Taking It to the Next Level: GFOA s Certification Program May 23, :40pm to 3:55pm CPE Credit 1.5

Transcription

1 Taking It to the Next Level: GFOA s Certification Program May 23, :40pm to 3:55pm CPE Credit 1.5 Vivian A. Calkins-McGettigan, Deputy County Administrator, York County, VA Bruce Chase, Professor, Radford University Steve Beach, Professor, Radford University Ann Shawver, Assistant Professor, Radford University Joan Jadali, Director of Finance. Webster Groves, MO

2 Session Agenda l Program Criteria and Goals l Contents of 5 Exams l How to Prepare for the Exams

3 Program Criteria and Goals

4 Celebrating CPFO Program s Success 20 Years Ago Idea Conceived 15 Years Ago First CPFOs Now Well Established Program Recognized By Employers

5 Program History 20 Years l Mid-1990s Small Group of Visionaries Initiated Idea GFOA Fully Embraced Program l 1997 GFOA Launched Program with First Exam (Seven Locations)

6 Program History 20 Years l Exams are introduced (1 per year) 1997 Governmental Accounting, Auditing and Financial Reporting 1998 Treasury and Investment Management 1999 Debt Management 2000 Operating and Capital Budgeting 2001 Retirement & Benefits, Risk Management, and Procurement l 2001 First CPFOs Council on Certification formed to oversee the CPFO program 7 Members

7 Program History 20 Years l 2004 l l 2016 Strategic Alliance formed GFOA and GNAC who now Administer Exams l 635 Have Received CPFO Designation

8 Program is Growing at a Steady Pace 9% Average Rate of Growth

9 Understanding What You Need to Do To Join the Professional Ranks of the CPFOs

10 CPFO Program Objectives To prepare practitioners to become finance officers To standardize the core knowledge needed for public finance

11 What is the CPFO Certification Program? The Certified Public Finance Officers Program (Certification Program) of the Government Finance Officers Association of the United States and Canada (GFOA) is a broad educational self-study program designed to verify knowledge in the disciplines of government finance.

12 What is the CPFO Certification Program? The Certification Program is governed by the Council on Certification. Technical and administrative support for the program is provided by Radford University's Governmental and Nonprofit Assistance Center.

13 What is the CPFO Certification Program? To earn the designation of Certified Public Finance Officer (CPFO), candidates must pass a series of five examinations covering the major disciplines of public finance. A candidate has seven years in which to successfully complete the program.

14 The Five Exams l Governmental Accounting, Auditing and Financial Reporting Exam l Treasury and Investment Management l Operating and Capital Budgeting Exam l Debt Management Exam l Retirement and Benefits, Risk Management and Procurement Exam

15 The Five Exams l An individual need not commit to taking all five examinations to benefit from participating in the program. Each examination is of such scope and quality that passing any one examination constitutes a recognizable achievement.

16 The Five Exams l Given 3 times a year l Can take two exams on same day l 3 ½ hours per examination l 175 multiple choice questions

17 Materials for the Five Exams l Based on reading list l GFOA is offering a 50% Discount on reading materials l Some material is free on CPFO site l Best Practices on GFOA site l Sample exams questions

18 Pass Rates 2015 Passing Standard is 75% Correct Answers GAAFR 68% Treasury 79% Budgeting 63% Debt 75% Retirement 83%

19 Eligibility Requirements l l l l l Education: baccalaureate degree from an accredited institution. Current Employment: Must have government as primary employer Employment History: A candidate must have had at least three (3) years of primary government employment during the previous ten (10) years to be awarded the designation of Certified Public Finance Office (CPFO). GFOA Membership: Ethics: A candidate must accept and observe the GFOA Code of Professional Ethics.

20 To Begin the Program l l Education: baccalaureate degree from an accredited institution. Ethics: A candidate must accept and observe the GFOA Code of Professional Ethics.

21 Summary of Fees l First exam taken = $295 l Subsequent exam taken or retaken = $145

22 What is on the Exams? Exam Specifications Bruce Chase Steve Beach Ann Shawver

23 Governmental Accounting, Auditing and Financial Reporting Examination Specifications Accounting and Internal Controls (55) A. Objectives of internal control B. Elements of a comprehensive framework of internal control C. Principles of effective internal control D. Responsibility for internal control E. Inherent limitations of internal control F. Evaluating control-related policies and procedures G. Internal control and fraud prevention H. Enterprise risk management

24 Governmental Accounting, Auditing and Financial Reporting Examination Specifications Auditing (25) A. Types of audits and auditors B. Auditing standards C. Reasonable assurance D. Materiality E. Opinion units F. Material weaknesses G. Single Audit H. Independent auditor s reports and findings I. Obtaining a financial audit J. Auditor rotation K. Audit committees L. Performance auditing M. Internal auditing

25 Governmental Accounting, Auditing and Financial Reporting Examination Specifications Financial Reporting (80) A. Internal financial reporting B. Special-purpose external financial reporting C. Characteristics of accounting data D. Reporting entity E. Users of general-purpose external financial reports F. Sources of generally accepted accounting principles for governments G. Fund accounting and fund financial statements H. Measurement focus and basis of accounting I. Significance of fund balance J. Pensions and other postemployment benefits Government-wide financial reporting L. Comprehensive annual financial report M. Contents of the letter of transmittal N. Contents of management s discussion and analysis O. Popular financial reporting P. Financial statement analysis

26 Investing (65) I. Investing Treasury and Investment Management Examination Specifications A. Legal requirements of investing B. Objectives of investing (e.g., safety, liquidity, yield, prudence) C. Process of establishing investment policy (including approval process) D. Investment risks E. Process of making investments (e.g., competitive bidding, safekeeping, custody, delivery vs. payment) F. Investment strategies H. Investment economics (e.g., the yield curve, strategy, monitoring financial markets and interest rates) I. Relationships with broker/ dealers J. Relationships with investment advisors G. Investment instruments (e.g., U.S. government securities, repurchase agreements depository instruments, certificates of deposit, bankers acceptances, commercial paper, mutual funds, local government investment pools, derivatives)

27 Treasury and Investment Management Examination Specifications Managing Banking Services (50) II. Banking relationship management A. Depository selection B. Custodian selection C. Bank compensation (e.g., compensating balances, direct fees, account analysis statement) D. Bank safety (e.g., role of federal regulators, factors to evaluate) E. Insurance and collateralization (e.g., FDIC limits, GASB Statement 3, surety bonds, collateral safekeeping)

28 Treasury and Investment Management Examination Specifications Managing Banking Services (50) III. Collections and Concentration A. Objectives of collections and concentration B. Methods used to collect and concentrate funds IV. Disbursements A. Objectives of disbursements B. Methods used to disburse funds C. Fraud prevention (e.g., positive pay)

29 Treasury and Investment Management Examination Specifications General Treasury Management (45) V. Cash management and investments A. Objectives of cash management and investments B. Components of the cash management and investments function VI. Cash flow forecasting A. Objectives of cash flow forecasting B. Controls and support in forecasting C. Types and frequency of forecasts D. Methodology used to forecast

30 Treasury and Investment Management Examination Specifications General Treasury Management (45) VII. Short-term borrowing A. Federal laws and regulations B. Access to credit markets (e.g., credit ratings, interest rates) C. Borrowing methods (e.g., direct loans, short- term debt instruments, lines of credit) VII. Information and control A. Cash accounting (e.g., bank and cash reconciliations, treasurers reports, interest allocation) B. Investment reporting C. Internal controls D. Use of technology (including security measures)

31 Debt Management Examination Specifications I. Overview of municipal debt market (50) A. Nature of borrowers and purposes of municipal debt issues B. Investors in municipal securities C. Determinants of municipal bond interest rates D. Security E. Maturity schedules F. Debt service structure and schedule types G. Use of original issue discounts and premiums H. Redemption features I. Sizing considerations J. Security and tax law - restrictions and requirements

32 Debt Management Examination Specifications II. Capital financing methods (50) A. Possibilities and advantages/disadvantages of each B. Policy and legal considerations in selecting and implementing a financing method C. Types of municipal debt D. Tax increment financing E. Long-term debt F. Short-term debt G. Derivatives H. Types of leases and transactions I. Types of credit enhancement and credit substitution J. Role of rating agencies K. Rating process and analysis L. Information requirements M. Rating designations

33 Debt Management Examination Specifications III. The bond sale (30) A. Bond issuance team B. Selecting a financial advisor C. Method of sale D. Competitive bid process E. Evaluation of bids F. Pricing bonds in a negotiated sale G. Form and payment of bonds H. Documentation I. Preparation of the official statement J. Role of underwriter in purchase and sale of bonds K. Syndicate activities L. Syndicate compensation M. Underwriter disclosure requirements

34 Debt Management Examination Specifications IV. General Debt Management (30) A. Investing bond proceeds B. Complying with arbitrage restrictions C. Assessing refinancing opportunities D. Providing secondary market disclosure E. Maintaining investor relations program F. Providing updated information to rating agencies G. Monitoring trading activity (price transparency) H. Tax lien securitization of debt I. Dealing with financial emergencies, bankruptcy, default

35 Operating and Capital Budgeting Examination Specifications I. Budget Process and organization (30) A. Understanding the relationship between operating and capital budgeting B. Legal foundations C. Organizational structures for budget process D. Roles and responsibilities of participants E. Budget classification structure F. Fund and fund structure G. Time period covered by operating and capital budgeting H. Relationship of budgeting and accounting

36 Operating and Capital Budgeting Examination Specifications II. Linkage of budget to long-range planning and assessment (30) A. Strategic planning B. Setting Goals C. Performance measures and benchmarks D. Efficiency and effectiveness measures E. Multi-year forecast F. Short-term and long-term goals G. Relationship of action plans to long-term goals H. Cost analysis and pricing services

37 Operating and Capital Budgeting Examination Specifications III. Budget and financial policies (30) A. Purpose of policies/roles in development (including consistency with goals/plans) B. Financial policies related to budgeting (areas) C. Planning and managing reserves (rainy day funds) D. Fund balance polices E. Programmatic policies/level of service standards F. Periodic review of policies, including impact of policies on budget

38 Operating and Capital Budgeting Examination Specifications IV. The operating budget (30) A. Types of budgets (line item, program, performance and zero-base budgets) B. Administration C. Formulation of executive budget D. Legislative review and approval E. Legal level of control F. Amending the budget G. Budget request H. Expenditure planning (mandated and discretionary expenditures) I. Position planning and analysis J. Monitoring and reporting on budget performance

39 Operating and Capital Budgeting Examination Specifications V. Revenue forecasting and analysis (20) A. Revenue options B. Revenue characteristics C. Taxes D. Setting user fees and charges E. Forecasting methodologies F. Reaching agreement on assumptions in the forecast G. Monitoring

40 Operating and Capital Budgeting Examination Specifications VI. Preparing/adopting the CIP and budget (20) A. Capital improvement program (CIP) B. Capitalization policy C. Evaluating capital facilities needs and alternatives D. Identifying projects for CIP inclusion E. Evaluating capital financing alternatives F. Evaluating methods (payback, present value, and return on investment) G. CIP/Capital budget approval H. Monitoring and reporting on capital project implementation

41 Retirement & Benefits, Risk Management, and Procurement Examination Specifications Retirement & Benefits (100) I. General issues of retirement and benefits administration A. Fiduciaries and legal considerations B. Types of plans C. Actuarial issues D. Funding approaches E. Employer accounting for benefits F. Required financial statement discloser of plan information G. Evaluating financial health of plans H. Investing pension and other postemployment benefits fund assets I. Health care cost

42 Retirement & Benefits, Risk Management, and Procurement Examination Specifications Risk Management (30) I. General issues of retirement and benefits administration A. Role of Risk management B. Identification and evaluation of risk C. Tools for managing risk D. Implementation of a risk management program

43 Retirement & Benefits, Risk Management, and Procurement Examination Specifications Procurement (30) I. General issues of retirement and benefits administration A. Organization of procurement function B. Competitive procurement C. Source selection D. Contract types E. Professional service contracts F. Cooperative purchasing

44 How to Prepare for the CPFO Exams Joan Jadali, MBA,CPFO

45 Plan Ahead l Order all Recommended GFOA Reading Material 3-4 months in advance l l l Identify non-gfoa reading material relevant to the CPFO text you are about to undertake Prepare a Reading/Study Calendar l l Commit to a regular schedule of study Allocate enough time to study each assignment thoroughly Reach out to colleagues to Join a Study Group

46 How to Study for the Exams l l l l Establish a comfortable location away from distractions and keep study material together in this area Take notes as you read and review them as you study Focus on GFOA Best Practices Plan enough time for an intense final review

47 Reach out to a Current CPFO l Current CPFO will act as your mentor or coach: Will provide you additional study tips Might share study materials with you Acts as a sounding board and is willing to listen and give advice/suggestions Keeps you on task and on schedule

48 How Have I Benefitted from Passing the Exam? l Took all 5 exams within 3 years l Earned my designation in 2009 l Worked with Employer on Financing New General Obligation Debt in 2011 Worked with Rating Agency, Bond Counsel and City Officials and was prepared thanks to the Debt Management l Modified various finance and accounting procedures for my employer based on the material I studied for the GAAFR Exam and the Debt Management Exam l The Retirement & Benefit, Risk Management & Procurement study materials provided me a great resource when my City converted from a DC to a DB plan in 2013.

49 How will the Programs Benefit You? l It s Personal Higher Level of Confidence l A useful Library of Reference Materials l Expands Your Knowledge for Work Applications l Prepares you for Promotions

50 Questions