OMB mulls scrapping Senate confirmation for chief financial officers

As part of an effort to streamline the presidential appointments process, the Bush administration is rethinking whether the Senate needs to confirm nominees for agency chief financial officer positions, an Office of Management and Budget official said last week.

Of roughly 3,000 political appointments in the federal government, about 500 are subject to Senate review, according to Paul Light, a senior fellow at the Brookings Institution. The administration is working to reduce this number, OMB Controller Linda Springer said at a Sept. 10 hearing held by the House Government Reform Subcommittee on Government Efficiency and Financial Management.

OMB officials have suggested that Senate approval of CFOs might not be essential, Springer explained. Eliminating this requirement would speed up the appointment process for the position. An exception would be made for departments in which the CFO also serves as an undersecretary or secretary, as is the case at the Defense Department, she noted.

The Presidential Appointee Initiative, a Brookings research project dedicated to making the political appointments process fair and efficient, has advocated reducing the number of nominees requiring Senate confirmation. But initiative researchers did not have the CFO position in mind, said Light, who served as a senior adviser to the group, and is director of the Brookings Institution's Center for Public Service.

"We're not talking about the key executive decision-making positions in agencies," Light said in an interview Monday. Exemptions from Senate review would be more appropriate for political positions "not directly involved in [decisions] about the delivery of public goods and services," he explained. For instance, assistant secretaries for public affairs should not need Senate approval, he added.

"The CFO holds one of the most important jobs in a department or agency," Light said. "The person who occupies it should be subject to the fullest possible review."

Lawmakers at last Wednesday's hearing had similar reservations. But Springer told them she sees little cause for concern. By the time CFO nominees reach Senate hearings, they have "already cleared a high hurdle," she said. Reviews by senators provide "another set of eyes," but are not essential, she added.

Rep. Todd Platts, R-Pa., chairman of the subcommittee, called the hearing last week to gather input on legislation that would add the Homeland Security Department to the list of major departments and agencies included in the 1990 Chief Financial Officers Act. In addition to requiring Homeland Security to seek Senate approval of CFO nominees, the bill (H.R. 2886), introduced on July 24, would ensure that the department's financial head reports directly to the secretary.

The legislation is necessary to encourage "sound business practices" at the Homeland Security Department, which "inherited" agencies in varying financial condition and now must consolidate 19 different financial management systems and 15 compensation systems," said Platts, one of the bill's authors. Under H.R. 2886, DHS would go through an annual financial audit, just as the other 24 CFO Act agencies do.

"[DHS] should not be the only Cabinet-level department not covered by what is the cornerstone for pursuing and achieving the requisite financial management systems and capabilities in the federal government," testified McCoy Williams, director of financial management and assurance at the General Accounting Office.

OMB would like Homeland Security to have annual audits, and approves of Platts' legislation aside from the Senate confirmation and direct reporting requirements for CFOs, Springer said. The 2002 Homeland Security Act directs the department's CFO to report to an undersecretary of management, who in turn reports to the secretary. "Requiring the CFO at the department to report directly to the secretary would dilute this principle," Springer testified.

Platts questioned whether the department's CFO could be effective without having direct access to the department's top official. Homeland Security's current CFO, Bruce Carnes, testified that even though he does not currently have a direct reporting relationship to Secretary Tom Ridge, he has access to Ridge when he needs it. For instance, Carnes and Ridge spent four days going over the department's budget.

But Platts argued that a direct reporting relationship should be institutionalized to ensure that future CFOs have similar unfettered access. "You might have access today," he told Carnes. "But that's today. That might not be the norm, and that gets to the issue of why this needs to be done."

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