Federal financial managers skeptical about reorg, survey says

Many federal financial managers have doubts that the Trump administration's plan to reorganize the federal government while slashing civilian budgets will improve agency operations, according to the annual CFO survey from Association of Government Accountants and Grant Thornton.

Of the 200 government financial managers who responded to the online portion of the survey, 47 percent said they believed the Office of Management and Budget-led reorganization will not improve the efficiency of agency operations. An additional 37 percent of respondents said the reorganization efforts will result in either moderate or significant decline in operational efficiency.

Just 16 percent of respondents predicted moderate or significant improvement from the reorganization effort.

"I think a lot of what you see here when you see that is people saying, 'oh, we've seen this before,'" said Managing Director of Grant Thornton Public Sector Jim Taylor, who noted that the online respondents tend to be more rank-and-file, but added, "we do have CFOs that say, 'hey, we've seen this movie before.'"

Another issue reported by many respondents is that the administration is trying to advance its agenda without regard for how the machinery of government operates.

"This administration is trying to get things done, but they don't understand the bureaucracy; they don't understand that you can't break certain rules," said one commentator. The report's authors said that remark "captured the vibe of several responses received."

Part of the issue is that while reorganizations and modernizing IT systems can achieve long-term efficiencies, they are expensive in the short term. But the Trump administration has simultaneously proposed cutting civilian budgets and shrinking the workforce.

The three areas most commonly cited as the "greatest current challenge" facing CFOs, respondents said, were budget uncertainty, human capital and IT systems — with those three answer totaling 92 percent of responses. That figure crept to 95 percent when assessing their "greatest future challenge."

While budget uncertainty is a perennial issue, "this has been a particularly acute time, in terms of a lot of other things happening," said Sheila Conley, deputy CFO of the Department of Health and Human Services.

Chip Fulghum, deputy undersecretary for management at the Department of Homeland Security, said much of the reorganization will be a long-term lift, and some of the DHS reorganization goals may not be included in the fiscal year 2019 budget.

"OMB has put a lot of pressure, and rightfully so, on us to put stuff in the '19 budget," he said. "While there will be some things in the '19 budget, I expect a lot more of our initiatives to be longer term efforts."

Taylor said while the Trump administration "maybe wants to make a splash by eliminating whole programs or maybe whole agencies," many of the reorganization details could build on previous efforts to reduce redundancies, consolidate data centers and move to shared services.

Conley added that mission-support functions -- namely, financial management, IT systems, cybersecurity and human resources -- are "the highest risks that are facing our organizations."

The risks posed by outdated IT systems and inefficient HR functions have become so pressing, "it's beginning to cripple our ability to deliver on our programmatic missions," she said.

Another challenge facing the effort is the persisting political vacancies across government. The OMB memo directs agencies to move ahead with their reorganization plans, but some lack politically appointed senior leadership that would provide direction.

"It's not what we expected," Assistant Secretary for Administration at the Department of Transportation Keith Nelson said of the vacancies. "We kind of figured at this time we'd be fully staffed up, but we're not letting that slow us down or stop us."

While Nelson noted that "much of what we do doesn't require political leadership," he acknowledged that due to lingering vacancies in Senate-confirmed safety positions at Transportation, "we're not as good as we could be."

Below the senior leadership level, some agencies are still impacted by hiring restrictions set out by the administration. And if the Trump administration is going to successfully pull of a comprehensive reorganization, "its workforce-management policies and practices will have to be dramatically reformed, and quickly," the report states.