The AGA Weblog

The Role of an Educator in Professional Development

By: Thomas G. Amyot, CGFM, CPA, CIA

Thomas G. Amyot, CGFM, CPA, CIA, a member of AGA’s New York Capital Chapter, was employed by the New York State Comptroller’s Office for more than 30 years at various levels as an auditor. For the past 11 years, he has been employed by the College of Saint Rose as a faculty member in the School of Business, teaching a variety of accounting courses at both the undergraduate and graduate levels. Tom retired from the College as of June 30, 2008. He is the recipient of AGA’s 2008 National Educator Award.

Professional development can take a variety of forms, depending on the needs of the recipients of the presentations and the needs of the organization employing them.

We are all aware that professional development is a requirement for employees in an audit organization that follows the Yellow Book. This can be met in a variety of ways—classroom-type instruction limited to employees, more open enrollment-type courses and conferences such as AGA’s PDC. The goal of this training is to develop or enhance the skills of the auditors so they can do their work more effectively and efficiently.

From my own experience, I would like to share with you one approach that was used to develop an organization-wide training program. To best organize the training, we had to determine what common skills and attributes we wanted the auditors at each level in the organization to have. Obviously, the needs of entry-level auditors differed significantly from the needs of the in-charge or supervisory auditors. Once we identified the skills and attributes, we were able to design courses that had the learning objectives we needed. This gave us a base of courses that we had to either develop or otherwise acquire and that would serve as the foundation of our annual training plan. To allow flexibility in the plan, we also allowed the staff to identify courses that they felt would be valuable to them. These requests were evaluated and in most cases were approved.

Once implemented, we were then able to re-use those courses that worked or modify those that we or the attendees determined needed modification and offered them in following years as the auditors progressed through the ranks. We were always cognizant of the need to keep the material current and to appropriately mix the technical material with the softer skills such as writing, supervising and managing. The goal throughout the program was to develop an audit staff that was technically competent and was introduced to skills they would need as they moved through the ranks.

In the academic environment where I have been for the past 11 years, I always stressed to my students that the accounting field is very dynamic. I would refer them to number of FASB and GASB statements to show them that accounting is not a staid profession, but one that is ripe for continuing development and provides a viable opportunity for those who wish to be successful in this field. Likewise, the professional standards, whether through the Yellow Book, PCAOB, AICPA or other professional standards require a commitment to continuous learning. In my teaching experience, I have found that students related very well to the examples from my work experience that I used to illustrate various instructional points.

Also, I would call their attention to news articles or other current events that illustrated topics that we were discussing in class. This also reinforced to them the need to be current with what was going on in the world. This was especially valuable as we went through the Enron debacle and similar events that put our profession in a less than favorable light with the public. I also recall some words that our college president used at commencement exercises where he would remind the students that the classroom work was done, but learning is a lifelong task that must be embraced by those who wish to be successful. One other benefit that I found from teaching was that my use of experiences from my audit career caused some of my students to choose or consider government accounting or auditing as a career. Prior to my time as a faculty member, this point of view did not exist on our faculty.

I would pose the following questions for your consideration:

a. how do your training experiences aid your professional growth?

b. can you relate current events to your own professional knowledge and skills?

TOMORROW: Happy Independence Day!

MONDAY: Julie Brenman, Director of Strategic Initiatives, City of Durham, NC

Small Agencies Benefit from the CEAR Program

By: James B. Lockhart

James B. Lockhart is Director of the Office of Federal Housing Enterprise Oversight (OFHEO)

This spring we received great news. OFHEO submitted its 2007 Performance and Accountability Report (PAR) to AGA and received the Certificate of Excellence in Accountability Reporting (CEAR) Award for the first time. With 10 straight years of clean audit opinions and the third PAR behind us, OFHEO decided to ask for the AGA review. Publishing the PAR is an opportunity to showcase what we do, what we accomplish and how we are benefiting the nation. Receiving the award is a validation of OFHEO’s results and core values—integrity, independence, professionalism and accountability. Our team who developed the PAR were thrilled that AGA recognized the agency. According to the AGA news release, PARs receiving the CEAR demonstrate “the highest standards of clarity in communicating financial information and demonstrating accountability.” We are extremely proud of that distinction.

At OFHEO, we take seriously our mission—“to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac (“Enterprises”).” These $5 trillion mortgage giants had significant accounting problems. We have been supervising their remediation, which culminated in their issuance in February 2008 of timely financial statements for the first time in four years. The CEAR award shows that we have helped lead by example.

OFHEO is an agency with a small budget of $66 million. Given what has happened to the mortgage market over the last year, our mission has become even more critical to the American economy. With all the turmoil in the mortgage markets, the Enterprises’ market share over the last two years has doubled to 68 percent of all mortgages originated in the U.S.

The Enterprises have been critical to keeping the mortgage market functioning. The Senate has recently been debating legislation to strengthen our regulatory process. With all that is going on in the mortgage market and the legislation, it might have been easy to take our eye off performance management. I am very proud that our team did not.

While OFHEO is not required to submit its own PAR, we followed the guidelines and requirements set for agencies covered by the Chief Financial Officers’ Act. OFHEO is the smallest agency to receive the CEAR Award among this year’s 17 recipients, and we encourage others not to be intimidated by the process. Small agencies sometimes question whether it’s worth the extra effort to meet the standards set for large agencies. The answer is yes. Whatever the size of a government entity, the public is counting on us to deliver results, just as they count on state and local governments to deliver results within their budgets. Following through with the PAR shows the public that we hold ourselves accountable to achieve the goals we set. While OFHEO also issues an annual Report to Congress on the condition of the Enterprises we regulate, for many small agencies the PAR can be the main opportunity to communicate with the public. Agencies can reach stakeholders they never knew they had.

For OFHEO, improving transparency about the mortgage market is also a strategy to achieve our mission. AGA’s feedback from the CEAR review reaffirms that. OFHEO’s PAR includes sidebars on the role of Fannie Mae and Freddie Mac in the secondary mortgage market and OFHEO’s oversight role. In her June 16 blog about the CEAR, Evie Barry, AGA’s director of Performance Reporting, cited these sidebars as “excellent primers for helping the unfamiliar understand a complex government function that is rich in acronyms.” Writing these and the rest of the PAR requires OFHEO staff to have the discipline of explaining our technical work in understandable, jargon-free language. It reflects our third strategic goal of continuing to support the national policy of an efficient secondary mortgage market by providing timely information and analysis on key policy issues such as loan limit changes, Enterprise market share and OFHEO's quarterly House Price Index. To do so, we also work with other federal agencies to coordinate efforts that could affect the nation's mortgage markets and housing finance system.

In many organizations, the less visible functions do not get the credit and recognition that their hard work and professionalism deserve. The CEAR gave us an opportunity to change that shortcoming by showcasing our mission support staff’s successes to the whole agency. As it turned out, we had our annual awards ceremony the next day so we were able to recognize the CEAR award team in front of the whole agency. It’s been almost two months since we learned we were getting the CEAR, and our mission staff continue to congratulate their colleagues and have renewed interest in improving our performance goals and reporting. The credit has been shared with all of OFHEO as everyone contributed to accomplishing the results. I can’t think of a better reinforcement for teamwork.

I came to OFHEO after having been principal Deputy Commissioner and Chief Operating Officer of the Social Security Administration (SSA). SSA publishes a PAR that has received the CEAR award for the last 10 years. It was great to see the SSA team awarded for their tenth straight year, the only agency to do so. It has been my pleasure and privilege to lead OFHEO to this same distinction, its first CEAR award.

I have accepted the CEAR award for the largest and now the smallest agency. I have to again thank AGA for supporting this award and performance cultures in government. I also thank Clay Johnson, the Deputy Director for Management at OMB for his incredible effort to support results, strong management, dedicated career employees, the President’s Management Agenda and the PART Process. Government agencies need to create results for American taxpayers. Too often political appointees emphasize policy and legislation over performance and management. I am hoping that the next Administration will build upon the emphasis on management and performance that has come from President Bush, the Office of Management and Budget, the Government Accountability Office and AGA.

OFHEO values continuous improvement. We review other agencies’ PARs to gather ideas about best practices and adopt what can work well here. Now that we’ve had our own AGA review, we look forward to following up on their OFHEO-specific recommendations to produce even better results and PARs in the years to come.

Link to OFHEO’S 2007 PAR

TOMORROW: Tom Amyot, "The Role of an Educator in Professional Development"

Think Big! Act Courageously! Make a Difference!

By: William Morehead, Ph.D., CGFM

William Morehead, Ph.D., CGFM, a member of AGA’s Jackson Chapter, is the chair of Accountancy, Computer Information Systems and Finance at Delta State University in Cleveland, MS. He is AGA’s National President-Elect Designate.

Think Big! Act Courageously! Make a Difference!

These seven words say a whole lot, yet they can say very little unless something bold is behind them. I intend to use these words as the foundation of my National Presidential theme in 2009—the subtitles that follow the theme will vary.

We, as Americans, are truly a blessed people who live in a blessed nation! Recently, I was out of the country teaching in a week-long strategic management seminar in Baku, Azerbaijan (borders Georgia to the North, Armenia to the West, The Caspian Sea to the East and Iran to the South). The experience was wonderful; the people were warm, welcoming, caring and genuinely interested in the training; the seminar went great; the food was delicious; and, the city was beautiful. Azerbaijan is enjoying its freedom from Russian rule and is prospering thanks in great part to its oil production.

Nevertheless, as a young government on its own, so to speak, she and her people are learning how to conduct business in a democratic society. Corruption clouds her progress—yet, the businessmen and businesswoman in the strategic management training were anxious to succeed on behalf of their country and themselves.

During our training, these business leaders made comments about sincerely trying to run their organizations using sound business practices—with integrity and little or no corruption. They discussed the difficulty of the task, but they were trying hard to be successful because they wanted a better country for future generations, particularly for their children and grandchildren.

It didn’t take long for me to realize I was in the midst of a group of pioneers, much like those of the early West who had big dreams; those who made bold decisions to fight the unknown to conquer the West; and, those who made huge sacrifices—in some cases, giving their lives—to make a difference for the country we so freely enjoy today. These business leaders in Baku are similar pioneers in their country today. They might not individually be successful in achieving their goals, but they are part of a movement to restore integrity, good business practices and wealth to their country, their government, their businesses, their families, their children and grandchildren and themselves.

Oh, if we were so bold today! It does not take but one quick trip outside the U.S. to know we are a blessed nation! In everything we do, we should be about operating with the utmost integrity. We should be leading the way! We should be using our time, talents and resources to make a difference in our societies. We should not be afraid of taking risks to push the edge of improvement. We should not pause from volunteering to help make our country—and our world—a better place to live in.

So, as we celebrate the Fourth of July this week, let’s be ever mindful of our men and women who have placed and are placing their lives on the line for our freedom. Let’s be thankful for those pioneers who have gone before us: in the West, into space and in places of bold financial leadership by fighting to improve financial management standards.

Let’s take this opportunity to consider how we as individuals, and perhaps collectively, can “Think Big! Act Courageously! Make a Difference!” If you know of ways we, AGA, need to think big and act with courage to make a difference, don’t hesitate to let me know. I am here for you.

TOMORROW: James B. Lockhart, director, Office of Federal Housing Enterprise Oversight, on "Small Agencies Benefit from the CEAR Program"

Do You Trust Your Government?

By: Marie Force, MA

Marie Force, MA, has been AGA’s director of communications since January 1996.

Do you trust your government?

In this era of runaway gas and oil prices, the questionable ramp-up to a prolonged war, mortgage industry meltdowns and record deficits, most readers will probably say, “No, I emphatically do not trust my government.” But wait. Are you sure? You really don’t trust your government? I beg to differ.

I’ve written about this topic several times in AGA’s Journal because it’s one that resonates with me on many levels. In my nearly 13 years at AGA, I’ve had a front-row view of the hard work going on every day to make federal, state and local governments more accountable to the people they serve. I’ve witnessed the Herculean efforts under way to clean up the mistakes of the past, to report results in a manner that is useful to decision-makers and citizens alike, and to plan for a more fiscally sound future.

AGA’s Citizen-Centric Reporting Program, which encourages all governments to produce four-page reports to their citizens, has been widely embraced, a sign to me that government officials and taxpayers are hungry for just this kind of information. Yet, despite all of this hard work and the many significant steps forward over the last two decades, the results of AGA’s Public Attitudes Toward Government Accountability and Transparency 2008 Survey show a pervasive displeasure with and distrust of government among the more than 1,600 people surveyed.

In deciding how to answer the “Do you trust your government?” question, most Americans would look to headlines in their local newspapers and doom and gloom stories on TV newscasts full of the government bashing that is so common these days, especially during a hotly contested election year. But I contend that just about every adult citizen in this country does implicitly trust his or her government, and our daily actions prove it.

I credit Past National President Doug Haywood, CGFM, for implanting this notion in my mind many years ago when he declared, as we gathered for a luncheon in one of the massive hotel ballrooms we use for the PDC, that we had just proven our trust in government by walking into the large room and never pausing to worry that the roof might cave in on us. We had proven it by eating the government-inspected food and drinking the government-inspected water. We had proven it by stepping onto airplanes to get to the conference without having the first clue as to who was going to fly us through the air at 30,000 feet until after the flight was completed and they bid us a good day on our way out the door.

We rely on stoplights, we call 911 and someone comes, we breathe non-toxic air (in most places), and swim at pollution-free beaches. We take elevators to the top of the Empire State Building, as I will do this weekend, aware of the inspection certificate neatly framed over the wall of buttons, but without a glance at the details. The elevator has been inspected. We are safe to proceed. Why? Because a government employee has made sure the elevator is in proper working order.

Why is it that we do these things every day without the first thought as to whether or not we should? We do them, without that first thought, because our government—whether federal, state or local—has been there before us to make sure we are as safe as we can be. Are there holes in the system? You bet. Does government fail on occasion? Absolutely. Is there such a thing as a perfect system? Nope. But I contend that our system is better than most. The late newsman Tim Russert was fond of saying, “What a country.” I couldn’t agree more. I trust in my government, and so do you.

Does it bother you that so many people say they don’t trust their government when their daily actions prove otherwise? What can we at AGA and as a citizenry do to change this perception?

TOMORROW: William Morehead, Ph.D., CGFM, AGA National President-Elect Designate, on "Think Big! Act Courageously! Make a Difference!"

Keep That Opinion!

By: Andrew C. Lewis, CGFM, CPA

Andrew C. Lewis, CGFM, CPA, is a senior manager with KPMG LLP’s government audit practice in Washington, D.C., and is an adjunct professor at The George Washington University. Mr. Lewis has also been on the board of the Montgomery-Prince Georges’ County AGA chapter for the past nine years.

Since the inception of the statutory requirements for federal agencies to prepare financial statements and subject them to audit, the quest for an unqualified audit opinion has been at the forefront of federal agencies’ financial management agendas. With two exceptions (the U.S. Departments of Defense and Homeland Security), all agencies that are significant to the Financial Report of the United States Government have successfully obtained an audit opinion (either qualified or unqualified) at least once.

However, history has shown that without sustained attention to developing an effective financial management infrastructure and maintaining strong financial management, an agency can lose the ability to prepare reliable financial statements. Further, the oversight by the U.S. Office of Management and Budget (OMB), along with the very public nature of the President’s Management Agenda (PMA) and the associated PMA Scorecard, has helped to drive some agencies from the sidelines and on to the field.

It’s important to point out that this discussion is not just limited to members of the federal community. State and local government personnel encounter the same obstacles and triumphs faced by their peers in the federal community.

So, after all of the long days of meetings to discuss policies and procedures, after chasing paperwork and documentation far and wide, after the countless weekends in the office surrounded mostly by financial management personnel and auditors, and after responding to the auditors’ questions (and questions and questions), what else have you achieved along your agency’s quest for an unqualified opinion?

In summary I ask, what good is a clean opinion?

What are the best ways to keep that opinion?

What are those significant risks and issues that could threaten your agency’s opinion?

MONDAY: Marie Force, AGA Communications Director, on "Do You Trust Your Government?"

Finding the Sweet Spot between Principles and Rules

By: Wendy M. Payne, CGFM, CPA

Wendy M. Payne, CGFM, CPA, a member of AGA’s Washington, D.C. Chapter, is the executive director of the Federal Accounting Standards Advisory Board (FASAB).

Opinions expressed here are those of Ms. Payne and do not represent the views of the Board.

As a first-year student at the University of Virginia, I learned a simple honor code—do not lie, cheat or steal. These guiding principles seemed straightforward at the time, and I was naively certain of their universal appeal and clarity. Later in life I learned that people could debate the reach of these principles.

• Is it a lie to simply not share information that you know would influence another’s judgment? • Is it cheating if you fail to tell the card player next to you that you have seen his hand? • Is it stealing if the store clerk fails to charge you for one item in a large purchase and you leave with the item anyway?

One of the challenges in standards-setting is deciding how much authoritative guidance is needed to avoid undesired results. Is a short statement of the objective of a standard sufficient? Or should guidance be provided on the known questions that will come up during implementation? How many variations on a theme should be addressed?

This challenge has been given the unfortunate working name of “Principles-based versus Rules-based Standards.” I say unfortunate because it implies a trade off wherein one sacrifices principles in favor of rules. Of course, that sacrifice can happen, but the tradeoff is generally more complex than this implies. It is not that rules cannot be based on principles (or concepts); rather they generally are intended to be consistent with principles while addressing practical issues. For example, rules may be introduced to reduce the cost of implementation while acknowledging that standards should result in cost-beneficial information, increase comparability between entities, or ensure consistency over time.

The chairman of the Financial Accounting Standards Board (FASB), Robert Herz, described the problem with the current rules-based system as follows:

“those who want to comply with rules ... are not always sure of everything they need to look at. Those looking to get around the rule … can use legalistic approaches to try and do it” (Business Week online, 2002)

Of course, he was most likely focusing on the situation faced by nongovernmental entities—the jurisdiction of the FASB. The Federal Accounting Standards Advisory Board (FASAB) develops generally accepted accounting principles for the federal government. While the federal government comprises many diverse component entities, a single consolidated financial statement is the ultimate outcome of annual federal financial reporting. At this time, the Board has discussed and is updated regularly on the ongoing movement towards principles-based standards. Because the perfect balance between establishing a guiding principle through a standard and supporting effective implementation of a standard by adding more details that may be considered “rules” is elusive, members must exercise considerable judgment. No doubt the Governmental Accounting Standards Board members face similar issues regarding the balance between principles and rules.

Given the continuing debate in the nongovernmental arena, I would be interested in your thoughts on the following questions:

1. Do you believe differences exist between governmental and nongovernmental entities that alter the balance between principles and rules with respect to accounting standards? (For example, is the risk/reward structure so different that government has fewer “looking to get around” a rule and would this make rules more beneficial or at the least less detrimental?)
2. Do you believe that FASAB should consider the fact that it ultimately develops standards for a single reporting entity in weighing whether to lean toward principles or rules?
3. Do you believe the fact that taxpayer dollars are spent on implementing the standards creates a special obligation to reduce the cost of implementation to the greatest extent possible through central guidance?

TOMORROW: Andrew Lewis, KPMG LLP, on "Keep That Opinion!"

Have We Gone Too Far or Not Far Enough with Performance Measurement Reporting?

By: Sam M. McCall, CGFM, CPA, CIA, CGAP

Sam M. McCall, CGFM, CPA, CIA, CGAP, a member of AGA’s Tallahassee Chapter and a Past National President, is city auditor in Tallahassee, FL

A couple of years ago I helped coauthor an article for AGA’s Journal of Government Financial Management on performance measurement reporting. In that article, two positions, some would say extreme positions, were discussed about whether governments should report externally on their government’s performance.

The positions were described as the “constrained perspective” and the “expansive perspective.” Advocates of the constrained perspective take the view that external reporting of performance information, even if that information is not included in the Comprehensive Annual Financial Report, could undermine the reputation and legitimacy of financial reporting. The constrained view is supported by traditional thinking in accounting and auditing that focuses on a scientific approach to the discipline and a focus on issues of efficiency and facts. Those in support of the expansive perspective assert that financial reporting to include performance measurement reporting better serves elected officials and citizens. To not also report on the performance of government results in an incomplete report. The expansive view is supported by efficient citizenship, bureaucratic politics and democracy theory from public administration. This expansive view recognizes that to fully understand and have an appreciation for government and for external reports to have meaning, they have to necessarily address issues involving both facts and values.

Efficient citizenship theory values citizens as much more than customers of government services; they are owners of the government. Further, government has a responsibility to provide information to citizens so they can form their own opinions about the quality and quantity of services received. Through information exchange, citizens will be more engaged and will exercise their ownership rights through their voting preferences. The result will be more efficient citizens.

On the other hand, those of us who have financial management and accounting backgrounds have benefited from being recognized as a member of an educated and respected profession. Over an extended period of time, elected and regulatory bodies have recognized the financial management profession as experts on matters of accounting. Those bodies have deferred to financial preparers and attestors on issues relating to financial reporting and verification.

Some say the issues is one of accounting (a constrained perspective) versus accountability (the expansive perspective.)

My questions are:

A. Is performance reporting on service efforts and accomplishments needed to better address the information needs of citizens?
B. Does performance measurement reporting threaten the integrity and credibility of the financial management profession?
C. Do you support a constrained or expansive perspective on performance measurement reporting?
D. How does the government best meet the information needs of citizens and at the same time maintain or enhance the earned respect for the financial management profession?

TOMORROW: Wendy Payne, CGFM, Executive Director, FASAB, on "Finding the Sweet Spot between Principles and Rules"

Oversight Matters: Effective Oversight vs. the "Gotcha" Mentality

By: Michael Hettinger

Michael Hettinger is the former staff director of the U.S. House Committee on Government Reform, Subcommittee on Government Management. He is currently director of Practice Planning and Marketing at Grant Thornton Global Public Sector.

After spending more than 10 years on Capitol Hill in a number of capacities, I am certain oversight matters, and real oversight takes time and dedication. In my most recent position, as staff director of the U.S. House Committee on Government Reform, Subcommittee on Government Management, Finance and Accountability, I helped to shape what I believe was an effective oversight agenda, designed to highlight sound financial management practices where they existed, as well as shed light on departments, agencies and areas where changes were needed. We designed the agenda to be forward-looking, based on the facts laid out in front of us, and tried to drive change, rather than react to the latest article in the news. Our agenda wasn’t sexy, but it was effective. We shied away from the “gotcha” mentality that seems to dominate oversight practices these days.

What drives the gotcha mentality? To me it is a combination of things, none of which reflect positively on our oversight bodies. Clearly those who engage in gotcha oversight are looking to make a name for themselves or simply to embarrass people or agencies. We have seen gotcha oversight from Congress, GAO, agency inspectors general and others around government who seek nothing more than to take a piece of information and pull it out of context. But it doesn’t have to be that way, and in my opinion, gotcha oversight isn’t very effective anyway.

To highlight what I am saying here, I often tell a story about a GAO report in the aftermath of Hurricane Katrina where the investigators called out certain FEMA officials for the purchase of a golf cart in New Orleans. Now, while there are certainly some beautiful golf courses in the New Orleans area, most were underwater following Katrina, and I can assure you that no one was using that golf cart to get in a quick 18 holes in between work shifts. A little investigation revealed that the golf cart purchased actually had a legitimate disaster recovery use: to get supplies from one end of the New Orleans Superdome to the other. The problem is the real story wouldn’t attract press attention, so it was reported (as opposed to taken) out of context. This is a perfect example of gotcha oversight with no benefit to improving the process whatsoever. Unfortunately, we see this all the time.

Not to single out GAO, we have seen similar oversight activities from Congress and a handful of agency inspectors general as well. Even my old committee stepped into the fray by holding “gotcha” hearings on steroids in professional sports and other matters outside the scope of the committee’s charge. This continues to this day. I will concede that in many cases there is a benefit to shining a light on problem areas, but if the underlying information can’t hold water, little is actually gained.

Real oversight can be more effective, but it takes time, dedication, a little self-restraint and some proactive planning to do it right. The objective of oversight is to better understand and hopefully improve whatever process it is that you are reviewing. When I was on the committee we took on the major task of trying to improve financial management at the then-newly created Department of Homeland Security. Over an 18-month period we methodically built a case for the need to pass legislation to apply strict financial management laws to DHS. The result of this effort was enactment of the DHS Financial Accountability Act (PL 108-330), placing DHS under the CFO Act of 1990 and adding an internal controls audit requirement on the department, the first such requirement for a federal entity. DHS is in better financial shape today as a result. This legislation prompted OMB to strengthen Circular A-123, Management’s Responsibility for Internal Control, on its own and in turn improve the overall internal control environment in the federal government.

Trust me, it is a lot easier to read the newspaper and react to what you read, hold a hearing with some high profile witnesses and issue a hard-hitting report. However, little is gained from this activity. Real oversight has the effect of driving change which has staying power for the long run and we need to see more of it.

Has “gotcha” oversight gone beyond the point at which it is effective?

TOMORROW: AGA Past National President Sam McCall, CGFM, Tallahassee City Auditor on "Have We Gone Too Far or Not Far Enough with Performance Measurement Reporting?"

Talent Management: How to Compete and Win the War for Talent

By: William Kilmartin, CGFM, and Breck Marshall

William Kilmartin, CGFM, a member of AGA’s Boston Chapter, is the retired state comptroller, Commonwealth of Massachusetts, and currently the director of Accenture's state government finance and administration practice. Breck Marshall is the managing partner for Accenture's North America public sector talent management practice.

Recently the Electronic Commerce Coordinating Council conducted a symposium on this topic, and the results are highlighted in this blog.

Whether you know it or not, your organization is in a war for talent. Over the next few years as the demographic landscape continues to shift at an ever-faster pace, the challenges with staffing our government work force are going to become significantly more difficult. Also, in this environment of constrained resources, we need to maximize and leverage every resource at our disposal. Work force represents a significant portion of every budget. How can we get more productivity out of our work force? One way is to embrace an effective program of Talent Management. Organizations that have report productivity increases of 15, 25 or even 40 percent. Do the math. This is big.

Talent management is the array of interconnected processes by which an organization identifies, attracts, develops and retains its personnel to perform and achieve the organization’s mission. Often this work is thought to be the work of HR or supervisors, but in fact, getting the best out of each employee is the responsibility of everyone on the team. From a rewards perspective, this also means not just rewarding the talents of the high-performing few but developing and executing strategies that raise the ability and output of the greater work force.

Why is this important?

Over the next five years up to a third of the U.S. federal government and similar percentages of state and local work forces are going to be eligible to retire, begging the question, who will fill their shoes? At the same time, a new generation, one that has grown up digitally from day one, is coming in to the work force. This combination bookend challenge of Silver Tsunami meets High Tech sophistication has started and will continue to significantly alter the battleground for attracting and retaining talent.

First let’s take a look at generations in the work force today so that we know what talent we are talking about. The baby boomer generation was born between 1943-1960 and came in with a roar. Due to its size, it was able to dictate the terms by which it would live and work. The Net Generation consisting of Generation Y and Millennials was born between 1977–1998. This population in the United States is size-wise on par with the boomers. However, globally in China, India, Vietnam and other Asian countries, this population dwarfs the existing boomers by large margins and early indications are that they will similarly shape the future work world to meet their interests and desires.

In addition to generation change over, what is particularly interesting is the future talent pool of the United States. The U.S. Department of Labor is projecting a 10 million-person work force shortage by 2010 and India will have an excess of 47 million workers by about that same time. A recent study by Accenture of graduating 2008 seniors from all over the world indicated that the United States is still considered to be the most desirable place to work and create a career. Quick reviews of testimonies on Capital Hill by Microsoft and the like indicate a shortage of talent in the U.S. and the need for better visa and Immigration policies to enable the free flow of talent. Essentially, in the near future, talent is going to be on the move and the war to attract and retain that talent may come from competitors half way across the world as well as in your own community.

An organization’s ability to be successful in attracting and retaining talent will depend on getting the following things right:

Organization Strategy—Before going out and spending precious resources to acquire talent the organization must be able to articulate what is it trying to do, what vision is it trying to achieve, how is it planning to operate in the future to accomplish the mission.

Talent Strategy—Once the organization strategy is known, the key is to define at a high level the talent strategy that will support execution of the organization strategy. Leading from this strategy is a continuous cycle of what we call the four D’s: Define, Discover, Develop, and Deploy.

Define—Interconnected with the strategy is the idea of defining who do you need doing what to be successful. How do you plan on organizing all of this talent? What are the skills and abilities of the work force that are required to achieve the mission? How will the future work force work together from a culture and toolset standpoint?

Discover—This step defines the sources of talent. Through analytics, past employee experience, and other means, what are the talent and recruiting pools the organization needs to go after to get the right talent to do the work?

Develop—What are the training programs, on boarding processes, mentors, etc., that need to be in place to bring in the new talent as well as further develop what already exists in the organization? While this step is not new, the way in which the Net Generation learns is different than previous as well as the technology to better support adult learners. Advances in snippet learning as well as other support aids are significantly changing what goes on in this phase.

Deploy—A key to success for all employers is the need to deploy the right talent with the right skills to tackle the right challenge at the right time. Creating this type of timing for both new and existing employees can be a key component to maintaining an engaged work force.

In planning for the future in the public sector, some organizations have already begun to experiment by creating programs to attract experienced workers retiring out of the private sector in to second careers in government. At the same time, the Net Geners are starting to seep in to the work force and are already having an immediate impact as organizations are having to change their recruiting strategies and messages to target as much the “hover parents” as the graduating students. Given their interconnectedness to technology, the Net Geners are also looking carefully as to what collaboration space and mobile tools they will be provided to get their work done. Not to long ago, the debate in most offices centered on should we provide our employees with access to the Internet in the workplace and why. Now the question is how much access and interconnection are you going to allow with the outside world in order to get talent to come and work for the organization.

Governments need to do a better job managing and nurturing one of their most precious assets: their work force. This is an executive policy issue, but it also permeates through all levels of the organization.

Given the need to rethink the talent needs of the organization and the complication of talent on the move, the future employee career experience is going to be different than today. The war for talent is definitely squarely on the horizon. “Game On.”

TOMORROW: Mike Hettinger, Director of Practice Planning and Marketing at Grant Thornton Global Public Sector on "Oversight Matters: Effective Oversight vs. a 'Gotcha' Mentality"

R-E-S-P-E-C-T and Just What It Means To Me: Keys to Success in Any Profession

By: Julia Ranagan, CGFM, CPA

Julia Ranagan, CGFM, CPA, a member of AGA’s Washington, D.C. Chapter, is an Assistant Director with the Federal Accounting Standards Advisory Board.

When members of AGA’s Washington, D.C. Chapter called to tell me I had been nominated for this year’s national Emerging Leader Award of Excellence, I was floored. When Rick Fair, AGA National President, called to congratulate me on winning the award, I was speechless. To me, the definition of a true leader is someone who has the ability to influence others in a positive manner while earning respect in return. Some days I have trouble convincing my five-year-old to wear shoes.

I was asked to write about the keys to my success that led to this award. I believe being selected for such an honor is a result of the qualities that have been instilled in me by my wonderful parents and the exceptional mentors, supervisors and colleagues I have worked with over the years. I have learned something different and useful from each person with whom I have come in contact. There are countless keys to success, so I have selected the seven attributes that I think best define a leader and presented them below in the form of an acrostic (R-E-S-P-E-C-T).

RESPECT—I have chosen the word “RESPECT” for my acrostic as well as the first letter because I believe respect is that important. A leader shows respect for others’ time, space, viewpoints, backgrounds, experience and diversity, just to name a few. Everyone’s life experiences have led them to the place they are today. While a leader need not always agree with others, each person deserves to be heard and respected as a human being. Through demonstration of respect for others, a leader receives respect in return. You can gain a sense of how well you respect others by the number and quality of personal and professional relationships that you are able to maintain over the years.

ENRICHMENT—A leader looks for opportunities for enrichment at every turn, whether that be through membership in a professional organization, reading books on topics that provide a broader depth of knowledge or learning a new sport. A few years back when I was working as a government consultant in San Diego, I learned how to skydive on the weekends and became certified to jump solo. I will pull on that experience and what I learned about myself in the process for the rest of my life.

SERVICE—A leader finds ways to be of service to others, whether through serving in a professional organization such as AGA, creating a report for a manager that provides needed information or volunteering in the community. The year I served as the editor of the Washington, D.C. Chapter newsletter, The Washington Connection, gave me a valuable look into the workings of the organization that I never saw from the outside in many years of membership.

PROFESSIONALISM—A leader demonstrates professionalism when dealing with everyone. All too often, I have seen senior officials walk past lower-level staff without so much as a glance. I find that true leaders recognize and take the time to acknowledge everyone they come in contact with.

ETHICS—A leader strives to always do what is right even when no one is looking. I learned the difference between right and wrong at a very young age. I was in the grocery store with my mother, and she refused to buy me a pack of PEZ candy. When my mother found it in my pocket after we got home, she marched me back up to the store and made me return it to the store manager and apologize. That is the best lesson on ethics I ever learned and it has vividly stuck with me for 30 years. Taking something that does not belong to you is stealing no matter how “little” it is, how well you can justify taking it or how bad you want it. I now teach my daughter the same lesson. There is no such thing as “Finders, Keepers, Losers, Weepers” in her world. I prefer the motto “Finders, Keepers Will Become Poor Sleepers.” If my daughter finds a penny on the ground, I have her return it to the closest cashier, manager or employee. More often than not, they tell her she can keep it. Others realize I am trying to teach her a lesson, thank her for her honesty and give her a reward such as a lollipop or sticker in return.

CERTIFICATION—A leader takes the initiative to become certified in his/her field, whether it be the CPA, CGFM, CIA, CISA, CFP, CPM, etc. Earning and maintaining a relevant certification demonstrates a dedication and commitment to the profession that is unmatched by diligence alone.

TRAINING—A leader acknowledges the need for constant learning (and re-learning) and seeks training in areas that will further develop needed skills. Whether it be classroom, self-study or on-the-job, continual learning translates into continual growth.

I am tickled pink to be recognized by my peers as an emerging leader. It is a reflection of what I have learned from my parents, supervisors, mentors and colleagues. I look forward to learning from them, and others I have not yet met, the keys that will continue to unlock the doors to success in the years to come.

What other keys to becoming a successful leader do you think are important?

MONDAY: Bill Kilmartin and Breck Marshall, of Accenture, on "Talent Management: How to Compete and Win the War for Talent"