Professionalism and Financial Management: A Study of CFOs and Supervisory Roles in U.S. Federal Agencies

Abstract

Professionalism plays a critical role in public management, yet prior research has faced challenges in defining the professionalism of key officials and in identifying appropriate measures to assess its relationship with performance. Specifically, although agency chief financial officers (CFOs) are central to managing federal finances, their influence on financial performance has been largely unexamined. This study analyzes the effects of CFO professionalism—defined by specialized education, work experience, and career aspirations—on the financial management performance of 26 U.S. federal agencies from 2003 to 2021. It also examines how agency-level professionalism, particularly the presence of experienced professionals in supervisory positions, influences financial performance. Using an ordinary least squares (OLS) model with agency and year fixed effects, the findings indicate that CFOs’ prior work experience, especially their tenure, is positively associated with financial performance, whereas educational background shows no significant effect. At the agency level, a higher proportion of professional specialists in supervisory positions is associated with a higher level of financial performance. These results underscore the importance of both individual executive attributes and broader organizational professionalism in enhancing public management outcomes.