CGFM
CGFM Program Celebrates 10 Years of Success
When Jeffrey C. Steinhoff began planning for his 1993-1994 term as AGA National President, a new certification program was not on his priority list. Steinhoff, who is managing director of the Financial Management and Assurance Team at the Government Accountability Office, testified quite often before congressional committees at that time. One particular hearing stands out. "During the hearing, Senator James Sasser, the chairman, really asked a lot about my professional credentials and made a pretty big deal about me being a CPA, and that added a sense of greater reliability, and greater reliance on whatever I was saying," Steinhoff recalled. "I really didn't think those skills and that exam I passed quite some time before that was all that applicable to the issues I was discussing at the hearing."
Chairman Sasser had unknowingly planted a seed that would bloom into AGA's CGFM Program, which is celebrating its 10th anniversary this year. Steinhoff saw a strong need to recognize the "very rich portfolio of knowledge and skills" that are unique to government financial managers, who are dealing with complex issues that are quite different than those of the private sector.
Steinhoff looked at the many previous discussions and studies AGA had spearheaded on the subject. In 1992, a task force recommended dropping the idea, but he found the sentiment to be split nearly 50-50, so he began planning to introduce the concept to the National Executive Committee and AGA's chapters. Before he even started, though, he was warned by his colleagues at GAO that he already had a strong plan in place for his presidential term. They said he didn't need to take the risk of launching an initiative that was destined to be rejected by the membership. "I felt strongly that we were viewed as second-class citizens by some in the profession. We have special and unique skills and we shouldn't be second to anyone," Steinhoff said. "There was really nothing that recognized government financial managers out there at all."
Steinhoff generated interest in the concept and received a broad mandate from the membership to pursue it. He introduced the program at the 1994 Professional Development Conference. He hoped 4,000 would apply for CGFM status during the initial certification period, when the CGFM was granted based on education and experience. "There were those who said I'd have trouble getting 500," he said. Then began the deluge of mailbags to the AGA National Office. More than 13,000 became certified. Also, AGA's membership shot up by 7,000 over a few short years, and attendance at the annual PDC skyrocketed. The CGFM is considered AGA's most successful undertaking.
AGA's Professional Certification Board, which oversees the CGFM Program, developed a training program of three courses that help prepare CGFM candidates for the three examinations. The exams were computerized from the start, and the board has gone through the rigorous process of updating them to keep the material fresh and relevant to the issues financial managers face every day. Board members, who are experts in state and local government, federal accounting standards, the Yellow Book and more, have dedicated hundreds of hours of volunteer time to the CGFM Program. Many board members who serve today, including Steinhoff, helped develop the program 10 years ago.
Steinhoff is heartened by the growing list of governments that recognize the CGFM, but he also recognizes that establishing a new credential takes many years of effort at the grassroots level. The CGFM will become a more sought-after credential over time, as Steinhoff sees a future of continuing growth. "The CGFM is a mark of achievement, an indicator of excellence in our chosen field and it will only grow in value," Steinhoff said.
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CGFM DESIGNATION - IT'S NOT JUST FOR ACCOUNTANTS
Government financial management is broad in scope. Consider the diversity of AGA's membership: while many are accountants and auditors, AGA members are also budget analysts, program analysts, internal auditors and other financial management professionals. The common goal of our membership is interest in government financial management and advancing government accountability.
The Certified Government Financial Manager (CGFM) Program reflects the diverse range of knowledge required of government financial managers. Look at the content specifications of CGFM Examinations [http://www.agacgfm.org/cgfm/exams/]. A CGFM needs to have knowledge about how the government works, how governments are financed, ethical considerations, management techniques, financial analysis, internal controls, budgeting, cost accounting, cash management, investment management, procurement, inventory systems, credit management and financial management systems.
One of the strengths of the CGFM certification is the combination of the detailed knowledge of governmental accounting coupled with a general understanding of other government financial management practices, such as budgetary accounting and cost accounting. A CGFM has to know about the requirements at all levels - federal, state and local. Much of the knowledge required by a CGFM involves theory - why things are done the way they are done. Only a small portion is devoted to practice - the actual entries that are needed for specific transactions.
The CGFM designation demonstrates a person's knowledge, skills and abilities about government in general. If you are in any type of position in government financial management, the CGFM should be at the top of your list as a preferred certification.
On occasion, we are asked how the CGFM compares to the CPA. In a sense, there is no comparison. The CPA is more than a certification - it can also lead to obtaining a license. If your goal is to practice public accounting - the review and audit of financial statements in order to render an opinion - then you must have a license from a state board of accountancy. To get a license, you have to pass the CPA examinations. That is why the CPA is unique among certification programs.
The CGFM designation, coupled with a CPA, can be a powerful tool in your arsenal. Not only do you possess the knowledge, skills and abilities to practice public accounting, you also have knowledge, skills and abilities about the unique aspects of government.
If you are in a profession that does not require a CPA, then you need to consider obtaining a certification that sets you apart from your peers. If you are in government, as a budget analyst, program analyst, grant manager, or in any other financial management position, then the CGFM should be your first choice for a certification program.
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STUDYING FOR CGFM EXAMINATION 1
The first examination (although the exams can be taken in any order) covers the "Governmental Environment." A CGFM certificate holder should have an in-depth knowledge of the structure and workings of government. This exam focuses on seven areas:
A. Organization and Structure of Government
B. Legal and Other Environmental Aspects of Government
C. Interrelationships Among Planning, Programming, Budgeting, Operations, Accounting, Reporting and Auditing
D. Governmental Financing Process
E. Public Accountability
F. Ethics in Government
G. Financial Management Responsibilities and Skills
The subjects covered in each of these sections can be found at the AGA website (www.agacgfm.org) on the CGFM tab under "What Do Exams Cover?", Examination 1.
The first two sections of examination 1 address basic civics information often covered in political science or public administration courses. Those subjects were typically studied sometime ago by most of us and focused on concepts. However, those concepts are reality for someone working in or with government. Studying for this examination should include some reflection on how the concepts behind the structure and operation of government affect actions in the workplace. For example, the responsibility to provide education was not delegated to the Federal government in the U. S Constitution; it was reserved to the states. How does this affect the ways the federal government can influence the actions of education programs in the individual states? How does the state's control of its political subdivisions affect a local school district's funding? Most college-level public administration books have information on government structure and the concept of governmental sovereignty.
The management cycle, while also present in the corporate world, can be applied uniquely in governments. Books used for college level management courses can be referred to obtain both a theoretical foundation and practical applications on the processes and interrelationships in the management cycle. Simply using a search engine such as Google and searching on "plan, program, budget, operate, account, report, audit, cycle" will bring up numerous sites where strategic planning documents support the practical usefulness of the cycle and where audit reports document problems that occur when the cycle breaks down.
Governmental Financing Process addresses various ways governments raise revenues: taxes, grants, shared revenues, user fees, debt, etc. The unique revenue sources of special-purpose governments are also addressed in this section. The Government Finance Officers Association has several books that discuss these issues:
· Local Government Finance Concepts and Practices by John E. Peterson and Dennis R. Stachora, eds.
· Tax-exempt Financing: A Primer
· An Elected Officials' Guide to Debt Issuance by J.B. Kurish and Patricia Tigue
· A Guide for Preparing a Debt Policy
Public administration course books will also have information on other types of financing and often discuss pros and cons of using certain types of financing options.
Many of the topics in the Public Accountability and Government Ethics sections are likewise covered in public administration books. The AGA Code of Ethics is a "must study" for the section of the test (http://www.agacgfm.org/about/codeofethics.aspx). Practical ethics application discussions are also encouraged for CGFM candidates. Government employees really do have a private life and the same rights as other citizens. So, what happens if our family owns land next to a proposed government annexation/ purchase that may increase or decrease the value of the land and my government position makes me a part of the decision-making process? What ethical actions are available for me?
The final section deals with management responsibilities and skills. Test preparation should include reviewing the responsibilities and duties of the federal CFOs as set forth in the CFO Act of 1990. The heads of other government financial groups have similar responsibilities. Management Policies in Local Government Finance, GFOA, and Management Control in Nonprofit Organizations by Robert Anthony and David Young, can provide some insight.
The Governmental Accounting Standards Board's Concept Statement 1 (Objectives of Financial Reporting and Statement 2 (Service Efforts and Accomplishments Reporting) should be studied, as should the Federal Accounting Standards Advisory Board's SSFAC 1 (Statements of Federal Financial Reporting). Other resources for Examination 1 study can be found on the AGA website. Many of these books are costly at list prices. Local AGA chapters may want to facilitate studying for the exams by purchasing some of these publications. Some books can also be purchased from the used book section of www.amazon.com, www.half.com or used textbook sites. Several of the books should be available at the libraries of colleges or universities with departments of public administration.
AGA offers a comprehensive online course that allows individuals to take the Governmental Environment training when convenient. The cost is $195; 8 CPE credits are available for the course. Information about the course is available at www.agacgfm.org/cgfm/prepare.
Management Concepts, Inc. provides instructor-led courses on topics covered by the CGFM exam. The Government Environment is Course 5601. Information for this course can also be found on www.agacgfm.org/cgfm/prepare.
Finally, a self-study guide is being prepared for the Governmental Environment exam and is scheduled to be available later this year.
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CGFM CPE requirements
Have you renewed your CGFM and/or AGA membership this year? The annual invoices went out in February and are due by March 31, 2005. If you have not submitted your payment, please be sure to mail a check, fax your credit card information or pay online (www.agacgfm.org) as soon as possible.
If you are a CGFM holder, paying the renewal fee is not the only requirement of keeping your designation active. In fact, you cannot renew the CGFM unless you are complaint with the CGFM Continuing Professional Education (CPE) requirement of earning at least 80 CPE hours in your last two-year CPE cycle, with at least 20 hours in each year.
Your two-year CGFM CPE cycle depends on the year your CGFM was awarded: if you have earned your CGFM in 1996, 1998, 2000 or 2002, your last two-year CPE cycle just ended on December 31, 2004. If you do not have 80 CPEs in 2003-2004, you can catch up during the grace period of January 1-March 31, 2005. Any hours completed towards a deficiency in one CPE cycle may not be counted towards the next cycle.
If you have earned your CGFM in 1994, 1995, 1997, 1999, 2001 or 2003, your current CPE cycle is 2004-2005 and you should have earned a minimum of 20 CPE hours in 2004 and will need to complete 80 CPE hours by the end of this year.
Individuals who have not met the CPE requirement need to contact AGA's CGFM office at 1.800.AGA.7211 ext. 313.
Not all CPEs can count towards the CGFM designation. The hours earned must be in government financial management topics or related technical subjects applicable to government financial management areas. CPEs must contribute to the CGFM's professional proficiency in government financial management, and you need to maintain documentation of the CPE completed (for at least three years). This documentation may be requested by AGA if you are selected to be audited; however, CGFM holders should not automatically send information on their CPE hours to AGA at the time of renewal.
For more information on CGFM CPE requirements, please visit AGA website at http://www.agacgf.org/cgfm/maintain/cpe_requirements.aspx.
Promoting the CGFM through College Websites/Catalogs
The New York Capital Chapter is contacting colleges in New York State that offer Bachelor and Masters degrees in Accounting. We hope that colleges will help us promote the CGFM. Generally, colleges’ accounting websites note that graduates are eligible to sit for the CPA exam, but fail to mention other professional designations can also be pursued. Our chapter contacts the college, briefly explains the nature of the CGFM, and asks the college to consider adding reference to the CGFM in their course catalog and website.
To date, two colleges have already expressed an interest in promoting the CGFM. Of course, the college catalog has already been published for the 2003-2004 school year, but they plan to make change for the next version. Website changes can be made more timely. These colleges were happy to have another option (besides CPA) to tell their students about.
Suggested steps:
1) Obtain a list of colleges in your state that offer Bachelor degrees (or higher) in Accounting. (My agency’s training coordinator was able to provide me with a comprehensive list.)
2) Visit the college’s website. Generally I found that the college’s Accounting or Business Department website will state that graduates are eligible to sit for the CPA exam, but do not mention the CGFM. Note the Accounting or Business Department’s Chair’s name and contact information.
3) Contact the college’s Accounting or Business Department’s Chair. Provide a brief explanation of the CGFM and encourage them to mention the CGFM in their college catalog and/or website.
Sample Voice Mail Message: My name is ____________. I am a member of the New York Capital Chapter of the Association of Government Accountants (AGA) who sponsors the professional designation exam of Certified Government Financial Manager (CGFM).
I noticed that your website informs students that upon graduation they are eligible to sit for the CPA [see the note below]. Your students are also eligible to sit for the CGFM. I hoped you might be able to add that to your website and/or course catalog, or perhaps be able to assist me informing your students about the CGFM.
I'd be happy to provide you with exam brochures for your review or distribution to your students. Please contact me at 518 _______ to discuss this further. I appreciate your assistance.
4) Often the college administrator is interested in receiving a CGFM brochure and learning more about the program. I use this form letter to provide CGFM brochures to the college administrator.
It was a pleasure to speak to you today regarding the Association of Government Accountants (AGA) professional certification of Certified Government Financial Manager (CGFM). I have enclosed a brochure for your review. I hope that the CGFM can be mentioned in the _____ College course catalog, as students who obtain an accounting degree are eligible to sit for the CGFM examinations.
Additional information about the CGFM program can be obtained at our National website – www.agacgfm.org – and our chapter’s website – www.aganycap.org.
I have also enclosed some extra copies of the brochure in case there may be a suitable place on campus to post or distribute these to students.
If you have additional questions, please contact me at (518) ______ or (email address) . I appreciate your consideration of including the CGFM in _____ College’s course catalog and website.
Sincerely,
5) If you have not heard back from the college administrator in about one month, follow-up with an email or phone conversation.
I hope you received the Certified Government Financial Manager (CGFM) brochures I sent you a few weeks ago.
If you revise the _____ College course catalog to include mention of the CGFM, could you please let me know that in writing?
I would like to forward this to our local chapter board and our national coordinators to share the good news.
Again, I appreciate your consideration of including the CGFM designation in the course catalog.
Note from AGA National: in those states that have the 150-hr requirement to sit for the CPA exam, the students can’t sit for the CPA upon graduation, but they can sit for the CGFM.
To take the CGFM Examinations, candidates need a bachelor’s degree from an accredited college or university and completion of at least 24 credit hours of study composed of courses in: accounting, auditing, budgeting, economics, electronic data processing, finance, information resource management, public administration and other financial management topics.
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