Core Competencies in Financial Management for Information Technology Personnel in the Federal Government 1)1 NV'kit A Joint Project of the Human Resources Committee of the Chief Financial Officers Council and the Joint Financial Management Improvement Program CC-3 September 1997 Foreword The CFO Council and the Office of Management and Budget identified improvement of Federal financial management systems as the number one priority in their jointly published Federal Financial Management Status Report and Five Year Plan. Indeed, the degree of success that any Federal agency or department has in achieving its financial program goals and objectives hinges on the utility and effectiveness of its financial management systems. Ready access to financial data and accurate, timely reports are essential for managers to determine the costs of their program services and products in an environment increasingly characterized by business-type analysis and evaluation of program success or failure. With the full implementation of the Government Performance and Results Act (GPRA) of 1993, agencies will be required to report to Congress on their progress in achieving the performance goals contained in their strategic plans. These reports will be Congress's primary tool in reviewing budget requests and determining further funding. Agencies will measure progress by evaluating their success or failure in achieving program performance indicators that are measurable both qualitatively and quantitatively. To do this, each agency will need to develop financial management information systems that capture both financial and program specific information that can be reported in an understandable, clear and concise way. Financial management systems will need to conform to the new accounting standards prepared by the Federal Accounting Standards Advisory Board, approved by the CFO Council and mandated by the Federal Financial Management Improvement Act of 1996 (FFMIA). Implementation of these standards, and especially the cost accounting standard, will change the culture of financial management in the Federal Government. Rather than the traditional "checkbook" method of providing funding through annual budgets that focus on only the budget year, agency program outputs and outcomes will be evaluated based on their costs, accumulated and reported consistent with cost accounting standards. The marrying of cost and program data, historically captured in various information systems, will be the greatest challenge to both financial and information technology (IT) personnel. To promote cooperation and understanding between these two disciplines, it is absolutely essential that IT personnel have a solid knowledge of core financial management competencies. The CFO Council and CIO Council agree these disciplines must speak the same language in order to develop the kinds of information systems that will meet the needs of a new, business-oriented government. Core Competencies in Financial Management for Information Technology Personnel in the Federal Government defines the key developmental goals and training activities for IT personnel to achieve competence in financial management. Successful development and implementation of information systems that accurately capture both program and financial data will be the catalyst for change to a results oriented government. Contents Foreword i Acronyms iii Introduction 1 Financial Core Competencies for Entry- and Mid-Level Information Technology Personnel 3 Financial Core Competencies for Senior Information Technology Managers and Supervisors 7 Specialized Knowledge Required for Financial Management Systems 11 Training 18 Acronyms CFO Chief Financial Officer CFO Act Chief Financial Officers Act of 1990 CIO Chief Information Officer COTR Contract Officer Technical Representative FASAB Federal Accounting Standards Advisory Board FFMIA Federal Financial Management Improvement Act of 1996 FFMSR Federal Financial Management System Requirements FMS Financial Management Service, Department of the Treasury GAO General Accounting Office GPRA Government Performance and Results Act of 1993 GSA General Services Administration IRM Information Resource Management IT Information Technology JFMIP Joint Financial Management Improvement Program OMB Office of Management and Budget SFFAS Statement of Federal Financial Accounting Standards USDA U.S. Department of Agriculture Introduction Background A governmentwide training symposium held in 1994 provided the impetus for establishing governmentwidecore competencies for all levels of financial management personnel. The first effort resulted in the Framework for Core Competencies for Financial Management Personnel in the Federal Government published in 1995. The CFO Council then suggested that financial management competencies be defined for program managers in light of the new requirements placed on them by the GPRA. The resultant Core Competencies in Financial Management for Program Managers in the Federal Government was published in April 1997. The Council had also recommended that financial core competencies be identified for financial system analysts. A CFO sub- committee was formed in December 1996 to develop these competencies. After a few discussions, the sub-committee concluded that the roles of the financial system analyst and the computer system analyst (computer specialist) supporting financial systems were blending together. Indeed, neither discipline could continue to operate as it had in the past--one dictating functional requirements, the other deciding on technological solutions, sometimes almost independently of each other. It became clear that in order to produce financial system solutions that work, the financial system analyst needs an in-depth knowledge of financial management and a working knowledge of IT, while the IT professional must have an in-depth knowledge of IT and a working knowledge of financial management. These two disciplines working together is a critical factor for the effective design, development, implementation and operation of financial management systems. The objective of this document is to set forth recommended core competencies in financial management that will foster collaborate work among IT and financial management professionals at all levels of experience. Purpose of this Document The financial system analyst takes the lead in gathering functional requirements, while the IT professional develops IT solution alternatives for those requirements. The two disciplines, working hand-in-hand, can then decide on the best option that satisfies the financial user needs. The competencies, learning objectives, and training outlined in this document are intended to be used as a reference tool and a general guide to assist both financial management and IT personnel in their roles of providing meaningful financial and program information to managers throughout the government. This document presents the core competencies in financial management for IT personnel from entry level through senior level. It includes definitions of the competencies, learning objectives, and developmental activities associated with each. Most of the experience and knowledge can be obtained on the job, however, classroom training may be essential to gain specific knowledge, skills, and abilities. Successful IT personnel will most likely achieve competence in financial management through a combination of classroom instruction, practical applications, and on the job experience relying on financial management personnel in their organizations for expert financial guidance and knowledge in the design, development, and implementation of financial management systems. Conclusions and Recommendations Following the initial recommendationby the Human Resources Committee for development of financial core competencies for the general financial management (500- 599 classification) series, it was concluded that the financial system analyst (classification series 501) and the IT specialist (classification series 334) need to work together as a team to analyze, design, develop, implement, and support financial systems. Therefore, Core Competencies in Financial Management for Information Technology Personnel in the Federal Government was developed. This document will be issued along with Core Competencies in Financial Management for Financial System Analysts in the Federal Government to provide both disciplines a reference tool for developing the knowledge, skills and abilities necessary for support of financial systems. 2 Financial Core Competencies for Entry- and Mid-Level Information Technology Personnel The following are target levels of competencies for entry- and mid-level IT personnel. They are described as knowledge, skills, and abilities; however, possession of a level of understanding, knowledge, and skill alone does not accomplish the work. Competencies are evidenced by their application and can be developed only through a mix of on-the-job experience in structured work assignments and third-party provided training. The competencies are clustered into the following groups: Accounting; Financial Systems; Legal, Procedural, and Regulatory Framework; Agency/Organization Specific; and General Business, Communication, and Leadership. 3 Accounting Competencies Basic accounting concepts and principles * Knowledge of double-entry accounting concepts of debits and credits, including single transaction entry resulting in multiple postings. * Knowledge of the different methods of accounting including accrual, obligation, and cost. Federal accounting concepts and principles * Knowledge of the requirements of the Standard General Ledger (SGL). Understanding of the structure of general ledger accounts required of all agencies. * Understanding of the structural relationship between the budgetary and proprietary SGL accounts. * Understanding of how financial transactions affect SGL accounts. * Knowledge of Federal Accounting Standards Advisory Board (FASAB) financial accounting concepts and standards. Accounting internal controls and automated data processing controls * Knowledge of the techniques used to assure that financial transactions and files are fully processed (e.g., hash dollar and item counts). Mid-level IT personnel should have a thorough understanding of such techniques. * Knowledge of financial systems control reports and files that are used to check the data integrity within the process. Mid-level IT personnel should have a thorough understanding of these reports and files. * At the mid-level, thorough understanding of the types of functional and technical security controls used to limit access to financial computer files, tables, and data. This includes controls for purposes of separating functions so that an individual does not have sole control and oversight of the security of financial data. 4 Financial Systems Competencies Financial systems' functionalities * Working knowledge of the overall functionality of the financial system(s) and the individual specific supports and interface(s) with other systems. * At the mid-level, thorough knowledge of the organization's various financial systems' functionalities. Comprehension of how a change in one system affects other systems and how all the interfaces between systems work. Financial requirements and IT solutions At the Mid-level * Ability to identify and analyze software tools that facilitate the processing or retrieval of financial data. * Ability to identify and communicate technological solution alternatives, including costs and time frames, to financial managers and program managers for mutual decision-making. Legal, Procedural, and Regulatory Competencies * Knowledge of legislative and regulatory requirements applicable to the organization's financial systems and practices. Acquire a general understanding of, and stay current with, relevant law and regulation such as the requirements of OMB Circular A- 127, GPRA, the CFO Act and their effects within the Agency. Acquire a general understanding of JFMIP guidance contained in JFMIP Frameworkfor Federal Financial Systems and JFMIP Federal Financial System Requirements. At the Mid-level A general understanding of how the agency formulates its budget and the Congressional and OMB appropriation process. Understanding of sources of funding and the appropriation process including associated terminology such as authorizations, apportionments, allotments, commitments, obligations, and expenditures. 5 Agency/Organization Specific Competencies Mission and Strategic Plan * Become acquainted with the agency/organization's structure, mission, function, and major components and the requirements of the agency's strategic plan. Organization's business practices * Acquire working knowledge of the organization's business practices as they relate to the financial system(s) the individual supports. * At the mid-level, a thorough knowledge of business practices related to the financial system's operations required to effectively work with financial and program staffs in importing and/or reengineering financial management systems. General Business, Communication, and Leadership Competencies At the Mid-level * Ability to apply knowledge of business process re-engineering and analysis for efficient operations. * Ability to communicate with financial and program staffs and other end users for the purpose of determining financial management needs. * Understanding of team building approaches and skills and ability to apply them in teams made up of different functional disciplines. Financial Core Competencies for Senior IT Managers and Supervisors The IT professional is now at the level of managing projects from conception to implementation and is most often responsible for the management and supervision of an organization devoted to financial management systems acquisition, implementation, and operation. Typically, the IT manager is heavily involved with such activities as procurement and Contracting Officer Technical Representative (COTR) functions, resource management, budget allocation, planning, systems architecture and integration. At this level, skills in leadership, management and communication are essential for success. Further competence in the following areas of financial management is necessary. 7 Financial SystemsCompetencies * Knowledge of organization's financial systems, including legislative, administrative and regulatory requirements, in order to manage the integration of these systems within the organization's environment * Knowledge of government-wide standards for the exchange of financial information. * Ability to identify and interpret planning requirements resulting from legislation and oversight agencies' directives. * Ability to define roles and responsibilities of oversight and partnering organizations within and outside the bureau/agency (such as Treasury, GAO, GSA and OMB for external oversight and the CIO/CFO within the Department and agency) as necessary to carry out new requirements. * A general understanding of JFMIP Framework for Federal Financial Systems and JFMIP Federal Financial System Requirements. Agency, Budgeting and Resource Management Competencies * Obtain thorough understanding of the concepts of strategic planning. * Identify organizational priorities and relate them to resource and budget allocation. * Participate in the development of the organization's Strategic Plan. * Plan, manage resources, and budget for financial systems development and implementation. Evaluate costs and allocate resources necessary to develop/implement financial software solutions. * Demonstrate the capacity to develop and monitor plans on a general basis for the development/implementationof financial software solutions. IT Solutions Competencies * Evaluate proposed IT solutions and communicate technological solution alternatives including costs and time frames, to financial managers and program managers for mutual decision making. Identify efficient IRM solutions for organizational manual processes, functional needs, or problem resolution. 8 * Stay abreast of current technologies and how they can assist with financial systems technological solutions. * Understand the inner technological workings of the financial systems including design, security, change management, backup and recovery procedures, and updated documentation procedures. * Relate potential impacts of technological solutions on the organization in terms of efficiencies introduced, manual processes eliminated, and cost and resource savings. * Build effective collaboration among IT personnel, financial system analysts, financial managers, and program managers when discussing technological solutions. * Evaluate financial software vs. organizational needs. Understand methods for evaluation of financial software. * Understand the procurement process for purchasing financial software. * Demonstrate capability to establish a working relationship with providers of financial software. * Understand the concepts and techniques of cross-servicing, outsourcing and franchising as they relate to the organization's needs and support for financial systems. Financial Systems Oversight and Management Controls Competencies * Ability to work with financial auditors and financial systems analysts to audit automated financial systems, respond to findings, and apply improvements to these systems. * Identify financial system improvements through the auditing process and apply technological solutions to strengthen the system. * Apply the concepts of business process re-engineering to the entire financial operation to conform as much as possible to the capabilities of the financial software package selected for implementation. Acquisition and Contract Management Competencies * Understand IT contract management models and methods, including past performance evaluation. 9 Learn IT acquisition best practices. Describe alternative acquisition models, (e.g., franchising, contracting out, performance-basedcontracting). Demonstrate the capacity to act as COTR of IT contracts, including budgeting, monitoring of performance, verification and payment of invoices, allocation of funding, and resolution of issues. 10 Specialized Knowledge Required for Financial Management Systems In certain instances, such as analysis, design, and development of financial management systems, the IT professional will be required to develop specialized knowledge related to the unique requirements of the particular system. The matrix that follows identifies various financial systems common throughout the government and lists the specialized knowledge required for those persons engaged in the development of those systems. 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Information technology professionals will also benefit from management training in leadership, quality management, team management and oral and written communications. These skills will facilitate application of both IT and financial management competencies. The Internet is an excellent resource for finding specialized training courses and seminars offered by both private and public sector organizations. FinanceNet maintains a current list of training and development courses and providers which can be accessed at the URL provided below. http://www.financenet.gov 18 I I U.S. General Accounting Office Joint Financial Management Improvement Program Bulk Rate Room 3111 Fees Paid 441 G Street NW Postage & Fees Paid Washington, DC 20548-0001 GAO Permit No. G-100 O FF I C I A L B U S I N E S S Penalty for Private Use $300
Core Competencies in Financial Management for Information Technology Personnel in the Federal Government (Exposure Draft)
Published by the Government Accountability Office on 1997-09-01.
Below is a raw (and likely hideous) rendition of the original report. (PDF)