The Certified Public Finance Officer (CPFO) Designation. Dane Wadlé, CPFO

Transcription

1 The Certified Public Finance Officer (CPFO) Designation Dane Wadlé, CPFO

2 Session Agenda My CPFO story Program Criteria and Goals Exam Content Preparing For Exams and Exam Strategy

3 My CPFO Story

4 My Story 2012 Working as an analyst in a City Manager s Office Wanted to enhance knowledge of public finance Help stand out in the job market Two years to complete program Balance: work, (growing) family and studying July 2014 Passed 5 th test and earned my designation

5 My Story Helped me get my current job Field Coordinator with California Special District Association Having the designation definitely set you apart. Researched the program and discovered how rigorous it is. Those familiar with GFOA respect CPFO

6 Program Criteria and Goals

7 Celebrating CPFO Program s Success 20 Years Ago Idea Conceived 16 Years Ago First CPFOs Now Well Established Program Recognized By Employers (Who Know About It)

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

9 Program History 20 Years 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 2001 First CPFOs Council on Certification formed to oversee the CPFO program 7 Members

10 Program History 20 Years Strategic Alliance formed between GFOA and Radford University Government Nonprofit Assistance Center who now Administer Exams 635 Have Received CPFO Designation

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

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

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

14 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.

15 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.

16 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.

17 The Five Exams Governmental Accounting, Auditing and Financial Reporting (GAAFR) Exam Treasury and Investment Management Operating and Capital Budgeting Exam Debt Management Exam Retirement and Benefits, Risk Management and Procurement Exam

18 The Five Exams 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.

19 The Five Exams Given 3 times a year (spring, summer and fall) Different locations throughout the country Can take two exams on same day 3 ½ hours per examination 175 multiple choice questions

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

21 Eligibility Requirements 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: Not required (I was not) Ethics: A candidate must accept and observe the GFOA Code of Professional Ethics.

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

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

24 CPFO Pass Rates Treasury GAAFR Budget Retirement Debt Year % 59% 80% 85% 75% % 69% 63% 69% 76% % 68% 63% 83% 75% AVG SCORE 64.6% 65.3% 68.6% 79% 75% Passing Score = 75% correct for entire test

25 My CPFO Scores Followed closely with the GFOA data Treasury = 82% GAAFR = 83% Budgeting = 83% Retirement = 86% Debt = 90% Treasury exam much together for me Not a lot of experience in cash management Retirement and debt exams easier

26 Test Order Recommendation My recommendation for test order: Treasury GAAFR Budgeting Retirement Debt Take tougher exams first Based on pass rate data and my experience

27 What is on the Exams? Exam Specifications

28 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

29 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

30 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 post-employment benefits

31 Treasury and Investment Management Examination Specifications Investing (65) I. Investing 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 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)

32 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)

33 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)

34 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

35 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)

36 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

37 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

38 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

39 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

40 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

41 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

42 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

43 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

44 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

45 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

46 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

47 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

48 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

49 How to Prepare for the CPFO Exams Dane Wadlé, CPFO

50 Plan Ahead o Order all Recommended GFOA Reading Material 3-4 months in advance o Remember GFOA advisories and best practices o Identify non-gfoa reading material relevant to the CPFO text you are about to undertake o EX: Guide to Local Government Finance in California o Prepare a Reading/Study Calendar o Commit to a regular schedule of study o Allocate enough time to study each assignment thoroughly o Reach out to colleagues to Join a Study Group

51 How to Study for the Exams 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 Handout Focus on GFOA Best Practices No need to be an expert on all specifications Example = Retirement Test: Heavily weighted toward Retirement and Benefits Example = Treasury Test: More questions devoted to Investing Plan enough time for an intense final review

52 Get Help From Expert Current CPFO will act as your mentor/ coach: Will provide you additional study tips Act as a sounding board and is willing to listen and give advice/suggestions Keep you on task and on schedule

53 How Have I Benefitted from Passing the Exams? Took all 5 exams within 2 years Earned my designation in 2014 Enhanced my knowledge of public finance topics Accounting Treasury Management Debt Issuance Accounting exam has helped me read financial statements and assist special districts The Retirement & Benefit, Risk Management & Procurement study materials improved my knowledge of retirement issues (how defined benefits plans work, actuary issues, GASB 68 issues)

54 How will the CPFO Program Benefit You? It s Personal higher level of confidence A useful library of reference materials Expands your knowledge for current job Prepares you for Promotions Case Study: Interview with a CPFO Individual applying for Asst. Finance Director openings Prior to having CPFO, received interview for ½ of open positions he applied to After earning CPFO, called for interview on all

55 CPFO Resources GFOA Radford University cpfo.html Me (916)

56 Questions Dane Wadlé, CPFO