Financial Management: Providing a Foundation for Transition - AGA

15Top risksRespondents to the in-person interview of executivesand the online survey of managers indicated that thetop three risks to accomplishing their mission areproblems with, in order, human capital, leadershipand systems. Compliance is a strong fourth issue forthe executives (see Figure 2). Other issues includeCongressional and Executive Branch politics, the needfor more accountability, lack of standard operatingprocedures and poor or unintegrated financial andperformance measures.Figure 2:Relative importance of major risks categories by percentageof times mentioned in executive survey responses% of all mentions4035302520151050Human Capital Systems Leadership ComplianceRisk categoryHuman capitalTo government leaders, human capital meanspeople with the right skills and experience. Ourannual surveys indicate that, for the past severalyears, human capital has been the number oneconcern of CFOs and other financial executivesin both defense and civilian entities, far moreso than any other issue. For example, in the2008 survey, more than twice as many executiverespondents listed human capital as a riskthan systems or leadership. This finding willnot surprise anyone in a government supportfunction such as financial management. Forthe past 10 years, the number of federal financeand accounting employees either has declinedor held steady. At the same time, the amount ofwork required for many support functions hasrisen, in part because of increased mandates forcompliance with outside rules (see box, Outsidemandates for financial information, on page 12).As a result, say respondents, they face the humancapital problems described below.• Federal hiring procedures are complex andlengthy, say many respondents. People todayare not willing to jump through as manyhoops or wait as long as they once were.• For several years now, top leaders have knownthat Babyboomer retirements are causingbrain drains throughout the government. Saysone financial executive, “I expect to lose 65percent of the staff in my division in the next5 years, which includes Acquisition Officers,Contracting Officers and Senior Accountants.A lot of institutional knowledge will be lost,especially in the areas of systems.”• A shortage of mid- and senior-level financeand accounting professionals in the governmenthas caused some entities to lure themaway from others with promises of promotions,training and meaningful work. “Wedon’t have people in the pipeline who arecapable of taking some of our middle- andupper-level management positions,” says anexecutive, “So it is easier to hire people fromother bureaus.”• Private companies and enforcement agenciesoffer higher salaries to talented financial professionalsthan can most governments.