Certified Government Financial Manager
Encyclopedia
A Certified Government Financial Manager (CGFM) is a professional certification issued by the Association of Government Accountants
(AGA). 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.
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.
(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 Government 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." 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.
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).
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 Requirement
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.
Examination 1—The Governmental Environment
(10%) Organization and Structure of Government
- Levels of Government, Branches of Government, Authorities and Responsibilities of Government, Special-Purpose Governments/Quasi-Governmental Entities.
(15%) Legal and Other Environmental Aspects of Government - Implications of Sovereignty
, Central Role of the Budget
Process, Other Legal Aspects.
(10%) 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.
(25%) 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.
(10%) 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.
(20%) 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.
(10%) 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.
Examination 2—Governmental Accounting, Financial Reporting and Budgeting
(60%) General Knowledge Section
Influences, Objectives, and 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 - Cost accounting, Performance reporting
Budgeting - Budgeting approaches, the budget process,
(40%) 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 and Financial Reporting - Budgetary and Proprietary Accounting, Recording and reporting specific transactions, Measurement, recognition criteria and disclosures for specific transactions, events, and balances,
Examination 3—Governmental Financial Management and Control
(25%) 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.
(15%) Performance Measurement and Reporting
Objectives and Uses of Performance Measurement
and Reporting, Elements, Characteristics and Other Aspects.
(5%) Financial and Managerial Analysis
Techniques
Financial and Managerial Analysis Techniques - Types of analysis and applications of the analysis techniques.
(30%) Financial and Managerial Concepts and Controls and Techniques
Cash Management
, Investment Management
, Credit Management/Debt Collection, Procurement
Management, Inventory/Supply Management, Financial Management Systems,
Association of Government Accountants
The Association of Government Accountants was founded on September 14, 1950. AGA serves Federal, State and local government accounting professionals by providing education, encouraging professional development, providing Government Accounting certification, and supporting standards and research to...
(AGA). 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.
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
Bachelor's degree
A bachelor's degree is usually an academic degree awarded for an undergraduate course or major that generally lasts for three or four years, but can range anywhere from two to six years depending on the region of the world...
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 1990Chief Financial Officers Act of 1990
The Chief Financial Officer and Federal Financial Reform Act of 1990, or CFO Act, signed into law by President George H.W. Bush on November 15, 1990, is a United States federal law intended to improve the government's financial management, outlining standards of financial performance and disclosure...
(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
Chief financial officer
The chief financial officer or Chief financial and operating officer is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management...
(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 Government Accounting Standards Board (GASB
GASB
GASB may refer to:* Governmental Accounting Standards Board * Gallium antimonide...
) 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." 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
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
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
Orange County, California
Orange County is a county in the U.S. state of California. Its county seat is Santa Ana. As of the 2010 census, its population was 3,010,232, up from 2,846,293 at the 2000 census, making it the third most populous county in California, behind Los Angeles County and San Diego County...
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 RequirementA bachelor's degree
Bachelor's degree
A bachelor's degree is usually an academic degree awarded for an undergraduate course or major that generally lasts for three or four years, but can range anywhere from two to six years depending on the region of the world...
from an accredited college or university
University
A university is an institution of higher education and research, which grants academic degrees in a variety of subjects. A university is an organisation that provides both undergraduate education and postgraduate education...
, 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
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, Electronic Data Processing, Finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
, Information Resources Management, Public Administration
Public administration
Public Administration houses the implementation of government policy and an academic discipline that studies this implementation and that prepares civil servants for this work. As a "field of inquiry with a diverse scope" its "fundamental goal.....
, Other Financial Management or Related Topics.
Professional Experience Requirement
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.
Examination 1—The Governmental Environment
(10%) Organization and Structure of Government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
- Levels of Government, Branches of Government, Authorities and Responsibilities of Government, Special-Purpose Governments/Quasi-Governmental Entities.
(15%) Legal and Other Environmental Aspects of Government - Implications of Sovereignty
Sovereignty
Sovereignty is the quality of having supreme, independent authority over a geographic area, such as a territory. It can be found in a power to rule and make law that rests on a political fact for which no purely legal explanation can be provided...
, Central Role of the Budget
Budget
A budget is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods...
Process, Other Legal Aspects.
(10%) Interrelationships Among Planning
Planning
Planning in organizations and public policy is both the organizational process of creating and maintaining a plan; and the psychological process of thinking about the activities required to create a desired goal on some scale. As such, it is a fundamental property of intelligent behavior...
, Programming, Budgeting, Operations
Business operations
Business operations are those ongoing recurring activities involved in the running of a business for the purpose of producing value for the stakeholders...
, 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.
(25%) Governmental Financing – Taxation, Intergovernmental Grants and Shared Revenues, User fees, Licenses and Lotteries, Debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
, Financing of Governmental Colleges, Hospitals, Special Districts, Public Authorities, School Districts and Other Special-Purpose Governmental Entities.
(10%) 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.
(20%) Ethics
Ethics
Ethics, also known as moral philosophy, is a branch of philosophy that addresses questions about morality—that is, concepts such as good and evil, right and wrong, virtue and vice, justice and crime, etc.Major branches of ethics include:...
in Government - General Responsibilities as a Professional, Acting in the Public Interest
Public interest
The public interest refers to the "common well-being" or "general welfare." The public interest is central to policy debates, politics, democracy and the nature of government itself...
, Maintaining Professional Integrity, Applying Objectivity
Objectivity (science)
Objectivity in science is a value that informs how science is practiced and how scientific truths are created. It is the idea that scientists, in attempting to uncover truths about the natural world, must aspire to eliminate personal biases, a priori commitments, emotional involvement, etc...
and Independence
Independence
Independence is a condition of a nation, country, or state in which its residents and population, or some portion thereof, exercise self-government, and usually sovereignty, over its territory....
, 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.
(10%) Financial Management Responsibilities and Skills - Financial Management Responsibilities and Skills, Functions, Responsibilities of the Chief Financial Officer
Chief financial officer
The chief financial officer or Chief financial and operating officer is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management...
; Group Dynamics
Group dynamics
Group dynamics refers to a system of behaviors and psychological processes that occur within a social group , or between social groups...
Techniques; Conflict Resolution
Conflict resolution
Conflict resolution is conceptualized as the methods and processes involved in facilitating the peaceful ending of some social conflict. Often, committed group members attempt to resolve group conflicts by actively communicating information about their conflicting motives or ideologies to the rest...
Methods and Applications; Motivating and Developing Staff; Effective Communication
Communication
Communication is the activity of conveying meaningful information. Communication requires a sender, a message, and an intended recipient, although the receiver need not be present or aware of the sender's intent to communicate at the time of communication; thus communication can occur across vast...
; Organizing Information; Keeping Legislature
Legislature
A legislature is a kind of deliberative assembly with the power to pass, amend, and repeal laws. The law created by a legislature is called legislation or statutory law. In addition to enacting laws, legislatures usually have exclusive authority to raise or lower taxes and adopt the budget and...
and Management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
Informed and Interested.
Examination 2—Governmental Accounting, Financial Reporting and Budgeting
(60%) General Knowledge Section
Influences, Objectives, and Standards Setting - Influences and objectives, Standards setting.
General Principles of Governmental Financial Accounting - Accounting Basis, Fund accounting
Fund Accounting
Fund accounting is an accounting system emphasizing accountability rather than profitability, used by non-profit organizations and governments...
, Accounting for certain specific transactions and events,
Financial Reporting - General Financial Reporting, Reporting entity, Content of financial reports.
Cost Accounting
Cost accounting
Cost accounting information is designed for managers. Since managers are taking decisions only for their own organization, there is no need for the information to be comparable to similar information from other organizations...
and Performance Reporting - Cost accounting, Performance reporting
Budgeting - Budgeting approaches, the budget process,
(40%) 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 and Financial Reporting - Budgetary and Proprietary Accounting, Recording and reporting specific transactions, Measurement, recognition criteria and disclosures for specific transactions, events, and balances,
Examination 3—Governmental Financial Management and Control
(25%) Internal/Management Control
Internal Control
Internal control
In accounting and auditing, internal control is defined as a process effected by an organization's structure, work and authority flows, people and management information systems, designed to help the organization accomplish specific goals or objectives. It is a means by which an organization's...
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
Audit
The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.- Accounting...
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.
(15%) Performance Measurement and Reporting
Objectives and Uses of Performance Measurement
Performance Measurement
Performance measurement with a process is the complement to process execution. Based on measured performance, the feedback control loop may be closed. The metrics to assess performance is set according to a determined econometric model...
and Reporting, Elements, Characteristics and Other Aspects.
(5%) Financial and Managerial Analysis
Analysis
Analysis is the process of breaking a complex topic or substance into smaller parts to gain a better understanding of it. The technique has been applied in the study of mathematics and logic since before Aristotle , though analysis as a formal concept is a relatively recent development.The word is...
Techniques
Financial and Managerial Analysis Techniques - Types of analysis and applications of the analysis techniques.
(30%) Financial and Managerial Concepts and Controls and Techniques
Cash Management
Cash management
In United States banking, cash management, or treasury management, is a marketing term for certain services offered primarily to larger business customers...
, Investment Management
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
, Credit Management/Debt Collection, Procurement
Procurement
Procurement is the acquisition of goods or services. It is favourable that the goods/services are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location...
Management, Inventory/Supply Management, Financial Management Systems,
See also
- American Institute of Certified Public AccountantsAmerican Institute of Certified Public AccountantsFounded in 1887, the American Institute of Certified Public Accountants is the national professional organization of Certified Public Accountants in the United States, with more than 370,000 CPA members in 128 countries in business and industry, public practice, government, education, student...
Private Sector Accounting - Certified Public AccountantCertified Public AccountantCertified Public Accountant is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA...
- List of post-nominal letters
- Professional certificationProfessional certificationProfessional certification, trade certification, or professional designation, often called simply certification or qualification, is a designation earned by a person to assure qualification to perform a job or task...
External links
- AGA: CGFM
- Norwich University: Fiscal Management Concentration
- James L Cave, CPA's certification list
- Sacramento City College Certifications in Accounting, Finance and Business Plus Licensing and Educational Information
- CMA, CPA, MBA. What and Why. Part 1, Mazoo's Learning blog, tutorials and helpful tips to pass finance & accounting certification exams