Balancing Act

Labor's CFO Samuel Mok, front, and CIO Patrick Pizzella focus on common goals when conflicts arise.

HHS' Charles Havekost

As their jobs expand, CFOs, CIOs must sort out overlapping roles

Samuel Mok compares all the chieftains in government'CIOs, chief financial officers, chief acquisition officers and chief human capital officers'to stunt men riding motorcycles in a large steel ball. If they are not careful, they will eventually crash into each other.

Mok, CFO of the Labor Department, said CIOs and CFOs could be headed for such a collision unless someone'Congress or the Office of Management and Budget or a professional forum'clarifies each executive's role and how to better manage the overlap between the jobs.

The best example of this potential clash, Mok said, is that the Clinger-Cohen Act requires CIOs to be in charge of all IT systems, but the CFO Act requires financial managers to run all financial systems.

'Who makes the final call on building and managing agency financial systems?' Mok asked. 'Each agency handles it differently, and it is dangerous not to clarify it. It can lead to project failings.'

Although Congress to date has disagreed that changes are needed, Mok is not alone in saying the closer relationship among CXOs is causing tension.

Kerry Weems, deputy chief of staff for Health and Human Services secretary Michael Leavitt and former agency acting CFO, said the tension is a byproduct of the demands of the President's Management Agenda.

'Having to hit your marks on the scorecard has certainly been an embracing experience for all of us,' Weems said. The PMA has broadened the scope of CXOs' jobs and put the focus on results, he said.

Charles Havekost, HHS CIO, added CFOs and others must rely on CIOs to help fix financial systems or help meet human capital or competitive sourcing requirements.

Additionally, recent laws such as the Federal Information Security Management Act of 2002, the Federal Financial Improvement Act of 2002 and the Government Performance and Results Act of 1993 all require a closer working relationship between CFOs and CIOs.

Job growth

'If a financial system has IT security weaknesses, that automatically becomes a material weakness in an agency's financial audit and the CIO and CFO must get involved to solve the problem,' Havekost said. 'These and other events have repercussions in other arenas.'

And on top of laws and administration mandates, other officials said the natural evolution of the CIOs' growing involvement in agency administrative details'as opposed to concentrating on backroom IT functions'has contributed to the tension.

'The CFO always has felt that they had the lead on the top financial policy-making decisions in an agency, but now they must share it with CIOs and others,' Mok said. 'Historically, we've looked at IT as a type of service, but now they are equal and that may be hard to accept by some CFOs.'

Mok, who also was a career CFO at Treasury for six years starting in 1986, said the maturation of the roles described under the CFO Act and the Clinger-Cohen Act is part of the reason clarification is needed.

'When you have only one person who is a chief, they can do what they want,' he said. 'But if you have two or more, you will need coordination. The adjustment has to be made to be more productive.'

This adjustment is reflected at every level of the agencies as well as at OMB.

Over the past two years, OMB has issued three memos co-signed by two or more administrators of IT, procurement or financial management. In December 2004, administrator for e-government and IT Karen Evans, Office of Federal Procurement Policy administrator David Safavian and OMB's then-controller Linda Springer jointly signed guidance to mitigate the risk of electronic signatures.

'What you are seeing is a renewed cooperation between the e-government and procurement offices,' Safavian said. 'There is so much overlap here and you will see a lot more jointly signed memos in the future.'

Despite concerns over conflicting mandates, the situation is not debilitating, CFOs and CIOs said.

Patrick Pizzella, Labor's CIO and assistant secretary for management, said his agency's successful migration to a new payroll pro-vider under the Office of Personnel Management's E-Payroll e-government initiative is an example of the two chieftans working together seamlessly.
'OMB assigned the responsibility to manage the migration to the CIO, and that ended the debate,' he said. 'But we worked together on this project with payroll, human resources, security, fin-ance and IT folks.'

Pizzella said the deputy CFO and deputy CIO led the project's daily activities, while he and Mok updated secretary Elaine Chao and other staff members at weekly meetings.

'Most of the time the distinction is clear for us,' Pizzella said. 'There are times when it gets blurry and the deputy secretary helps make the distinction.'

As at Labor, the deputy secretaries at many agencies play the mediators' roles when areas overlap. The Government Accountability Office has called for a chief management officer or a chief operating officer to handle the day-to-day oversight of agency business. Recently in Congress, Sens. John Ensign (R-Nev.) and Daniel Akaka (D-Hawaii) introduced S 780, which would create a Defense Department deputy secretary for management.

At HHS, Weems and Havekost said they relied on the hierarchical management structure to clarify roles.

When he was acting CFO at HHS, Weems, who also held the position of principal deputy assistant secretary for budget, technology and financial management, said he became the CIO's direct supervisor during the office's 2002 reorganization.

'We are willing to dig in on highly complex issues and understand them at a granular level,' he said. 'We let the rule of reason prevail and try to reach common ground when we have to make a decision.'

While Mok and others see conspicuous tension, Marguerite Moccia, the CFO for the Justice Department's Bureau of Alcohol, Tobacco, Firearms and Explosives, said the roles are complementary.

Moccia, who spent three years as ATF's CIO until 2004, said both positions involve money and business transformation and are concerned with getting the best return on the agency's investment.

'The CIOs own the infrastructure for all the systems, while CFOs drive the functionality for financial and many other systems,' she said. 'The CIO plays the role, making sure the system is compatible with the enterprise architecture. They provide guidance and advice, but they don't dictate what product is used. That is a functionality decision that should be made by the CFO.'

Moccia added that the overlap usually occurs in the governance and the capital investment processes.

'There has to be a shared vision for IT governance and portfolio management,' she said. 'The CIO is accountable for the IT resources, but the CFO is accountable for all resources.'

Congress also is not convinced the roles need restructuring or redefining.

Mike Hettinger, staff director for the House Government Reform Subcommittee on Government Management, Finance and Accountability, said some management laws call for duplicative roles, but the actual positions in the agencies rarely conflict.

The committee is reviewing 10 laws that outline the CFOs responsibilities and requires them to submit reports'many duplicative'to Congress. But Hettinger said they will not look at the specific makeup of the positions.

'We can't lose sight that CFOs remain one of the most important senior level managers in agencies,' Hettinger said. 'In the private sector, they usually are the second- or third-highest-ranking figure in the company. When WorldCom got into trouble, the CFO had problems because of the fiduciary responsibilities. In agencies, the CFOs are the only ones with those same responsibilities to Congress and the taxpayers.'

In the end, though, the title matters less than the person in the position, Labor's Mok said. 'As agencies expand the roles of their managers, we have to recognize we are not in a vacuum,' he said. 'The key to success is how you harness and manage the creative tension.'

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