From scorekeeper to business partner: The evolving role of government financial executives.

• Author: Kinghorn, C. Morgan, Jr.

By leading the charge to entrepreneurial government and developing nonfinancial competencies, government financial executives can step out of the shadow of their technical expertise and into an expanded role at the policymaking table as valued business partners.

Traditionally, government financial executives have occupied the role of organizational scorekeeper. In this capacity, they are responsible for collecting, synthesizing, and reporting the financial information used by elected officials and senior managers to make important policy and operating decisions. As such, the finance function in most governments is regarded as a critical pillar of decision support. But much like the scorekeeper in a sporting event, most financial executives have little, if any, direct influence on the final outcome.

Times have changed. The increasing importance of information technology in public administration and ever-louder calls for accountability to stakeholders have thrust government financial executives into a more active role in decision making. They are being called upon to lead the charge toward entrepreneurial government and performance-based management. For most of these executives, this transformation represents a significant departure from their traditional scorekeeping duties. Success in this new role will ensure that financial executives have a place at the policymaking table as valued business partners.

Exhibit 1 shows how the role of the chief financial officer/finance director is changing from scorekeeper to trusted business adviser and partner. Although this transformation has been occurring in the private sector for quite some time, it is a more recent trend in government. As business partners, financial executives spend most of their time applying their expertise to key strategic and operating decisions and virtually none to traditional back-room accounting operations such as account reconciliation, payment processing, and historical financial reporting.

This shift in priorities does not necessarily require the hiring of additional employees to take up the slack. As Exhibit 1 illustrates, the size of the finance function, already shrinking, will diminish even further over time. This time reduction is made possible by redesigning finance-related processes, introducing best practices, improving and integrating financial and other information management systems, and, in some cases, outsourcing financial operations to outside providers. As part of the transformation of the finance function, control activities ate built into nonfinancial processes so that nonfinancial managers can assume more responsibility for them. This allows highly trained financial professionals to make the best use of their expertise.

This is not to denigrate the traditional duties of government financial executives. Compliance with accounting and financial reporting standards, accurate cash reconciliation, timely processing of financial transactions--these are all important activities. Yet, the truth is that detailed accounting work is simply "doing the knitting." Elected officials, senior managers, and program directors only notice these basic financial management tasks when they are done poorly. To join these other...