The KPMG Executive Guide to High Performance in Federal ...

government

The KPMG Executive Guide to High Performance in Federal Financial Management

advisory

preface

Preface

In the past two decades, there has been an evolution in the role of a chief financial officer (CFO) in the Federal Government, following the passage of the Chief Financial Officers Act of 1990 and the ensuing companion legislation that were directed at full accountability and sound Government management. The Federal CFO is making the journey from the "back room" to the "board room." CFOs are moving from organizations that have traditionally been largely accountingand administrative-oriented to organizations that support every facet of their agency's missions and operations as respected and trusted business partners. Federal CFOs are at different stages of the journey, and they are taking a variety of paths. Some started the journey earlier than others, and some have longer journeys given where they started and the sheer size and complexity of the organizations they serve.

KPMG LLP (KPMG) recognized a need to help chart the course for the Federal CFO by developing a guide as to what constitutes a high-performing Federal finance organization. This guide to high performance, The KPMG Executive Guide to High Performance in Federal Financial Management (KPMG Executive Guide), was developed as part of KPMG's continuing thought leadership support through the KPMG Government Institute to further the continuing evolution of Federal financial management. Federal finance organizations should find the KPMG Executive Guide helpful in gauging where they are in the journey toward high performance.

KPMG performed extensive research in developing this Executive Guide, which draws on material from organizations such as the Office of Management and Budget, the Department of the Treasury, and the Government Accountability Office, which represent the senior leadership in the Federal financial management community. Also, KPMG received input from the Federal CFO community to help establish the relevance and context of the material. To serve as the

Preface

The KPMG Executive Guide i

preface

Preface

foundation for this Executive Guide, KPMG developed the Federal Financial Management Framework (KPMG FFM Framework), which addresses high performance across three dimensions that are common to all Federal finance organizations: (1) Finance Operations, (2) Program Operations, and (3) Enterprise Operations. To facilitate tracking within the dimensions, the KPMG FFM Framework is included on the last page of this guide as a full-page foldout.

High performance is defined in three

dimensions that are common to all Federal finance organizations:

Finance Operations, Program Operations, and

Enterprise Operations

The KPMG Executive Guide is intended to be a living document. The KPMG Government Institute plans to periodically update the KPMG Executive Guide and encourages the Federal financial management community to contact us regarding their experiences in using the KPMG Executive Guide and any suggestions for enhancing the document so that it continues to be a relevant and useful tool. Given the breadth of the issues covered by the KPMG Executive Guide, KPMG expects that this document will undergo refinements over time based on user input. Users can make suggestions by sending an e-mail to us-fedffmguide@.

Additionally, to build on the KPMG Executive Guide, the KPMG Government Institute developed the KPMG Federal Financial Management Assessment Tool (KPMG FFM Assessment Tool). The KPMG FFM Assessment Tool provides more than 850 questions crafted to help our practitioners work with finance organizations to assess performance across the three dimensions of the KPMG FFM Framework. The questions in the KPMG FFM Assessment Tool expand on the concepts and queries in the KPMG Executive Guide and are anchored in the various Federal financial management requirements and activities that agencies are expected to achieve. To find out more about the KPMG FFM Assessment Tool, please send e-mail inquiries to us-fedffmguide@.

ii The KPMG Executive Guide

Contents

contents

contents

Preface

Acronyms

Introduction

A. Finance Operations

A1. Finance Strategy and Governance

A1.1. Finance Strategy

A1.1.1. Strategic Planning

A1.1.2. Customers and Stakeholders

A1.1.3. Service Provider Relationships

A1.2. Governance

A1.2.1. Organizational Structure

A1.2.2. Governance Framework

A1.2.3. Performance Measurement

A2. Operational Performance

A2.1. Information Technology

A2.1.1. Existing Financial Management Systems

A2.1.2. Financial Management System Modernization

A2.1.3. Information Security

A2.1.4. Financial Data

A2.2. Processes

A2.2.1. Internal Controls

A2.2.2. Process Efficiency: Reducing the Cost of

Routine Transaction Processing

A2.2.3. Process Definition and Documentation

A2.3. Human Capital

A2.3.1. Knowledge, Skills, and Abilities

A2.3.2. Training and Career Development

A2.3.3. Adequacy of Resources

A2.3.4. Employee Performance, Productivity, and Reward

A3. Financial Risk Management

A3.1. Policies and Procedures

A3.2. Financial Operation Risk Assessment

A3.3. Fraud Risk

A3.4. Remediation

A4. Budget Execution, Financial Reporting, and Compliance

A4.1. Budget Execution

A4.2. The Administrative Control of Appropriations and Use of Funds

A4.3. Financial Statements

A4.4. Other Financial Reporting

A4.5. Regulatory Compliance

A5. Assessing Performance in the Finance Operations Dimension

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The KPMG Executive Guide iii

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