, concerns, etc.  Some horror stories were told. For instance, although the goal is to have the monies spent as soon as practicable, a recent memo extolling “prudence” has the Federal Highway Administration (FHA) conducting reviews of state government proposals for the placement of highways, whereas heretofore the FHA basically accepted the states’ decisions.

The last speaker was the GAO staffer who is heading GAO’s effort, mandated in the Act, to review and report bi-monthly on the use of the funds by selected states and localities. In describing, in great detail, how the monitoring will be done, he mentioned discussions had already been held with the Recovery Accountability and Transparency Board (established by the Act to coordinate and conduct oversight of recovery funds to prevent fraud, waste and abuse), the inspector generals, the state auditors and the local government auditors. It struck me that there is already a network in place, that is, the inspector general community and the Intergovernmental Audit Forums, ready to conduct a robust oversight of the Act's implementation.

The bottom line is that in the desire to assure accountability (the companion to transparency), the government will have more persons auditing and investigating the functioning of the Act, than managing its implementation. The Act designated more than $250 million for the Government Accountability Office, Recovery Accountability and Transparency Board, and Offices of Inspector General to audit and investigate, yet hardly anything to manage the expenditure of the $787 billion.

The Act’s purposes are noble. But if the $787 billion is to be spent absent fraud, waste and abuse, and the public is to know that the Act’s the purposes have been met, certain things are needed. 

The first is accounting systems that process and record the disbursements efficiently, accurately and in a timely manner. The problem here is the capacity of the existing infrastructure to handle the huge increase in transactions, particularly since the personnel and systems are already bending under the weight of ever-increasing processing and reporting requirements. Think about the Department of Energy systems and personnel that currently process a budget of approximately $26 billion a year. The Recovery Act requires them to disburse an additional $40 billion without any increase in personnel. 

The second is controls, to assure the monies are used wisely and only for the purposes intended in the legislation. The major risk here is that in the desire to assure the money is used only to promote economic recovery and for investments that promote long-term economic benefits and increase economic efficiency, too many controls are injected.

The third is reporting, supposedly to assure transparency. Transparency, however, is not an end in itself. Transparency does not require a file dump. Transparency is a tool to assure accountability. The information required for transparency entails striking a balance between the value of the information and the risk of seeking too much.

The last, and maybe the most important thing, is determination of results. How effective were the programs on which the monies were spent?  Were they the best choice?  Answering these questions requires that people make decisions about the metrics and then specify, announce and use the metrics.

Two hundred and fifty million dollars is a lot of money for finding problems. Ironically, absent adequate attention to the four elements of accounting, controls, reporting and determining performance, $250 million won’t be needed. The scandals and misuses of funds will be as visible as the cherry blossoms around the Tidal Basin.

This administration’s mantras are “Don’t waste a crisis” and “Invest in the future.” Wouldn’t it have made more sense to take the $250 million and use the economic meltdown as the reason to build the management capacities to properly spend the Recovery Act monies, and then use those capacities to continue to serve the government’s management needs?