The Business of Government Hour

 

About the show

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

Schuyler Lesher interview

Friday, October 26th, 2001 - 20:00
Phrase: 
Schuyler Lesher
Radio show date: 
Sat, 10/27/2001
Guest: 
Intro text: 
Financial Management...

Financial Management

Magazine profile: 
Complete transcript: 

Arlington, Virginia

Monday, October 22, 2001

MR. LAWRENCE: Welcome to the Business of Government Hour. I'm Paul Lawrence, a partner of PricewaterhouseCoopers and a coach here at the Endowment for the Business of Government. We created the Endowment in 1998 to encourage discussion and research into approaches to improving government effectiveness. Find out more about the Endowment by visiting us on the web at endowment@pwcglobal.com.

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation today is with Sky Lesher, Deputy Chief Financial Officer and Director of the Office of Financial Management, at the U. S. Department of Interior. Welcome Sky.

MR. LESHER: Good morning.

MR. LAWRENCE: And joining us in our conversation is Debra Cammer, another PWC partner. Welcome Debra.

MS. CAMMER: Good morning.

MR. LAWRENCE: Well, Sky, the Department of Interior was created in 1849 to manage the development of our nation and the welfare of its people. But, I'm guessing that many of our listeners don't really the true range of responsibilities and activities it has. Could you take a minute to describe this mission as activities for our listeners?

MR. LESHER: I'd be happy to. The Department of Interior has a mission to protect and provide access to our nation's cultural and natural heritage. It, also, honors the trust responsibilities to our tribes and our commitment to the island communities.

Now, that's sort of a broad mission that has been established for the Interior. It's been around since 1849. But, it's made up of a series of bureaus that you would � some of them you will recognize and some of them you will not. The one that comes to mind first is the National Park Service, and I think most people have had a chance to visit the national park system for enjoyment, education and, it gives them a chance to get outside into the natural wilderness that it basically oversees. It manages over 370 parks.

There are a number of other operations, however, some of which you may be familiar with, like the Bureau of Indian Affairs, which we have responsibility for, which oversees over 550 American Indian tribes and Alaskan native tribal government.

The Fish and Wildlife Service, which is the organization that oversees the national refuge system. And, again, it has over 530 national refuges that it oversees.

The Bureau of Land Management, which oversees a great deal of the western United States in terms of managing the land for both its health and its diversity and productivity for current generations and the future generations.

The Bureau of Reclamation, which is one that you may not know the name of, but they're the organization that oversees the water out in the west. It actually, it's the largest supplier of water in the 17 western states. So, these dams that you hear about out west, these are under the Bureau of Reclamation.

The National Geologic Survey, which is an organization which is the largest U. S. natural science and mapping agency, and it contributes and oversees a great deal of the geologic research and, also, is the organization that when you have earthquakes, they're the ones that have to get involved with that.

The Minerals Management Service, which oversees our, particularly, our outer continental shelf and the oil exploration there. And we collect over $5 billion worth of royalties through that organization.

Then, one of the smaller ones, which is the Office of Surface Mining, which oversees the coal mining projects and the reclamation of those particular projects.

Then, there is the Office of the Secretary and some other small organizations that, basically, provide the management for the organization.

MR. LAWRENCE: Well, put it in context. How many people work for the Department of Interior? And, I guess, give us a sense of the different skills. I, sort of, imagine all hardy outdoors type people until you got to the end where you talked about the royalties collecting. It seems like such a wide range of skills needed to work there.

MR. LESHER: Well, we have over 66,000 employees. They're spread all over the United States, and the continental United States. And, because of our responsibilities for the island communities that we have trust responsibility for, there are individuals in a number of the islands in the Pacific.

So, you'll find a variety of individuals. Certainly, the park rangers and the people that you might normally think of. But, in the geologic survey, you have the geologists. And, certainly, in collecting the revenues, you have a number of people that are involved with the financial side.

But, the variety of � I would say that even in some of the operations, we have a large law enforcement that, basically, is involved with overseeing the land and the park rangers and, certainly, Bureau of Land Management.

Plus, you have the hydrologists and the other people that are involved with overseeing. So, there are a lot of technical people that are involved in various operations. You have the management individuals. And, then, you have individuals dealing with the Indian issues on the various reservations and a lot of issues that we have to deal with there.

So, it's a very broad and diverse organization. I might mention there are also a number of people that are involved in rescue operations. Certainly, out in the parks, you hear about these on occasion, but there are a lot of rescue operations that go on all the time where people get into trouble out in some of the areas, and they'll take helicopters and whatever to go in and pull them out.

MS. CAMMER: Sky, could you talk about your responsibilities as the deputy chief financial officer and director of the Office of Financial Management at DOI?

MR. LESHER: Yes. In terms of my responsibilities, I report to the chief financial officer, who is a political official. It is the deputy assistant secretary for Policy Management, Budget and the Chief Financial Officer. That individual is within the Office of the Secretary and is responsible for the overall management of the department.

My responsibilities, as the deputy chief financial officer, are to deal with the financial policies, to ensure that our various bureaus are complying with those financial policies to deal with the accounting systems and ensure those systems are supporting the needs of the department.

And, another area which is referred to as the Management Control Area, which is to oversee the reviews that we do to ensure that there is some integrity in our operation, as well as, financial integrity to the systems.

And, as one of those responsibilities, I also oversee the preparation of the financial statement, which is the reporting at the end of the year. Actually, we will be reporting � we are reporting those on a quarterly basis to, basically, provide information; how well we've done, and also to link up with the performance reports that are required. So that we are now moving to combine that financial information with the performance information on how well we've done.

MS. CAMMER: Your responsibilities are pretty broad. Could you talk about the skills that are required to have that position?

MR. LESHER: There are a number of elements, and I think it has to do with, not only the technical side, which is the one that people would normally associate with it, which is the accounting and finance background; but, because the department is such a diverse operation and with the various bureaus, a lot of what we have to do in my position is to help set the vision of where the department needs to go, help interpret the guidance that comes from OMB, to help combine what we have to do as a department with the vision that is established by the President and the administration.

To communicate that to the various bureaus, help address the issues, to listen to the concerns of our field operations and carry those issues back to the central policy organizations. And, I guess, one of the things that's probably very important is to be able to work in what I might refer to as a gray area.

The guidance that comes out is, sometimes, general in nature, and we have to help make it specific because the people that have to carry out those responsibilities need to know clearly exactly how we need to move forward. And, you need to be able to deal with the change that's occurring today in a variety of areas that we're dealing with, not the least of which is financial reporting, but also the security, technical areas that we get involved in to ensure there's some integrity to our operations.

MR. LAWRENCE: Well, tell us about your career. What drew you to financial management?

MR. LESHER: Well, let me give you a little � financial management, I've been in the area for a while; but I joined the Federal government in 1991 at the Office of Management and Budget. I'd been a partner with KPMG, and one of my very good clients was the first comptroller of the Federal government under the CFO Act. And, he recruited me to join his team at OMB to head up the financial systems branch.

And, my background at KPMG was with � I was in, both, the audit staff and the tax department but I spent most of my career in consulting and doing a lot of work in financial systems. Did a lot of work in coaching universities and other non-profits and the state and local governments. Had never worked in the Federal government.

But, I moved several years later, about 3 � years later, to the Department of Interior as the deputy chief financial officer, which gave me a broader portfolio beyond just the financial systems. But, it gave me the opportunity to get into the whole range of financial management issues in a department that has a lot of field operations.

MR. LAWRENCE: Well, it's time for a break. Stick with us through the break. When we come back, we'll ask Sky Lesher, of the Department of Interior to tell us about the CFO council. If you ever wondered what it does, you'll know when the Business of Government Hour continues.

(Intermission)

MR. LAWRENCE: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with Sky Lesher, Deputy Chief Financial Officer and Director of the Office of Financial Management in the U. S. Department of Interior.

Joining us in our conversation is Debra Cammer another PWC partner.

MS. CAMMER: Sky, when we left off, you were talking about your career. Could you talk about the couple of positions that really got you to where you were and gave you some of those key experiences?

MR. LESHER: Sure. In terms of the background coming into the Federal government, my experience at one of the major accounting firms and, in their consulting department, gave me a broad background which was very helpful when I came in to work on specific issues within the Federal government environment.

One of the things that, of course, you have to do as a consulting partner, or anybody in the consulting department, is you have to work with people at many different levels, both senior executives, but also people down in the trenches. And, when I came into OMB, one of the things that is very interesting about OMB is that it carries a great deal of weight because of its position. But, you aren't staffed.

So, then, I came in with the responsibility to deal with financial management systems, and I had five or six people to deal with that within the Federal government. And, so, you needed to know enough about what the problems were but also how to make it happen when you didn't have the staff.

So, one of the things we did is help set the agenda, but also work with teams throughout the Federal government in the various departments. And I think the fact that in consulting I had worked in putting together teams made it much easier. This was not something that I was not familiar with.

I will, also, say that the work ethic within the OMB environment was certainly, similar to what I experienced in the private sector. They worked just as hard, or in some cases, longer hours than even in the private sector as we went through, you know, certain budget periods.

So, that was comfortable. Now, I was very comfortable in that kind of environment. Moving over, of course, to Interior with 3-� years experience in OMB to have understood how the Federal government works made it much easier for me to address the issues there.

MS. CAMMER: President Bush just recently honored you with a Distinguished Executive Service Award. Could you talk about that, as well as the AGA Certificate of Excellence?

MR. LESHER: I'd be happy to. I was very pleased and honored to have been selected as one of the, I believe there were about 65, individuals that were honored with the Distinguished Executive Award. I would say that, you know, and that's certainly not just my doing, it's a lot of people working on issues in the department. And I was very honored to have been selected.

I will say that, in terms of, sort of awards, that I feel very good about, the AGA, Association of Government Accountants, has an award for a certificate of excellence in accountability reporting. And this is where they go through a process of reviewing our accountability reports, which are, essentially, the financial statements; and, then, combining in information related to performance reporting.

And, they have a very extensive review process that they go through. We've participated in this process for the last several years, and it is probably the best critique we have of our accountability report. So, we're very pleased to have, basically, received this award for our 2000 report and, basically, look forward to continue to work with the AGA in terms of that program, because we think it's a very strong program and it really helps us improve our reporting in our accountability report.

MR. LAWRENCE: Well, let me shift gears here for a minute. In addition to your work at the Department of Interior, we notice you also sit on the CFO Council. And, in this capacity, you were a member of a panel at an AGA professional development conference where you described the collaborations between the CIO, the CFO and the Procurement Executive Councils. Could you describe what the roles of these councils are and how they collaboratively work together to support sound administration and management within our government?

MR. LESHER: These councils, and I think they've had a variety of evolution, if you will, the CFO Council was established as a result of the CFO Act that was passed in 1990. And, it's gone through several iterations, if you will. It started with the CFOs. Not all of them, but a majority of the CFOs are political officials and the deputy CFOs are career.

It started with a CFO Council and a separate deputy CFO Council. In the early years of the Clinton administration, a number of CFOs then decided that they really needed to, basically, re-energize those organizations.

At the same time, OMB was downsizing in terms of the size of its operations and combined the management and budget functions closer together. And, they created what is now the CFO Council, which is both CFOs and deputy CFOs.

It is a vehicle by which we can speak directly to OMB. The deputy director for management is the chair, and there is a selected vice chair of the organization from one of the CFOs within one of the agencies. It's the CFO agencies.

Basically, we worked collectively on issues that face all of the various departments and working with OMB on those issues and trying to find solutions.

The CIO Council really had it's � the current version of it, if you will, is as a result of the Klinger-Colon Act or the Information Technology Management Reform Act in 1996. And, that particular Act, basically, brought more focus on the CIOs, established the CIO Council under an executive order. But, it combines some organizations that were previously in place to bring the information technology community together. So, that's its genesis.

And, there is another organization that has been recently formed, which is for the procurement executives. And, that particular Procurement Executives Council doesn't have the same kind of, sort of, legal framework behind it. But, it was found that these councils are a very effective way of coming together and working on issues. And, so, it was formed, and basically, now, the three organizations are working on a number of issues together because we all realize that we're not disconnected in terms of the need to address management issues.

And, so, we're working on a number of things that we can talk a little bit more about, perhaps, as we go on.

MS. CAMMER: Now, did the legislation for the CFO, after Clara Conn, create these councils?

MR. LESHER: Well, they created the umbrella for them. I think, technically, they created the positions for the CFOs and deputy CFOs. They also created the comptroller position at OMB, from the CFO Act, as well as the deputy director for management and required them to work together.

In the case of the CIO Council, I believe it may have been, actually, an executive order. But, the framework behind these things is that we've created, in legislation, the positions to basically deal with the financial management, which is CFO. And the CIO reported the information technology issues.

It's created the umbrella so that these organizations can base � these individuals can come together and create these councils to basically work those specific issues. There, also, is the President's Management Council, which is the COOs (Chief Operating Officers) that have been established, that basically will sit over these.

I think, everybody is now looking at, within the administration, I say everybody -- a large number of people are looking at the issue how to make these organizations work more effectively together. Not just on their individual issues, but on the linkage of those issues together.

MS. CAMMER: Can you talk some about the problems or issues that have been brought to the councils?

MR. LESHER: Well, I can speak to the CFO Council. And, one particular issue on the CIO Council that, I think, is important. But, let me take the CFO Council issues.

A large number of the issues that we've had to deal with in the last, say, four or five years, have revolved around financial statements. Keeping in mind that before 1990, there wasn't even a requirement for financial statements. Then, they had to figure out what authority, what accounting authority and what principles we are to apply because there's not another organization like the Federal government, except if you go into other governments. And they don't, necessarily, operate the same way.

And, so, they created an organization to, basically, deal with the standards. Then, we had to start to interpret them, and OMB had to play its role in establishing what we refer to as form and content, which is what needs to be put into the statements and what does the form of those statements look like.

And, then, we had to drive that down to actually, basically, implement those, and also to have them audited, which has been a major challenge, and we've had many issues that we've dealt with.

In the CIO community, one I think we've worked very closely with is the whole issue of security. And, so, we've worked in, collaboratively, on a number of issues related to security.

MR. LAWRENCE: Well that's a good stopping point. Come back with us after the break as we continue our conversation with Sky Lesher of the Department of Interior.

This is The Business of Government Hour.

(Intermission)

MR. LAWRENCE: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner of PricewaterhouseCoopers. And, today's conversation is with Sky Lesher, Deputy Chief Financial Officer and Director, Office of Financial Management, with the U. S. Department of Interior.

Joining us in our conversation is Debra Cammer, another PWC partner.

MS. CAMMER: Sky, can you talk about how the councils have been able to measure success?

MR. LESHER: That's a great question. And, I think we're probably somewhat early in the process in the sense that all the councils have strategic plans that have been formed within the last couple of years.

Trying to measure success on how to improve the interaction is going to be something that will be a challenge for us as we move forward. One of the things, I think, that is clear to us that much of what we're doing right now is very much process oriented. We put together teams. We have issues. We try to resolve those issues and work together on completing a plan or a program or a new policy. But, the real proof will be when we start to see the results on improved operations, improved efficiency, which of course, we've gotten over the last few years, partially because we've downsized the Federal government substantially. But, also, in more effective reporting and better understanding of the issues that we have to deal with.

MS. CAMMER: Has there been much teamwork in addressing these issues?

MR. LESHER: I'll answer that with a yes and a no. We have very definite acknowledgment between all of the communities that we need to work collaboratively. We have a number of issues that have been addressed in that particular form. I mentioned earlier the security issue. And, in that particular case, the CFO and CIO communities have come together to try to work in certain parts of that.

One of those had to do with our conference that we put together several � well, actually, about a year and a half ago where the CIO Council and the CFO Council, basically, tried to address what are some of the security issues that we had to face collectively in moving into the electronic government arena.

And they, basically, came down to, a couple of them, certainly, the whole change that's required to bring that into the government was one of them. How do you make those kinds of changes? The legal framework that's there. Some of the security issues, and really one very important point that did come up in those discussions was that the public expects to have access to information readily available.

But, at the same time, if it's in the government, that the security requirements of those may actually be higher than what you'd have in the private sector, because if we release, accidentally, information that is held by the government, you may have a greater impact on the public and, certainly, the public views that we should have a very high level of responsibility in security over data that is provided to the government.

So, there are a number of issues that we had to deal with, or have to deal with. And it's a CIO community issue, but it's also a CFO community issue. And, in a lot of ways, it is serving everybody's issue relating to the programs and what information we have.

As we start to move into some of the other areas, for example, procurement and some of the systems as how we link up the financial management and the procurement communities, we are working under JFMIP, which is the Joint Financial Management Improvement Program, which is the organization that basically publishes the requirements for financial systems. And, they put together teams.

One of those teams is dealing with the, under the combination of the CFO and the Procurement Executives Council, a team that deal with the relationship and how the data needs to move between the procurement systems and financial system.

So, we have examples where we're starting to work together. I will say that, probably, the future is going to be driven off the President's management agenda.

MR. LAWRENCE: How so?

MR. LESHER: Well, the President has established a management improvement agenda. It's a President's management agenda. And it establishes five government-wide initiatives. And, then, a series of nine program related, which are basically specific to individual agencies.

And, the government-wide initiatives include the strategic management of the human capital issue. We've had a lot of discussion about the fact that there is going to be a big bubble in terms of retirements of key executives in the Federal government. So, how do you handle that issue?

Competitive sourcing, which is how we work more effectively with the private sector and in terms of using private sector capabilities. Improving financial performance. As a coupled element to it, one has to do with erroneous payments. And those are really the large benefit and systems programs.

But, also, the financial reporting and getting accurate information from management, as well as external reporting. And that sits in there.

Another initiative having to do with the expanding electronic, the electronic government, the e-gov kind of focus, and there's a number of initiatives within that that are moving forward, which is basically to be more collaborative on how we deal with electronic government across agencies.

And, then, one of the great challenges, which is how to bring budget and performance integration, which will be a phasing-in period. But, those have set this government-wide initiative. And, certainly, and the one that's probably leading the collaborative sense is the e-government initiative.

We had, actually, subcommittees under the CIO Council, the CFO Council and the Procurement Executives Council for electronic government. Each of us had our own. And, then, we had liaison people cutting back and forth, which is � it was a good attempt at trying to improve the interaction. But, with this expanding e-government kind of focus, now, I think that where we will evolve is those working groups will become single working groups sponsored by the three committees.

This will be a new working model that we'll establish here as we start to, basically, implement the management agenda that's been established by the President.

MS. CAMMER: How will you measure success of implementation of the management agenda? How will you know when you've done it?

MR. LESHER: Well, that's a really good question. OMB is developing a scorecard to help focus on that. That process is now in its drafting stages. The director of OMB has taken a very active role in pushing this scorecard forward. We suspect it'll have a lot of visibility in the President's Management Council. Right?

And, the criteria for how you get graded in that score card will drive, I think, a lot of the focus on how you move. And, it has a � at least right now, it has a red, yellow, green kind of focus to it. So, people are not going to want to be sitting in the red, and would like to get to the green and work with the criteria. And they're working on that criteria right now. I suspect that we will see that criteria defined here in the next month, month and a half.

MS. CAMMER: We know that you've just done a bunch of restructuring within your office. Can you talk some about that?

MR. LESHER: Sure. Anytime you have a change in administrations, you have a new focus in terms of how you manage. But, I think that the big change that's occurring right now is the way the management agenda is, basically, developing around the President's management agenda.

And, so, in those areas that we're talking about in terms of the whole human capital and how you deal with developing people, hiring people, getting them through the proper flow, that's an important area. So, we're developing, within Interior, teams basically that will be focusing on these individual areas.

Not that we didn't have teams that dealt with human resources. But, now, we're focusing on it in such a way, as it's more in the investment arena investing in the human capital.

Competitive sourcing is a major focus. And, so, you know, how we go about doing that. There are things that are � there are procedures that have been in place for a while, something called A-76, which has a lot of special rules. But, if you want to move quickly in this area, it needs to have some adjustment to the focus, if you will. So, we're working on that issue as it relates to Interior.

And, we actually use a lot of private sector organizations to deliver a lot of our services right now.

The financial performance arena, although, Interior doesn't have any of these big benefit programs, that certainly is something we're concerned about. So, we're focusing on erroneous payments. We're focusing on the financial statements. How to improve that. Improve the timeliness of those. Improving the quality of the data coming back so it's more readily available to the managers. And, electronic government, of course. And, there's another group that's putting � being pulled together to focus on that.

Then, the budget performance, where we work, it's really budget finance and performance. All right, that's the financial statements. The budget, which is the formulation of the budget request, and then, of course, the performance, which are the results.

And there are a number of issues that will have to be addressed as we start to link the budget with what's actually being delivered in terms of results.

MR. LAWRENCE: Well, that's a good stopping point. Rejoin us after the break as we continue our conversation with Sky Lesher of the Department of Interior.

This is The Business of Government Hour.

(Intermission)

MR. LAWRENCE: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with Sky Lesher, Deputy Chief Financial Officer and Director, Office of Financial Management at the U. S. Department of Interior.

Well, Sky, in our last segment you were finishing by talking about the department. What do you think are the greatest management challenges there?

MR. LESHER: Well, I think there are a couple of them. I mentioned some, but let me expand on them just a bit.

This issue about human capital. For example, if we look at our financial operations, and we've done that and monitored this, we have a very experienced financial management work force, which is to say that many of them are in their late 40s, early 50s. Some of them over 60 could, basically, come in tomorrow and say, okay, I qualify to retire and out goes 30 years worth of knowledge.

We have not backed that knowledge up the way we should. We have a lot of it in policies, but how to use those policies, I think, is going to be one of the challenges. And, we don't, generally, staff ourselves with that extra 10 percent of the staffing to allow us to train the people behind them. We tend to, basically, staff ourselves at the bare minimum. And that's going to be an issue we're going to have to deal with.

It takes a long time to replace positions. And that means that, not only do you not have the person there to train them, but you have a period of 4 to 5 months that nobody, or at least, a temporary person that's covering that position.

The issue of computer security. Certainly, within the whole difficult time that we're in right now, we've been talking a lot about physical security. But, the computer security issue exists, and we need to invest dollars into that arena. And, we probably � in fact, I know that, at least the people that I've talked to, we probably are not vesting the kind of resources we need to devote to computer security.

And, I will say that many of our systems are old, and once you get through the firewalls, you know, that can be a concern. I think we have taken a lot of steps to protect that, and I would say that we work very closely with the CIO community to do that.

The issue about just investing in our infrastructure, the security, but the technology infrastructure, the application systems, many of which are very old. We have a number of systems, very high percentage of systems that are planned to be replaced over the next 5 or 6 years. And, that we're going to need to invest very heavily in that whole area of systems within the Federal government.

MS. CAMMER: We know that there are many Federal government agencies that anticipate a need to modernize their financial systems. Could you talk about some of the critical success factors?

MR. LESHER: Yes. One of my responsibilities is as the chair of the Financial Systems Committee of the CFO Council. And, the Financial Systems Committee has tried very hard over the past 5 or 6 years to, basically, try to address some of these issues.

There are a couple of things that are really important. One, is we certainly need to have a clear understanding of what our requirements are. And we've used the JFIP to put together teams to help to find those requirements. It's not a complete set of requirements at this point.

We have the framework. We've, certainly, worked on something referred to as the core financial systems. And that is that we actually test the software's part of a regular program. We have other requirements that are for other parts of that system, or the SWEDA systems that are needed for financial management that have requirements but do not go through the testing process. And we have some of those requirements that we're still, basically, developing.

Those will be important. And JFIP is critical, and it's done a great job on what they can in terms of dealing with that.

But, there are some other areas that are going to be very important. One is to really look at our overall processes within the government. We've tried that in the arena of travel, but we need to do it in a lot of other areas to streamline and basically set those processes so that they can be automated in a more streamlined fashion.

We need to build off the private sector models. But, then, it has to be adjusted where necessary because the Federal government, through legislation, acts of Congress, a whole variety of things have set up certain rules that we have to comply with.

We need to deal with the standards issue so that we have more consistency. We do that in financial reporting with something called standard general ledger, which is a code that we established for reporting for financial management reporting financial information for financial statements and reporting to Treasury and OMB. But, there are other areas where we need to have standardization. And without that you can't develop the interfaces between the various systems.

We need to, basically, do a better job in ensuring that software that's coming from the vendors that are supporting us meets our requirements and that they understand the environment that we have within the Federal government, because there is a tremendous need for understanding and education and training. And the implementation costs are often much more significant in the area of the training, the process changing, the change management than it is actually in the software itself.

And, then, I would say that the whole area of leadership, which is senior management, needs to understand the importance of these systems. They need to be able to recognize that they need investments, and they need to support them and keep in mind that tenure of political officials is, give or take, 18 months.

And, so, there's a need to find some way of having the continuity for a project, which these projects need to have to be able to implement it, pieces of them over 6 months to a year. But, they're part of a program that, generally, goes over many more years than the political officials' life within the Federal government. So, we need to find ways of being able to carry these projects through their completion.

MS. CAMMER: Could you talk about what you see as the advantages and impediments to IT outsourcing of financial systems management?

MR. LESHER: I think that there are a couple of things that are important with regard to outsourcing. One is that we are doing that. We've been doing it for a number of years. We started by just outsourcing development of code. Right? Because we didn't � we would buy the programmers. Then, we would buy custom developed code for the Federal government. And, then, we'd try to share that.

Then, we'd move to buying commercial packages with the notion that they were really � well, we ought to be able to just implement them. Then, we'd find that they really didn't meet the requirements of the Federal government. So, we would customize them. So, then, we'd have problems maintaining them.

Then, we would try to basically, you know, implement shrink-wrapped. You know, just bring it in, just put it in there, and that'll solve our problems. But, that didn't really address the fact that you have to have people to be able to use it. So, you have all this training associated with it.

So, I think we're working on that whole issue. The issue about, you know, how far and how much you out source. Again, in the financial arena, the government cannot out source the responsibility to have good, accurate financial records. They can out source the development of the systems, they can out source a good piece of some parts of the implementation process. But, the responsibility remains in the Federal government.

That means that you can't out source the overall project management. And, I'd say that you can hire project managers, but you still have to have project managers inside the government to oversee these projects so they don't, basically, overrun costs, don't deliver the value that they need to deliver to deal with the program issue, deliver information to the program manager.

So, in that sense, probably, one of the real tricks will be to get the right balance between the private sector and taking advantage of what they can offer and the fact that we cannot, in the Federal government, give up the responsibility because it is basically the government's responsibility to make sure they have accurate information for decision making and reporting to the public.

So, that will be the balance that we will have to address as we move forward, is getting the right balance so that we, basically, can deliver the max amount for the limited resources that are available to us.

MR. LAWRENCE: Throughout our conversation, you've talked about the different changes that are taking place. What advice would you give to, say, perhaps, a young person interested in a career as a CFO or CIO or even a procurement executive?

MR. LESHER: Well, first, I would say that, having worked both in the private sector and the public sector, the public sector really does provide a tremendous opportunity for people to work and develop. I will say that the people I've worked with in the Federal government are as bright a group of people as I've found anywhere in my career.

I would say that sometimes they don't, necessarily, get the credit that they're due because it's pretty easy to, basically, or perhaps, attack a small isolated situation where somebody may be abusing their situation and applying it to the rest of the government. In fact, I think that's not what I found.

I think the challenges are tremendous. If people look at the size of our operations, they're big. We are as big as some of the Fortune 500. And you have lots of opportunities to grow, and the satisfactions are enormous. And, I will say the opportunities are going to be great because there are going to be a lot of people retiring in the very near future. And, so, your chances of success and advancement are great.

MR. LAWRENCE: Well, Sky, I'm afraid we're out of time. Debra and I want to thank you for joining us this morning.

MR. LESHER: Thank you.

MS. CAMMER: Thank you.

MR. LAWRENCE: This has been The Business of Government Hour, featuring a conversation with Sky Lesher, Deputy Chief Financial Officer and Director of the Office of Financial Management, in the U. S. Department of Interior.

Be sure and visit us on the web at endowment@pwcglobal.com. There you can learn more about our programs. You can get a transcript of today's interesting conversation. Again, that's endowment@pwcglobal.com. This is Paul Lawrence.

Schuyler Lesher interview
10/27/2001
Schuyler Lesher

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