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Financial Leadership: Who’s in control?
Recently, a client business called in search of advice on how to transition its accounting department in light of a loyal and long-tenured employee nearing retirement. Just earlier this summer, a separate discussion centered around the right kind of hire for a department that is outgrowing the current chief of accounting and the related potential […]
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Recently, a client business called in search of advice on how to transition its accounting department in light of a loyal and long-tenured employee nearing retirement. Just earlier this summer, a separate discussion centered around the right kind of hire for a department that is outgrowing the current chief of accounting and the related potential transition challenges.
Both interactions were productive because the business leaders were planning for future needs instead of being merely reactive. Let’s face it, any time that employee turnover happens, even for the most joyous of reasons, it causes upheaval. By planning ahead, business owners can strategically position the finance function to be more effective and integral to enterprise success.
In each situation, a portion of the discussion centered around the title that would be used, which led to a bit of clarification — on both enterprise needs and candidate experience. We hear a variety of terms bandied about: clerk, controller, VP of finance, chief financial officer (CFO), comptroller, chief accountant, financial analyst, to name just a few. The titles are broadly used, and many times the duties to be performed spread beyond the title, while often the title itself doesn’t necessarily match the responsibilities.
Let’s focus on the two specific types of financial leadership found in top organizations: the CFO and the controller.
The controller is often thought of as the head of the accounting department or function. The controller is not a bookkeeper, however. The primary role of the controller is to maintain and operate the books and records of the business, looking back at data that has already been generated. The controller also maintains standard operating procedures and internal controls for accounting and bookkeeping activities.
The CFO, on the other hand, uses the financial data that has been produced in order to accurately predict the financial future of the organization. While a clear understanding of past financial performance is necessary, the CFO’s key responsibility relates to strategic and tactical planning.
To illustrate the differences between CFO and controller, consider that the controller is responsible for producing financial statements that reflect historical activity. Suppose these financial statements reflect a shift in gross profit or productivity. The CFO’s role is to evaluate and articulate the causes behind these changes. Armed with this understanding, the CFO must establish the corrective actions needed to address the risk of continued negative results or employ procedures to support the continuation of positive trends.
In addition to financial and strategic planning, the CFO is responsible for cash-flow management, credit and collections, budgeting, internal controls, and compliance. In a nutshell, the CFO provides financial oversight and management, forecasting, and data-based decisions. By correlating financial, operational, and regulatory data, the CFO advises the executive team and provides the basis for financial impacts of decisions in a real-time manner.
The CFO is a member of the executive management team, planning and implementing growth and profitability strategies and acquisitions. The CFO handles financial analysis and formulates financial, tax, and risk-management strategies.
Whereas CFOs are responsible for developing management reports, financial statements, budgets and financial plans, capital and cash-flow projections, performance measures, and internal controls, the controller’s role is focused on preparing reports and budgets, processing capital requests, and maintaining performance measures.
What does your enterprise require? It likely depends on your size, complexity, and vision. Certainly good financial information is a must, so start there. Controller is like a necessity. As for a CFO? While you may not require or be able to afford a full-time CFO, the value should not be overlooked. Perhaps a part-time, consultative relationship makes sense? Or maybe an accounting department overhaul is needed.
Whatever your circumstance, a conversation with your CPA is an ideal way to get headed in the right direction — toward success.
Gail Kinsella is a partner in the accounting firm of Testone, Marshall & Discenza, LLP. Contact Kinsella at gkinsella@tmdcpas.com
Common Core Still Leaves Room for Improvement
The New York State Department of Education recently released the assessment results for third through eighth graders. The Department of Education reports some gains were made statewide over last year’s results. Statewide, the percentage of students scoring on the math exam at or above the proficient level (receiving a score of 3 or 4) increased
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The New York State Department of Education recently released the assessment results for third through eighth graders. The Department of Education reports some gains were made statewide over last year’s results. Statewide, the percentage of students scoring on the math exam at or above the proficient level (receiving a score of 3 or 4) increased only slightly from 31.2 percent to 35.8 percent. The English Language Arts exam showed virtually no change, with 31.4 percent of New York students “proficient” compared to last year’s score of 31.3 percent scoring proficient.
This was the first year the state tests were based on Common Core learning standards. Many have heard the term Common Core by now. It is meant to serve as a consistent set of expectations for what students should learn to be able to graduate “college and career ready.” New York was one of the first states to implement these standards.
Whether Common Core will achieve its aim is debatable and often depends on who you ask. One thing that is for sure: it’s been one year since Common Core was introduced to New York’s public school students and I continue to hear from constituents who are upset at the direction of education. With test scores recently being mailed to parents, it has brought the debate back to the forefront.
The introduction of the Common Core curriculum last fall was met with criticism by teachers, parents, students, and administrators. Hearings were held across the state, with angry and concerned people urging the Department of Education to slow the process, make changes, and give teachers time to understand the modules themselves before they were pressured to teach the kids and have their job performance tied to students’ test scores. Some schools have decided on using the modules exactly as they are written, while others have allowed instructors more latitude. Most lower-wealth schools are forced to use the state modules because they cannot afford to develop their own curriculum that meets the new standards.
A lot is at stake for school districts because state funding can be affected by a school’s performance. Parents have the right to “opt out” but are strongly encouraged to have their children take the test. Without 95 percent participation, schools will not make “Adequate Yearly Progress” and a district’s Title I funding could be affected. In addition, there are other intervention and consequences for schools in this situation. It’s especially tricky for low-wealth schools because their budgets are highly dependent on state aid. Some schools are facing this situation after the Common Core’s shaky rollout and parents rallied in certain districts to “opt out.”
In response to the justifiable outrage over the rollout of the Common Core, the state made some changes, and in the legislature, we delayed tying teacher evaluations to student performance by two years. We also prohibited standardized testing for Pre-K through second grades. Further, we prohibited promotion or placement decisions of students based solely on state assessments. Other changes were made by the Regents and the Department of Education. They extended the phase-in so that the Class of 2022 will be the first class that is required to pass English and Math Regents exams at college and career-ready levels. Previously, it was the class of 2015. The Board of Regents also provided alternative testing for special-education students, subject to the receipt of a federal waiver. It also further enhanced protections for personally identifiable student information and created penalties for breach of student and teacher data.
Wherever you stand on this issue, it’s important to let your school board members, your school principals, and students’ teachers know your thoughts. Last year, some of the changes to Common Core were made because people talked to their representatives and made their voices known to the Board of Regents.
I would encourage you to write directly to the State Education Department at New York State Education Department, 89 Washington Ave., Albany, N.Y. 12234, by phone at (518) 474-3852, or you may find online contact forms at www.nysed.gov/contact-NYSED. You may also write to the Board of Regents at New York State Education Department, 89 Washington Ave., Board of Regents, Room 110 EB, Albany, N.Y. 12234 or email: RegentsOffice@mail.nysed.gov.
William (Will) Barclay is the Republican representative of the 120th New York Assembly District, which encompasses most of Oswego County, including the cities of Oswego and Fulton, as well as the town of Lysander in Onondaga County and town of Ellisburg in Jefferson County. Contact him at barclaw@assembly.state.ny.us, or (315) 598-5185.
NUAIR Alliance establishing CNY as leader in UAS industry
One of the most rewarding aspects of this job (as president and CEO of CenterState CEO) is seeing, firsthand, the transformative effects that new growth and development have on our communities and the people who live here. As a kid who grew up in Utica, at a time when the Griffiss Air Force Base was
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One of the most rewarding aspects of this job (as president and CEO of CenterState CEO) is seeing, firsthand, the transformative effects that new growth and development have on our communities and the people who live here.
As a kid who grew up in Utica, at a time when the Griffiss Air Force Base was shut down, seeing economic development that taps into the resources at Griffiss International Airport is personal. I watched this community go through a dramatic change virtually overnight. Five-thousand families were immediately and directly affected. Friends of mine left school and moved away in the middle of the year. Businesses that had grown to support Griffiss closed.
It is through this lens that I see the new opportunities and permanent businesses that the NUAIR Alliance is attracting to this region. Since being selected by the Federal Aviation Administration to operate one of just six Unmanned Aircraft Systems (UAS) test sites in the country, the NUAIR Alliance is conducting research aimed at safely integrating unmanned systems into the national airspace. The alliance is currently working with six companies who are authorized to test new technologies, conduct research supporting industries from sensors to agriculture, and collecting and analyzing data to develop safety, performance, and certification standards for commercial and civilian use of UAS.
Ultimately, our region’s role in the UAS industry means new economic-development opportunities and jobs. It’s estimated that UAS test sites could have a total economic impact of more than $100 million and create more than 400 additional jobs in New York. Nationwide, the total economic impact of UAS industry in the U.S. could reach $82 billion by 2025. These opportunities have the potential to tap the expertise of our region’s top academic institutions (including Clarkson, Syracuse University, and Cornell, to name a few) and leading-edge companies in our region.
How our region can best maximize these innovations, jobs, and investments was the focus of the inaugural NUAIR Unmanned Aircraft Systems Industry Days, a two-day event that [took place Sept. 29-30]. More than 100 academic, public, and industry partners came together to share ideas and best practices as we advance this new industry in our region. Additionally, these thought leaders will work toward solutions for common challenges facing the industry as a whole.
This event marks an important milestone in the trajectory of the NUAIR program, which is establishing our region and the state as a leader in civil and commercial UAS development.
Robert M. Simpson is president and CEO of CenterState CEO, the primary economic-development organization for Central New York. This editorial is drawn and edited from the CEO Focus email newsletter the organization sent out on Sept. 26.
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