Smarter Supply Chains: Helping Government Move Better and Faster

Wednesday, June 5th, 2013 - 13:20
The world is changing rapidly, profoundly, and in every direction. For the U.S. federal government, an increasingly challenging political and fiscal environment provides a powerful catalyst for supply chain transformation.
In the private sector, political and economic fallout from the 2008 financial crisis have driven commercial enterprises to intensively reevaluate their supply chains and apply top talent to redesign and improve processes, develop new tools and solutions, and quickly implement change to deliver immediate results and become more efficient.
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The Revised "Operator’s Manual for the New Administration"

Thursday, February 28th, 2013 - 15:31
Tuesday, December 11, 2012 - 13:49
Four years ago, the Center for The Business of Government released “The Operator’s Manual for the New Administration.”  This report provided practical insights on how to make agency operations work more effectively, drawing on the first ten years of reports from the Center to draw lessons learned in areas ranging from leadership to money to techno

The Operator's Manual - An Update of Chapter 5: Contracting

Thursday, January 17th, 2013 - 10:00
Thursday, January 17, 2013 - 08:29
MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIESSubject: Contracting In addition to managing your own workforce, you will be responsible for managing a large contingent of contractors. You will need to ensure that contractor performance is high and that contractors are meeting and hopefully exceeding your agency’s expectations, as set forth in your contracts.

A County Manager’s Guide to Shared Services in Local Government

Monday, January 14th, 2013 - 17:06
Monday, January 14, 2013 - 15:03
The recent IBM Center report, ‍A County Manager’s Guide to Shared Services in Local Government, by Eric Zeemering and Daryl Delabbio explores the trend amongst local governments to pursue various shared services arrangements. 

The Cost of Budget Uncertainty: Video Blog Interview with Dr. Phil Joyce

Wednesday, December 12th, 2012 - 11:06
Wednesday, December 12, 2012 - 09:37
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Governing in the Next Four Years

Sunday, December 2nd, 2012 - 12:03
A Presidential election year provides an opportunity to step back and consider major issues that will face government in the future. Our Center has devoted significant attention to this topic 4, 8, and 12 years ago, and this year we will build on that tradition.

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By Michael J. Keegan

Conversations with Leaders

Profiles in Leadership

Director, Office of eDiplomacy, Bureau of Information Resource Management (IRM) U.S. Department of State
By Michael J. Keegan
Principal Deputy Associate Administrator, Office of Citizen Services and Innovative Technologies, U.S. General Services Administration
By Michael J. Keegan
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By Michael J. Keegan







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Danny Werfel

Thursday, September 27th, 2012 - 14:55
Mr. Werfel is responsible coordinating OMB's efforts to initiate government-wide improvements in all areas of financial management.
Radio show date: 
Mon, 10/01/2012
Intro text: 
Mr. Werfel is responsible coordinating OMB's efforts to initiate government-wide improvements in all areas of financial management.
Complete transcript: 

Originally broadcast October 1, 2012

Arlington, VA

Welcome to The Business of Government Hour.  I’m Michael Keegan, your host and Managing Editor of The Business of Government Magazine.  Sound financial management is essential to the effective stewardship of taxpayer dollars and enabling federal agency decision makers to make tough choices on day-to-day and long-term management challenges. 

Good government, that is government fiscally responsible to its people has as in its charge making operations more efficient and accountable, getting rid of waste, saving money, and making services more responsive.  In an era of tight budgets this charge has taken on new significance beyond the fundamentals, to ensuring the improvement of financial management government-wide. 

What are the top federal financial management priorities?  How does the Office of Management and Budget work to implement them?  What is the federal government doing to reduce and eliminate improper payments, and how is OMB working to transform the way government does business? 

We will explore these questions and so much more with our very special guest, Danny Werfel, Comptroller, Office of Federal Financial Management within the Office of Management and Budget.  Danny, welcome to the show.  It’s great to have you back.

Danny Werfel: It’s great to be here, Mike.

Michael Keegan: Also joining our conversation from IBM is Steve Watson.  Steve, welcome.

Steve Watson: Thank you, Michael.

Michael Keegan: So, Danny, before we delve into specific initiatives, perhaps you can provide us with a brief overview of the history and mission of the Office of Management and Budget?  How is it organized?  What’s the size and scale of its operation?

Danny Werfel: The Office of Management and Budget has a long history.  I think its birth was in the 1920s, actually, when at that time it was called the Bureau of Budget, and it moved out of the Treasury Department and became a standalone entity that had more direct nexus to the President, the White House, and the Executive Office of the President.

Later on in its history it added management functions to it, and the name expanded to the Office of Management and Budget.  We have roughly 500 people in the organization, which is small by government standards, so it’s a place where everybody knows your name, and it has a relatively flat hierarchy, which what I mean by that is because of our size and because of the need for us to be nimble and dynamic in meeting the various challenges that we have it’s not unusual for anyone from the highest ranking political appointee, to an SES branch chief, or even a GS9 policy analyst right out of graduate school to be meeting with the Director of OMB and to be involved in a lot of kind of dynamic and high profile situations.  So for that reason it’s an enormously exciting place to work.

And just to give you a little bit more detail on how we’re structured, of the 500 people that we have it’s about two-thirds are on what we call on the budget side of the house, and one-third on the management side of the house.  And on the budget side of the house we essentially break-up the government into smaller pieces and have dedicated offices that work in those areas.  So we’ll have a labor branch, an education branch, and a homeland security branch. 

And some of their core responsibilities involve, of course, developing the budget requests for that agency.  And then the examiners, in addition to working on the budget, involve themselves in a whole host of activities, just soup to nuts, everything that you can imagine is involved with that agency. 

And that’s really where - that’s likely a good segue to the management side of OMB, which takes much more of a horizontal view.  The offices that are set-up on the management side for things, like financial management, which is the organization that I currently lead, procurement, performance, information technology.  We have an office that deals with information and regulations, and they are looking across - those offices have responsibility across the entire government. 

So, for me, as an example, I have relationships with every chief financial officer in the government.  I learn about what they’re doing, what their challenges are, and what the solutions that they’re looking to initiate to overcome those challenges. And that’s where our role can be so critical, because our responsibility is across government we don’t have a particular responsibility to dive deep into the Education Department or the Homeland or the Defense Department.  Instead our focus is on the area that we’re responsible for, in this case financial management, across the whole government. 

Steve Watson: That is a good overview.  If we go a little deeper can you talk a little bit more about your duties and responsibilities as Controller and how the Office of Federal Financial Management supports OMB’s overall mission?

Danny Werfel: Absolutely.  The Office of Federal Financial Management was created in the Chief Financial Officers Act of 1990.  What was going on at the time was there was a growing sense through a variety of different inputs, such as reports from the government Accountability Office, reports from inspectors general, that were pointing to fundamental lapses that were going on in agencies and our ability to track funds, account for federal funds, mitigate instances of fraud, error, and waste, and there was a desire to develop a framework across government to manage these challenges more effectively. 

And they looked to the corporate environment as a model.  And one of the things they saw as a gap was the fact that corporations generally have chief financial officers in place and also have kind of a rallying cry around a set of standard financial statements and an audit of those financial statements that helps instill some discipline and some rigor around fundamental questions of how the money is being tracked, how assets are being accounted for, how liabilities are being recorded and looked at, and how these items are being made transparent to shareholders in the corporate environment and, obviously, the analogy for the federal government would be the taxpayer.

And so that - the CFO Act was born out of the desire to establish a framework across government that could help us improve our discipline and our approaches on these basic issues of accounting internal controls and finance, and modeling it after the private sector, the CFO Act of 1990 created a chief financial officer position within all of our major federal agencies, further initiated the process of financial statements, annual financial statements, and put the CFO in charge of the development of a system and a process and technologies that were going to help capture all that information, put it in financial statements and have it audited.

Michael Keegan: Well, I’d like to pick-up on the idea of challenges and, in particular, given the portfolio you manage and the expansiveness, what are your top three challenges that you face?  And how have you sought to address those challenges?

Danny Werfel: Well, let me start with the most obvious challenge that I think anyone sitting in a government leadership position is looking at right now, and that is the declining resource environment that we find ourselves in.  It is no surprise that the budget cuts that we’re facing impact all parts of government, and chief financial officers are no different.

And so you have this dual-edged challenge of trying to modernize and make government more efficient and, you know, we say a lot it’s never been more critical for us to do so because of the challenging budgetary situation that we find ourselves.

The number one challenge that I have right now is working with federal agencies to define those steps that they can take and those investments that they can make that are going to have the highest impact and that are going to be the most shrewd for lack of a better term in managing this tension.

The second one that I would articulate is in order to navigate the tension that I just described of a lower resource base and a need, a necessity to become more efficient, we’ve got to break old habits that - and we’ve got to innovate to do so.

So the example I’ll use is with respect to information technology, and we have an approach that we’ve taken to modernize business systems in government over the last decade.  And the approach has proven to be slow and expensive. We have to do them more quickly and get more critical performance out of them.

And the third issue, and it’s very related to the other two, is what I call creating a culture of collaboration. If one agency has a success, how do we create an environment that other agencies are obsessed with what that success was, how was it achieved, and how can I learn about how that success might impact my area?  Or a failure, what happened, what went wrong?

Michael Keegan: Very interesting. Speaking of infusing this passion that you have, I’d be remiss in not asking you, what are the characteristics of an effective leader?  Because you really, I mean your story is a testament to that.

Danny Werfel: There are three things that I think are critical to professional development and advancement.  And I say patience, competence, and relationship building.  And I think they’re all three, they’re interrelated and they’re all critical. 

Patience is that you stick around, you don’t jump at the first sign of trouble, you don’t jump at the first great thing that comes your way, you’re patient and you’re plodding and you stick around. 

Then there’s competence; being good at what you do.  Not only are you demonstrating an ability to see the long term and not react in a particular moment, kind of that steady hand at the tiller, and also to the extent that you have studied your craft and understand its various moving pieces.  I mean I don’t think you have to be a genius to be successful, but to the extent you’re competent and you’re a student of what you’re doing and trying to improve.

And then, third, relationship building, and that is, you know, it sounds trite but it’s being a team player.  Sometimes I use the term low-maintenance; you want to be low-maintenance.

My new favorite phrase, I use it and my staff is getting bored with it, but I use it all the time, I say I do not have a monopoly on the right answer, and I don’t. That recognition upfront that I don’t have a monopoly on the right answer helps develop kind of a collaborative spirit to how we attack these challenges.

Michael Keegan: What are the top federal financial management priorities?  We will ask Danny Werfel, Controller, Office of Federal Financial Management within OMB, when our conversation continues on The Business of Government Hour.


Welcome back to The Business of Government Hour.  I’m Michael Keegan, your host, and our guest today is Danny Werfel, Comptroller, Office of Federal Financial Management within OMB.

So, Danny, you mentioned in the last segment, you identified some of the challenges you face in your role, and I want to step back a bit and talk about some of the priorities that you have, some of the top Financial Management priorities the administration is focusing in on towards the tail end of its last year?

Danny Werfel: Well, the way I think about the work that we’re doing, I put it into two different buckets of activities. It’s either about cutting waste or it’s about building a government for the 21st Century.

We have this initiative we call the Campaign to Cut Waste.  It was launched by the President through an executive order last spring, in June.  He put the Vice President in charge of it, which relates back to my - I’ve had several opportunities to work with the Vice President directly, first, on the Recovery Act, now on the Campaign to Cut Waste, and the whole Vice President’s Team, who are fantastic to work with.

And we have a whole variety of different things we’re trying to achieve under the Campaign to Cut Waste.  We are cutting administrative savings, things like IT, printing and travel, vehicles or fleet.  This is kind of the bread and butter stuff that won’t necessarily eliminate our deficit by any stretch, but represents two things.  First, they represent dollars and every dollar counts.  I’m the most frugal guy I know, so if I hear about an agency that are involved in something where $5,000 was wasted or $5 million or $50 million I’m upset in either way, you know, every dollar counts and these are practical things that can be - we don’t have to, for example, maintain - we don’t have to get rid of an automobile that’s fine just because we’re interested in the next upgrade.  We can hold on to our vehicles longer.  We don’t need a printer on every desk.  We don’t need to travel just for the sake of travel without a critical purpose for that travel.

We issued that 20 percent cut requirement back in November of 2011, and then we put in the President’s budget all the agencies’ commitments on that 20 percent cut, and it totaled $8 billion. 

Within the Campaign to Cut Waste, there are other things.  There’s improper payments, and managing our real estate more effectively. 

I’d say on the 21st Century government there’s a lot going on, but to pick a top priority, I’d pick how are we going to move forward in open government and transparency.  And, in particular, where I have the most responsibility and where I lose the most sleep at night is how are we making federal spending more transparent. All of those things are part of a strategic set of priorities that I’m working on with the financial management community.

Steve Watson: Danny, you mentioned improper payments, can we dig into that a bit?

Danny Werfel: Yes.

Steve Watson: The government makes trillions of dollars in payments over a year and I’m sure there’s going to be improper payments to some degree no matter what you do.  Could you talk a little bit, first of all, what is an improper payment?  And then get into; I know it’s an important area for you, the actions you’re taking to reduce improper payments in government?

Danny Werfel: We pay a lot of money out.  We pay benefits to individuals, we pay contractors, we reimburse doctors for Medicare bills, grants to states, all different variations of payments, we guarantee loans, et cetera.  And we make mistakes.  The money goes in the wrong amount.  It can go to the wrong individual.  It could go in the right amount to the right individual but then be used for the wrong purpose.  And so these are the types of mistakes. The more typical improper payment occurs when we lack the ability to validate whether the payment is right or not. 

The largest sources of error in the government are in Medicare and Medicaid, they make-up half our balance sheet, and there’s a whole different, you know, it’s just a very complex terrain in terms of how we can make different types of errors in Medicare.  And sometimes the issues can be really, really challenging to authenticate.

But within all of this what we’ve tried to do is find the errors where we have the best chance of initiating changes to improve, and there are some promising areas where we are leveraging data and technology and innovations and ways to drive down these errors, and I’m very excited about that.

Steve Watson: Danny, following up with that last theme of using technology, can you give us some success stories or types of technology you’re using to reduce improper payments?

Danny Werfel: Absolutely.  I think the way I’d summarize it as a global matter is we all know that we live in an information age, and that information age is changing rapidly and it’s very dynamic and game changing. We have access to so many different sources of information that federal agencies didn’t have before that can help us make smarter decisions about who a person is, what their household size is, if that’s relevant to the eligibility determination, what their income is. We can manage that data more effectively. 

Let me give you some real life examples.  So in Medicare, as an example, one of the causes of error can be that we have people that are defrauding the government. What HHS is getting better and better at doing is figuring out when there’s an unusual number of procedures in a certain location.  So they’ll say, oh, look.  There have been six endoscopies in a three-day period in this rural part of Texas. That is an anomaly, that’s unusual.  HHS has set-up an entire what they call Fraud Lab, where they have data analysts kind of looking at this network and macro of data to look at these different issues.  And, again, that is a major game changer.  That did not exist five, six, seven years ago, and it is the advent of new technologies, new forensic approaches that is making those changes happen.

Michael Keegan: Well, I’d like to go forward about transparency, you had mentioned transparency and making financial information from the federal government more transparent to the user, I want to tackle that as one of your priorities.  What did you learn from the Recovery Act, and what are some of the key lessons learned in that area?  And what more needs to be done?

Danny Werfel: Well, it’s a great question.  When the Recovery Act was enacted in February 2009 it required the development of a new nationwide cross-government data system, and for it all to be done in a matter of months, the technology, the definition of the data, and then the various training and outreach to what turned out to be over 100,000 different recipients that were going to have to report.

And we learned so much about ourselves as a government, about the challenges we have with the fact that our data and our accounts are not standardized, that in many ways the information that we hold in our financial systems doesn’t lend itself well to being produced in a way that the citizens are demanding and can be well understood.  And we learned about some of the challenges that can take place when you rely on the recipients to report the information. 

I first thought this is great because it takes all the pressure off us, the recipients will be the responsible party.  So if the City of Oakland, as an example, reports the number of jobs they created then the City of Oakland is going to feel the wrath of the local media, of Congress, of GAO, you know, because they have the responsibility to report. 

And boy was I wrong, because when mistakes were made it ultimately fell, as I should have predicted, on the President and on the Executive Branch of government. 

And the big lesson learned there is that at the end of the day you have to route everything back to the agency.  The agency has to have a solid and comprehensive understanding of what it’s paying out, who it’s paying out to, and needs to manage any anomalies in the data.  They 

needed - ultimately even though the recipient was the one reporting, the agency should have immediately picked up on the fact that the Congressional District was wrong there. 

And so as we move forward on spending transparency I think there is this debate that’s going on in some circles about whether we anchor the program to what the agencies are reporting they spent out versus what the recipients are reporting they receive.  And I think the ultimate answer is that both data points are going to be necessary, they have to reconcile to one another, but ultimately it’s the agency that’s going to be, what we call, the control total.

Michael Keegan: Well, that’s interesting.  Are you folks doing anything, are there any key initiatives around strengthening and improving the quality of reporting for financial information?

Danny Werfel: Yes, and that’s another place where the Recovery Act came into play/ 

Let me give you an example of what I think is the most important thing that we’re doing and why it’s so important. We have the federal version of an income statement.  And that information is produced, it’s audited, and we spend a lot of resources on technology and processes to report that information and have it audited and have it be reliable, and we do a very good job at it.  Over time we’ve gotten much, much better at it.

The issue is that all of that energy around making sure that every “I” is dotted and “T” is crossed and all that data is accurate, is done outside of the context of our USA spending reporting. What happens is that you’re missing an opportunity there to build into an existing quality control process that we’ve spent a lot of time on and invested in and have up and running and have developed very well, you’re not using that to audit and to initiate quality control on your Recovery Act or the USA spending information.

So we’re trying to do something to bring those two together, so we created, OMB did, what we call the Statement of Spend.  It’s a new statement that hadn’t existed before, and we’ve had different agencies piloting this Statement of Spend.  And the notion would be it would be a financial statement that would aggregate critical information on what you’re spending that if you were to get a clean audit opinion on that Statement of Spend it would be an indicator that the information you’re feeding into USA spending is reliable and it’s comprehensive.  We think that’s going to have a large impact on improving reliability over time.

Michael Keegan: Wonderful.  How is OMB working to transform the way government does business?  We will ask Danny Werfel, Comptroller, Office of Federal Financial Management within OMB, when our conversation continues on The Business of Government Hour.


Welcome back to The Business of Government Hour.  I’m Michael Keegan, your host, and our guest today is Danny Werfel, Comptroller, Office of Federal Financial Management within OMB.

Danny, I’d like to talk a little bit about the administration’s efforts to get legislative authority to reform and consolidate the federal government.  Would you tell us more about this effort?  What are some of the benefits of doing such a thing, and what are some of the challenges?

Danny Werfel: I’m glad you asked.  I think the President was very clear and has been clear, and I mentioned it earlier in his interest in a government for the 21st Century. It’s kind of just a fundamental question of whether you design your objectives and your goals around what your organizations of government are set-up to do, or alternatively do you pick the right objectives and goals and then align your organizations to most effectively meet those goals.

And I think the President believes that the latter is the right approach to better government, and in order to do that, in order to breathe life into that, to make sure that our agencies are structured in a way to meet 21st Century realities and priorities, you need a mechanism by which to more fluidly realign and reorganize government.  And right now we don’t have an effective mechanism in place. 

From the 1930s to the 1980s there was this authority that the President had to initiate proposals to reorganize government, and Congress would - could get the proposal and it would be done on a fast track basis.

What the President asked for is authority that is similar, but we think improved, to the authority that existed for 50 years, from the 1930s to the 1980s, where the President would be able to submit for up or down vote proposals to reorganize government, and we made some enhancements that we think are important. 

For example, and I’ll just mention the most critical, under our proposal for reorganization we can only submit proposals that save money, that actually add to efficiencies. And so, you know, to make sure that this is being done out of a desire to limit the complexity of government, to streamline government, and to make it more user friendly and to have it reflect, again, 21st Century realities.

The trading competiveness proposal alone would save $3 billion over 10 years, but would also kind of bring together a variety of different critical resources, and how important is it today to have an effective set of programs around job growth, economic growth, trade and competitiveness, it’s as important as it could ever be. 

But the bottom line here is that if you want a government that’s going to be dynamic to meet emerging challenges, and we have many emerging challenges, then you need a flexibility that needs to be in place to reorganize government in ways that reflect what’s going on in the 21st Century. 

Steve Watson: Switching gears here, let’s talk a little bit about the government-wide financial statements and the audit of those statements.  I know most agencies now have clean, unqualified opinions, but we still don’t have it yet on the government-wide financial statements.  Can you talk a little bit about the impediments to getting a clean opinion and a schedule for ultimately getting there?

Danny Werfel: Just about every agency has a clean opinion or at least a qualified opinion.  We only have one agency that still does not get an opinion on their financial statements, and that’s the Defense Department.

And so, we’re reporting in timeframes that are much quicker than we ever imagined.  For over a decade these financial statements were coming in six months or later after the fiscal year, and now they come in 45 days after the fiscal year.  The number of weaknesses that are found in these financial statements are not only getting clean opinions, but each of these opinions have findings of where the auditors are raising concerns, and those are steeply declining over time.

So we are hitting a rhythm and getting to a stable kind of performance environment where it’s almost the, you know, we almost take it for granted at this point, where virtually every agency is going to have a clean opinion or at least a qualified opinion.

And one of the main reasons why we don’t have a clean opinion at the consolidated level is the Defense Department.  They’re really kind of the last domino to fall.  The challenge is that it’s a very large and complex domino. It’s the largest and most complex organization in the world.  It has grown-up in an environment over many, many decades of having different approaches to its procedures, to its account structures, to the way in which it makes transactions and captures information on those transactions.  The systems don’t integrate and/or are not interoperable with one another.

In order to modernize those systems it’s expensive, it’s complex.  They are geographically dispersed.  They’re internationally dispersed; they just have domestic and international presence.  And the clean up that needs to be done in that organization is exponentially more challenging than every other organization in government. 

That’s not to make excuses because they need to do it, they need to get the job done, and they have made progress, but there is still a lot to be done in this area.  I think the roadmap that they’ve set out for themselves is the right roadmap.  I think Secretary Pineta has been clear in terms of asking the Defense Department to accelerate their timeframes for getting some, hitting some key milestones on their audit. 

Michael Keegan: Yes, I had the pleasure of having Bob Hale on the show and he outlined some of the challenges.  But it’s a good strategy for getting it done, even the accelerated timeframe to 2014. 

But, Danny, you mentioned accomplishments, when we talked about the audit ability.  This year marks the 22nd anniversary, as I understand, of the CFO Act of 1990.  As you reflect on the federal financial management community’s progress over the last 20 plus years, what are some of those key accomplishments you want to talk about?

Danny Werfel: Well, there’s many.  I mean I know obviously there’s - we still have a long way to go to meet all of our financial management goals, and I don’t know that you ever get there because you constantly shift your risk profile to make sure that you are in a zone and in an area of continuous improvement.

But let me start, if I could, with some specifics and then make a general point.  Improper payments are an example, which we’ve spoken a lot about on the show today.  We are at a place right now where just about every major program is seeing error rate declines every year.  So there are over $100 billion in improper payments each year, and that is a staggering number that we need to do better on.  The issue is we are doing better on it. 

Several programs, about 10 or so programs make-up most of that $100 billion plus amount - Medicare, Medicaid, SNAP or what used to be called food stamps, Social Security, public housing, to name a few, the earned income tax credit.  These are some of the programs that make-up this large amount. And in every case except for one, we are essentially seeing declines in the error rate. 

That doesn’t diminish the fact that all the other programs - Medicare, Medicaid, the HUD program, SNAP and others are seeing precipitous declines in their error rate, and that’s having an impact on the number of improper payments we’re making.  And I think that is a reflection of these error rate declines, the fact that in these major programs the improper payments are going down, that the work that we’re doing is starting to have an impact.  One of the lessons learned in improper payments or in anything is that modest corrective actions and modest strategies are going to lead to modest results. 

You need to have innovation and you need to push the envelope in order to get changes and, in particular, at HHS, they are really, really passionate and I would say almost relentless in their pursuit of driving the error rates down in Medicare, Medicaid, and that is starting to resolve.  If you just look at the numbers those error rates are trending downward.

Now on a government-wide basis because the error rate is trending downward over the last two years those error rate reductions equate to $20 billion in improper payments avoided.  In other words, if the error rate would not have declined the way it did we would be at an improper payment amount $20 billion higher than we are today.  So we’re very proud of that.

Let me shift gears to real estate and make a key point.  In the previous - it’s an interesting thing to do, to compare the executive order on real estate that President Bush issued in 2004 versus the executive order that President Obama issued in 2010. 

The Bush EO establishes kind of the foundations of real estate management.  It put in place a senior property officer.  It required us, the government, to develop a worldwide inventory of real estate that didn’t exist at the time. 

Now compare and contrast that with President Obama’s executive order, which said very simply save $3 billion in civilian by the end of 2012 and save $5 billion in military, so save $8 billion.  I mean that was kind of the bottom line.  And I mean that was made, in part, that kind of directness of just a bottom line expectation and performance target, obviously, was made possible by the work that was done in the previous years, but it’s also a growth of the community now that we’ve built this foundation around. We’ve got the inventories, we’ve got the clean audit opinions, we’ve got more stable financial management structures in place; it’s time to make sure that we are using that foundation to execute on bottom line results for the taxpayer.

Today government waste is a national consciousness issue.  Today the transparency of where Federal dollars are going, makes up front and center issues, and the CFOs are in many cases connecting with doubles and triples.  And we’re having our setbacks, too.  That’s always part of the fabric of what we do, but I’m confident and I think that the road ahead is going to be filled with important accomplishments.

Michael Keegan: Well, Danny, looking forward, thinking about the road ahead, could you give us a sense of some of the key issues that will affect CFOs going forward?

Danny Werfel: Well, I think the number one challenge is the question: people and human resources or human capital?  We have a lot of individuals in the federal government that are eligible to retire, and so there’s some succession planning and

Also the challenges are changing and the skill sets have changed with them.  Much more specifically in the financial management community, analytics are becoming more important as we figure out how to put kind of traditional accounting functions on a more stable platform, it enables us to shift into more analysis rather than blocking and tackling and nuts and bolts accounting, which is a great thing to be able to do but you have to have the right skill sets in order to drive those analytics.

In other words, everything we talked about today in terms of executing on a set of results to cut waste or to bring government into the 21st Century the road to get there is clearer and ultimately shorter if you are driving strategic decisions about what you’re investing in, what your critical path is, and those strategic decisions are based on analysis, they’re based on looking at data, at looking at our organization, at looking at our business processes and figuring out what the right navigation points going forward are to be successful. 

Michael Keegan: Well, as we close today, I want to actually talk about that new workforce, if you will.  What advice would you give someone who is considering a career in public service?

Danny Werfel: That’s funny, I gave a speech a few months ago to the directors of about 300 public policy schools from around the country, and I didn’t intend to but I just to make it kind of a recruiting message, but I very simply stated what I was working on, what the community of people that I work with are working on, what our challenges are, and gave some examples. 

My advice for people is that it’s less advice and it’s more a kind of challenge and a sense that if you are an individual that wants to be stretched, to use your various abilities that you’re learning in school today or that you’re learning in your careers in other ways, if you want to come into an environment where the work that you do is critical to helping our country, to helping the people of this country,  if you like to be challenged and you want to serve our country in the same way that I do and the same way that the people that I work with do then it’s really an unbelievable opportunity to be here.  And we’re going to have a lot of job openings.  In some ways the budget constraints are going to constrain us going forward to a certain degree, but also we have a lot of retirements coming up.  So it’s going to be a dynamic environment.  Our workforce is going to obviously change going forward.

Michael Keegan: Well, Danny, I want to thank you for your time today.  It’s wonderful to have you back.  It’s always great to have you here.  You are very passionate and insightful about the work that you do.  But, more importantly, Steve and I would like to thank you for your dedicated service to the country. 

Danny Werfel: Well, Mike and Steve, I appreciate it.  I appreciate you having me here today.  I really enjoyed the discussion, and I think you’re doing a great service, too, by bringing on people, government leaders, to tell their story.  It’s part of that culture of collaboration that I discussed earlier.  This is one of those key pieces.  So I appreciate you for your work you’re doing.

Michael Keegan: This has been The Business of Government Hour, featuring a conversation with Danny Werfel, Comptroller, Office of Federal Financial Management within OMB.  My co-host today from IBM has been Steve Watson.

Be sure to join us next week for another informative, insightful, and in-depth conversation on improving Government effectiveness. For The Business of Government Hour, I’m Michael Keegan, and thanks for joining us.

 Announcer: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m., and visit us on the Web at

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2012 Call for Research Report Proposals

Thursday, September 27th, 2012 - 14:38
Our aim is to produce research and analysis that helps government leaders more effectively respond to their mission and management challenges. The IBM Center is named "The Business of Government" because its focus is the management and operation of government, not the policies of government. Public sector leaders and managers need the best, most practical advice available when it comes to delivering the business of government. We seek to “bridge the gap” between research and practice by helping to stimulate and accelerate the production of actionable research.

Governing in the Next Four Years: The Center for The Business of Government Looks Ahead

Tuesday, September 25th, 2012 - 13:46
We intend to look at a variety of emerging trends, offer innovative approaches to address challenges today and tomorrow, and update a number of widely read reports from prior election cycles.  We hope to engage in a dialogue with government and industry leaders, and welcome broad and deep discussion going forward.