Certified Government Financial Manager

A Certified Government Financial Manager (CGFM) is a professional certification issued by the Association of Government Accountants (AGA) in the United States. It was created in 1994 to provide a professional standard of financial expertise and ethics in government and a standard by which government financial management professionals are measured. Its education, experience and ethics requirements have served to elevate the most seasoned financial professionals. More than 14,000 individuals have received the designation.^[1]

The certification requires experience, education, and an examination. Candidates must have a minimum of two years' experience in government financial functions. Candidates must have a bachelor's degree and complete 24 credit hours of instruction. The examination consists of 3 two-hour tests which must be taken within 3 years of the instruction. A CGFM must complete Continuing Professional Education (CPE) credits to maintain certification.

The curriculum of the CGFM certification applies to federal, state, and local government. Since 2001, federal agencies have been allowed to use appropriated funds to acquire certifications for their employees. As of 2007, seven states have recognized the CGFM: Idaho, Mississippi, Missouri, Maine, Tennessee, Virginia and Washington. Various counties have also recognized the CGFM.

Need for excellence in government finance

The Chief Financial Officers Act of 1990 (CFO Act) was signed into law by President George H. W. Bush. For each of 23 federal agencies, the position of chief financial officer was created. Since that time, federal efforts have been intended to improve the government's financial management and develop standards of financial performance and disclosure. Similar financial expectations exist at state and local government levels.

The chief financial officer (CFO) of a public agency is the corporate officer primarily responsible for managing the financial risks of the business or agency. This officer is also responsible for budgeting, financial planning, record-keeping, cash flow management, higher management. communicating financial performance and forecasts to the community. The title may vary, such as finance director or treasurer, from agency to agency. The CFO typically reports to the city manager or other chief executive officer.

Financial reporting has multiple audiences, with a responsibility to citizens, taxpayers and voters to provide transparent accountability for use of public funds (taxes). Additionally, financial reporting must provide internal guidance to program managers to maintain budgetary control and to governing city councils and boards of directors to provide adequate financial policy guidelines.

The United States government in general has sought to improve the quality of financial reporting. The Governmental Accounting Standards Board (GASB) has a stated mission to "establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports." ^[2] Pronouncements in particular have trended to incorporate more comparable elements of business-sector.

The need for and value of financial managers has increased. Over the past decades, a number of factors have created a rapidly changing environment for today's government financial managers. Beginning with the New York City financial crisis in the 1970s and 1980s, state and local governments began overhauling their financial management systems. In 1990, the Chief Financial Officers (CFO) act called for reforms that brought the goal of accountability to the forefront. The 1994 Bankruptcy of Orange County, California, further underscored the need for ongoing excellence and expertise in the field of municipal finance.

Service provided by CGFMs

Those who may be qualified and have the skills to lead can subject themselves to peer credentialing. The Certified Government Financial Manager (CGFM) does this. A professional certification provides a degree of confidence that practitioners are adequately trained, educated and experienced to be prepared for financial challenges in the real world.

The CGFM is broad; it covers federal, state and local government financial management. It measures a wide range of knowledge and skills that a professional needs to succeed in the federal government financial environment, or to meet the unique challenges faced by state and local government financial managers.

The foundation of the CGFM are the requirements for education, experience, examination and commitment to excellence. This includes adherence to a Code of Ethics and required Continuing Professional Education (CPE).

CGFM requirements

Education

A bachelor's degree from an accredited college or university, and completion of at least 24 semester credit hours (or 36 quarter credit hours) of study composed of courses in one or more of the following areas: Accounting, Auditing, Budgeting, Economics, Electronic Data Processing, Finance, Information Resources Management, Public Administration, Other Financial Management or Related Topics.

Professional experience

A least two years of professional-level experience in government financial management. A candidate's experience must involve government financial management at a professional level in federal, state or local government and encompass one or more of the following areas: Financial systems design, implementation, or operation; Budget formation, execution or analysis; Accounting or auditing policy and procedure development, implementation or interpretation; Accounting or auditing standards-setting; Audit of financial operations, financial statements, internal controls, or compliance with laws and regulations; Audit or evaluation of program performance or operations; Audit of contract compliance or costs; Financial report design or preparation; Financial planning or analysis; Cost or program accounting systems or asset management systems development or operation; Information resources management or electronic data processing; Government financial management training course design or instruction; Investigation of financially related fraud or criminal activities; Other experience in government financial management that the Professional Certification Board deems acceptable.

Examinations

1. The Governmental Environment

Organization and Structure of Government: Levels of government, branches of government, authorities and responsibilities of government, special-purpose governments and quasi-governmental entities. (10%)

Legal and Other Environmental Aspects of Government: Implications of sovereignty, central role of the budget process, other legal aspects. (15%)

Interrelationships Among Planning, Programming, Budgeting, Operations, Accounting, Reporting and Auditing: The management cycle, interrelationship among the elements, elements of planning, role of economic assumptions types of reporting, use of performance measures. (10%)

Governmental Financing: Taxation, intergovernmental grants and shared revenues, user fees, licenses and lotteries, debt, financing of governmental colleges, hospitals, special districts, public authorities, school districts and other special-purpose governmental entities. (25%)

Public Accountability: Concepts, definitions, notions of accountability, those to whom the government is accountable, that for which accountability is demonstrated, how accountability is demonstrated and assessed. (10%)

Ethics in Government: General responsibilities as a professional, acting in the public interest, maintaining professional integrity, applying objectivity and independence, observing due care in the performance of duties, behaving to avoid improper use of one's office for personal gain, maintaining professional competencies and performance standards. (20%)

Financial Management Responsibilities and Skills: Financial management responsibilities and skills, functions, responsibilities of the Chief Financial Officer, group dynamics techniques; conflict resolution methods and applications, motivating and developing staff, effective communication, organizing information, keeping Legislature and management informed and interested. (10%)

2. Governmental Accounting, Financial Reporting and Budgeting

General Knowledge Section: Influences, objectives, standards setting, influences and objectives, standards setting, general principles of governmental financial accounting, accounting basis, fund accounting, accounting for certain specific transactions and events, financial reporting, general financial reporting, reporting entity, content of financial reports, cost accounting and performance reporting, budgeting approaches and processes. (60%)

Detailed Knowledge Section: State and local financial accounting and reporting, fund financial accounting, budgetary accounting, classification, recognition, measurement, and disclosures for specific transactions and events, financial reporting, federal accounting, financial reporting, budgetary and proprietary accounting, recording and reporting specific transactions, measurement, recognition criteria and disclosures for specific transactions, events, and balances. (40%)

3. Governmental Financial Management and Control

Internal/Management Control: Internal control objectives, considerations, applications, responsibilities, components of internal control, evaluation process, reporting process. (25%)

Auditing: Types and objectives, standards, responsibilities, phases, coordination and cooperation, contracting, audit follow-Up, users of audits and how they use the results; types of activities that are considered sensitive in a government audit, audit quality control. (25%)

Performance Measurement and Reporting: Objectives and uses of performance measurement and reporting, elements, characteristics and other aspects. (15%)

Financial and Managerial Analysis Techniques: Financial and managerial analysis techniques, types of analysis and applications of the analysis techniques. (5%)

Financial and Managerial Concepts and Controls and Techniques: Cash management, investment management, credit management and debt collection, procurement management, inventory and supply management, financial management systems. (30%)