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Posted by on Jan 26, 2022

The Essential Role of Data in Federal Financial Management

The Essential Role of Data in Federal Financial Management

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Financial management in the federal government requires effective data. Tasked with ensuring the financial health of the government and appropriate spending, financial managers must understand complex federal budget processes. Although some aspects of federal financial management function like a business, others are unique to federal budget processes, such as appropriations. To juggle the distinct needs of federal finance operations, financial managers must understand and employ innovative data practices. The Department of the Treasury has established a vision for financial management, including a need to “build and deploy enterprise data solutions that improve our performance, reduce costs, and deliver what the financial management community needs to advance data-driven decision making by 2025.”

The Need for Chief Data Officers

Since the passage of the Evidence-Based Policymaking Act of 2018, Chief Data Officers (CDOs) have played increasingly critical roles in ensuring effective federal data management. Tasked with modernizing and enhancing the use of data in their respective agencies, CDOs must be creative and adaptable in analyzing their agency’s data needs, turning strategy into action, and ensuring policies and practices are continuously updated to use data to best serve the American public. For many agencies, the COVID-19 pandemic exacerbated the need to rapidly reform data collection and usage to meet the need for real-time critical data, including extensive emergency spending measures.

The work of CDOs includes reforming financial data, and financial managers should familiarize themselves with data best practices and emerging guidelines as CDOs work toward an increasingly data-driven government.

Tips for Data-Driven Financial Management

  • Form Partnerships: Eileen Vidrine, CDO for the Air Force, has highlighted the importance of collaboration in effective data management. “I like to say data is a team sport, and we can’t do this without our partners out in the field.” Financial managers can succeed by partnering with their CDOs and working within and across agencies.
  • Use Existing Resources: Although innovation is key to data management, there may not be a need to reinvent the wheel. The 2020 Federal Data Strategy Action Plan echoed the need for partnership and encouraged managers to verify whether data already exists within their organization and work with other agencies to determine if they are already collecting the data they need. Data may also be available through nonfederal organizations. Although this data may be unattainable, checking with other entities can help determine a repeatable data-acquisition process that does not require the direct use of outside data.
  • Value Transparency: Transparent data bolsters partnerships and identification of new and existing resources and builds public confidence in agency spending. The Federal Data Strategy and Data.gov tackle creating transparent, actionable data while balancing the need for security, privacy, and confidentiality.
  • Close Skills Gaps: A key principle of the Federal Data Strategy Action Plan and action plans released in recent years across the federal government is identifying and addressing skills gaps, particularly STEM skills such as data management and analysis. Without the ability to critically analyze and act on complex data, financial managers and staff cannot carry out mission-critical tasks to the best of their ability and may make costly mistakes.

Financial managers can use these strategies as a foundation to create innovative, modern solutions that enable a data-driven federal financial culture.

Our Mission is Your People

Management Concepts strives to provide federal financial managers with the most up-to-date information available for optimal performance, career progression, and mission success. We offer training programs for both federal financial management and data analytics, so provide everything you need to manage & use your financial data effectively. Please stop by our booth at an upcoming event or browse our other courses to discover learning opportunities designed for you.

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