ROLE OF THE NONPROFIT CFO IN EXECUTIVE MANAGEMENT
Program Managers Part 2
Is it any wonder that program managers cringe every time an email from the CFO arrives in their inbox? If it’s not a request for a budget meeting or a warning about overspending a grant, it’s a problem with staff turning credit cards receipts in late or supervisors forgetting to attach the packing slip with an invoice. From a program manager’s perspective, he could just “waste” all of his time satisfying the demands of needy CFOs and their staff rather than doing the real work of delivering on his programs’ mission. Unfortunately, internal controls and transaction processing policies are at the core of daily operations and must be wrestled with, like it or not.
The level of pain to be endured in daily operations is a function of agency culture. I have seen toxic relationships flourish when the program staff are viewed as careless and indifferent to financial policies, and finance staff are viewed as unreasonably demanding, meddlesome, and clueless as to the mission. Fortunately, there are positive steps the CFO can take to steer agency culture towards healthy communication and collaborative problem solving with the common goal of smooth operations—hopefully reducing the program managers’ burden in the process.
When I started my fifteen-year tenure as CFO of a $20 million human services agency, the business office was sending out little pieces of paper each month to every staff member who had made long distance calls, demanding reimbursement for the personal calls. The payments came back in the form of quarters taped to little pieces of paper. I was able to open up a goodwill account with the managers by putting a stop to this practice. With new telecommunications technology, long distance costs were negligible, and since there was no material financial effect of the personal calls, Finance could turn over the monitoring of program staff’s phone habits to their supervisors.
The balance in that goodwill account shot up when I trained finance staff to assimilate my concept of the balance between rigorous enforcement of the rules and empathy for the program staff’s challenges. Say a case manager serving developmentally disabled children was unable to get a credit card receipt for a $5.53 ice cream purchase and paid sales tax on it. It shouldn’t take much to imagine what it was like to handle the kid, the ice cream cone, the tax-exempt form, the credit card, and the receipt all at one time. Previously, the staff might have berated the case manager or demanded that he go back and get the receipt. Instead, we gave him an exception form to complete and submit with his manager’s signature. For an unusual circumstance with an immaterial amount, the exception form was a fine substitute for a receipt.
The point here is that the CFO has the power to encourage all staff, from the top down to understand the need for policies and procedures, and to help them work together to conscientiously adhere to them. This power stems from the CFO’s charge to create and oversee effective operational systems. It also stems from the CFO’s ability to lead by example.
How does the CFO encourage empathy and cooperation? Let’s start with how not to: by seeking out friendships with staff, sharing confidences, socializing over drinks, etc. Crossing professional boundaries is a supremely dangerous game, almost certain to end badly. In my early days my misguided attempts to keep my staff happy ended up with their dogs at work and trips to the animal hospital. I once allowed myself to play mediator in a dispute between two co-workers over a landlord/tenant arrangement that went bad. Over time I found my comfort level on personal relationships. I wasn’t invited to Friday night happy hour, but my boundary line spared myself and others a lot of trouble. The good news is that you can always count on professional relationships grounded in respect and courtesy.
Executive level responsibilities
Proper and timely recording of cash in and cash out requires buy-in from every employee starting with the executive team and ending with the rank and file. Your goal is consensus from the executive team on policies and procedures that are manageable and minimize the risk of errors, theft, fraud, and illegal acts. Your opinion of the importance of collecting credit card receipts, obtaining authorization for purchases, coding invoices, remembering pin numbers at gas pumps, submitting packing slips, etc. may differ from those of the managers and they will, understandably, be protective of their staff. Prepare yourself to stay true to the purpose of internal controls while being sensitive to the realities of everyday operations. Compromise, flexibility, and yes, even creativity, are the operative words. Ultimately, the support of the ED is also indispensable. Hopefully he will be there for you when disputes arise.
Avoiding toxic squabbling
Once the executive team has agreed on the policies the work begins. In any organization there are numerous opportunities for communication to go wrong. With thousands or hundreds, or even twenty transactions per month, testy conversations, failures to follow policy, and erroneous accusations are bound to happen.
Here are some suggestions to avoid some of the worst issues and misunderstandings:
· Invest in your relationships with the managers; seek their input on procedural matters. Your excellent relationships with the program managers will set the tone for a spirit of mutual trust and cooperation throughout the agency. When the manager is happy to take your phone calls and partner with you to find solutions to operational snags you know you have succeeded.
· Make darn sure that your staff know that you demand the utmost respect and responsiveness to the needs of program staff. Program staff will put in the effort to follow procedures if they believe that Finance will go out of their way for them when the need is dire.
· Remember that your business office is there to serve the agency. All staff, including the executive team, expect their paychecks to appear at the appointed day and time. A reliable schedule for credit card payments, travel reimbursements, and petty cash replenishments is also expected. As you strive for seamless service:
o Prioritize cross-training so that all critical functions have timely backups.
o Build capacity for emergency checks to be written with quick turnaround no matter how many people are out on a given day.
o Build cushion into schedules so that you can meet deadlines even if something goes wrong or a holiday interrupts your routine.
· Stay vigilant. Head off problems as they arise. If a policy isn’t working find a different way to accomplish its purpose. This is where creativity comes in. Perhaps there is a technological solution to an operational problem. The market is awash in software solutions for credit card management, purchasing work flow, invoice payment, etc. Perhaps you can substitute email approvals for paper signatures, or scan credit card receipts to a network folder to avoid losing receipts in transit to Finance.
· Meet with groups of your organization’s rank and file if you can. Listening to their concerns will almost surely result in more trust and cooperation.
Trust me, I know how busy you are. You might be able to make use of only a fraction of my pearls of wisdom. But I guarantee that you will see positive results from your efforts to reach out, explain, empathize, and collaborate as you travel together along this path.