CFO Model
December 2007
Bill Matthews
A/Executive Director
Government Accounting and Policy
Office of the Comptroller General
Context and Background
Budget 2004
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“Re-establish the Office of the Comptroller General of Canada to
rigorously oversee all government spending.
Appoint professionally accredited comptrollers to sign off on all
new spending initiatives in every government department.
– “The appointment of departmental comptrollers will be subject
to approval of the Comptroller General” and, “Departmental
Comptrollers will also have a functional reporting relationship to
the Comptroller General”;
– Professional certification standards for departmental
comptrollers will be established before the end of the year and
these standards are to be met by departmental senior financial
officers within three years.”
The Government is moving forward to audit all annual financial
statements of departments and agencies within five years.”
Context and Background
Senior Financial Officers (SFOs) in medium to large departments
• The role of the SFO has taken many different forms – “general
administrator“, “chief accountant” or “CFO”.
• Uneven focus on financial management. Potential conflict of interest
• Uneven qualifications and professional background in financial
management and reporting
• Uneven organizational positioning and authority vis-à-vis Program delivery
organization
• Lack of preparedness to deliver annual departmental audited financial
statements
• Lack of back up capacity and succession
• Over extended and stretched
Senior Full-time Financial Officers (SFFOs) in medium to large departments
and SFOs in Small departments and Agencies
• Uneven qualifications and professional background in financial
management and reporting
• Uneven level of readiness for “executive table”
• Lack of back-up capacity and succession
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The Vision
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Limited delegation of
authorities to departments by
TBS
Focusing on short and
medium term needs of the
organization
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Performing a Corporate
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Services / Administration role
and the breadth of related
activities (e.g. Finance, HR,
IM/IT Administration, etc,)
Greater delegation of authorities to
departments by TBS
Focusing on short and longer
term needs of the organization
from a strategic perspective.
Focusing on full spectrum of
financial management, and the
associated depth of knowledge and
understanding, as a full-time
“seasoned” business and financial
executive
The Vision
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Multi-tier, risk based approach for all organizations under functional
direction of Office of Comptroller General
Criteria for segmentation:
– Size of managed cash-flows (revenue, expenses and capital
expenditures)
– Accounting value of assets and liabilities under management
– Complexities of operations (e.g. geographic distribution, decentralized
management, stability of organization/operations)
– Inherent risks ( e.g. extensive use G&C)
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3-Tier model:
Tier 1
20-25 largest and most
complex organizations –
Initial target — 80-90% of
expenditures
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Tier 2
15 -20 medium size
departments
Tier 3
all others
The Vision
Responsibilities of departmental CFOs
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Full spectrum of financial management (short-term and long-term)
– Planning, budgeting and forecasting
– Accounting and reporting, internal and external ( financial and
performance)
– Financial Management policies and internal controls
– Financial analysis, monitoring and challenge
– Departmental financial systems
– Investments
• Analysis of business case of opportunities
• Sign-offs and recommendation for approval by Deputy Head
• Subsequent on-going monitoring of implementation
– Budget integrity
– Value for money monitoring (e.g. via program evaluations)
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Related Initiatives
• Other related initiatives increase the “business
case”
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External audit committees;
Accounting officer model;
Audited departmental financial statements;
Internal control certification;
Quarterly financial statements?
Accrual Based Appropriations?;
• Views of OAG and Public Accounts Committee
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Keys to Success
• Unequivocal support from deputy head
• appropriately classified - peer around the department's
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senior management table.
appropriately qualified - experience, knowledge,
personal attributes
resource the organization through appropriate
classifications
CFO needs to be a member of all key departmental
governance mechanisms.
departmental stewardship functions should be
consolidated within the CFO's organization.
Potential Obstacles
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Finding qualified candidates;
– Now; and
– Developing Future CFO’s
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Credibility – get the basics correct;
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Overburdening the function;
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Reporting relationships;
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“Phone Finance”; and
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Communication barriers
Impact on the CFO
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Must ensure fundamentals of FM are in place
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Raised the bar – Combination of strategic business and financial
advice for decision-making
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Increased demands and expectations from senior management
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Renewed commitment to enhance training and development of
employees
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Change management leadership
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Concerted efforts to align and work in partnership with OCG and
finance community
Impact on the Finance Community
 Finance Community will be expected to
support the CFOs/DMs by:
 Acting as objective, strategic advisors – business
and finance
 Playing challenge function within department
 Not to stop things but to make them work
 Integrating financial and non-financial information
 Providing fearless advice to senior management
 Developing new skills and adaptation to new culture
 Continuous learning
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Conclusions
• More than just a title;
• Can be a driver for positive culture
change;
• Feasibility challenges given resource
shortages;
• Policy not in place but expectations of
parliamentarians are clear.
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