GFOA Budget Awards Program Government Finance Officers Association of Arizona Thursday, October 25,...

GFOA Budget Awards ProgramGFOA Budget Awards Program

Government Finance Officers Association of Government Finance Officers Association of ArizonaArizona

Thursday, October 25, 2012Thursday, October 25, 2012

Eric R. JohnsonHillsborough County, (Tampa) FL

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GFOA established the Distinguished Budget Presentation Awards Program in 1984 to encourage and assist state and local governments to prepare budget documents of the very highest quality that reflect both the guidelines established by the National Advisory Council on State and Local Budgeting and the GFOA’s best practices on budgeting and then to recognize individual governments that succeed in achieving that goal.

Documents submitted to the Budget Awards Program are reviewed by selected members of GFOA’s professional staff and by outside reviewers with experience in public-sector budgeting.

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EligibilityEligibility

The program is open to submissions from any type of government (general-purpose or special-purpose) at either the state or local level that makes available to the general public an operating budget document in either an electronic (web site, CD) or hardcopy format, regardless of the length of the budget period (annual/biennial/triennial). Participants may submit either their proposed budget or their approved budget.

Submissions must be received within 90 days of the date when the budget was proposed/ adopted.

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Judging of Budget SubmissionsJudging of Budget Submissions

Each budget document submitted to the program is evaluated separately by three reviewers. Each reviewer rates a given budget document in regard to 27 specific criteria as: 1. information not present1. information not present, 2. 2. does not satisfy criteriondoes not satisfy criterion, 3. proficient 3. proficient, or 4. 4. outstanding.outstanding.

The criteria are grouped into four basic categories (presented on the next slide).

The reviewer provides an overall rating for each of the basic categories. To receive the award, a budget document must be rated either proficientproficient or outstandingoutstanding by at least two of the three reviewers for all four basic categories, as well as for the 14 specific criteria identified as “mandatory.”

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Arizona Participation in the ProgramArizona Participation in the Program 38 Arizona governments received the award last

year. Long-term recipients include: Tucson – 27 years Phoenix – 26 years Glendale and Tempe – 25 years Chandler – 24 years Scottsdale – 23 years

There are 16 current Arizona reviewers.

Diane Archer of Casa Grande has been a reviewer since August 1987.

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Four Roles of a Budget DocumentFour Roles of a Budget Document

1. Policy Document

2. Financial Plan

3. Operations Guide

2. Communications Device

The CriteriaThe Criteria

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Reviewer ID Document number

Name of entity State/Province

Record number Order number

1 = Information not present, 2= Does not satisfy criterion, 3=Proficient, 4= Outstanding

Criteria Description

Introduction and Overview

* C1 Table of contents (mandatory)

P1 Strategic goals & strategies

P2 Short-term organization-wide factors influencing decisions

* P3 Priorities and issues (mandatory)* C2 Budget Overview (mandatory)

Financial Structure, Policy, and Process

* O1 Organization chart (mandatory)

F1 Fund descriptions and fund structure

O2 Department/fund relationship

F2 Basis of Budgeting

* P4 Financial policies (mandatory) * P5 Budget process (mandatory)

Financial Summaries

* F3 Consolidated financial schedule (mandatory)

* F4 Three (four) year consolidated and fund financial schedules (mandatory)

* F5 Fund balance (mandatory)

* F6 Revenues (mandatory)F7 Long-range financial plans

Capital & Debt

* F8 Capital expenditures (mandatory)

F9 Impact of capital investments on operating budget* F10 Debt (mandatory)

Departmental Information

* O3 Position summary schedule (mandatory)

* O4 Department descriptions (mandatory)

O5 Unit goals and objectivesO6 Performance measures

Document-wide Criteria

C3 Statistical/supplemental section

C4 Glossary

C5 Charts and graphs C6 Understandability and usability

Overall as a policy document

Overall as a financial plan

Overall as an operations guide

Overall as a communications device

Grade

Please rate each criterion and each overall category

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Reviewer ID Document number

Name of entity State/Province

Record number Order number

1 = Information not present, 2= Does not satisfy criterion, 3=Proficient, 4= Outstanding

Criteria Description

Introduction and Overview

* C1 Table of contents (mandatory)

P1 Strategic goals & strategies

P2 Short-term organization-wide factors influencing decisions

* P3 Priorities and issues (mandatory)* C2 Budget Overview (mandatory)

Financial Structure, Policy, and Process

* O1 Organization chart (mandatory)

F1 Fund descriptions and fund structure

O2 Department/fund relationship

F2 Basis of Budgeting

* P4 Financial policies (mandatory) * P5 Budget process (mandatory)

Financial Summaries

* F3 Consolidated financial schedule (mandatory)

* F4 Three (four) year consolidated and fund financial schedules (mandatory)

* F5 Fund balance (mandatory)

* F6 Revenues (mandatory)

F7 Long-range financial plans

Capital & Debt

* F8 Capital expenditures (mandatory)

F9 Impact of capital investments on operating budget* F10 Debt (mandatory)

Departmental Information

* O3 Position summary schedule (mandatory)

* O4 Department descriptions (mandatory)

O5 Unit goals and objectivesO6 Performance measures

Document-wide Criteria

C3 Statistical/supplemental section

C4 Glossary

C5 Charts and graphs C6 Understandability and usability

Overall as a policy document

Overall as a financial plan

Overall as an operations guide

Overall as a communications device

Grade

Please rate each criterion and each overall category

ExamplesExamples

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Introduction and OverviewIntroduction and Overview

Los Alamos

County, NM

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Introduction and OverviewIntroduction and Overview

Spotsylvania County, VA

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Strategic Goals and StrategiesStrategic Goals and Strategies

Los Alamos County, NM

14Los Alamos County, NM


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City of Coconut Creek, FL

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Overview: Other Planning ProcessesOverview: Other Planning Processes


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National economy Legislative impacts Tax base

growth/decline Tax/fee/rate changes Inflation impacts Pay/benefits impacts Business growth/job

losses Foreclosures Unemployment rate Grant funding

Citizen surveys Strategic initiatives Capital initiatives Service level changes Efficiencies/savings Shared services

contracts Economic develop-

ment initiatives Reserve levels

Short-term Factors Influencing Short-term Factors Influencing Budget DecisionsBudget Decisions

What else???What else???

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Fund StructureFund Structure

City of Coconut Creek, FL

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Department/Fund RelationshipDepartment/Fund Relationship


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Basis of BudgetingBasis of Budgeting

Define it (modified accrual, cash, or accrual) and disclose if it differs from the basis of accounting.

If the basis is different, describe the differences.

Observations:

The emphasis is on how the budget is constructed (we really already know the basis of accounting)

The statement in the budget should not conflict with what is stated in the CAFR (I will always look on-line).

Budgets frequently do differ. For example, proprietary funds are frequently treated and presented in the budget the same as governmental funds.

Hillsborough County, FL

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Financial PoliciesFinancial Policies

Financial policies can provide context to the entity’s decision-making process.

Note the discussion of process.


22Hillsborough County, FL

Financial PoliciesFinancial Policies

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Financial Summaries: Fund BalanceFinancial Summaries: Fund Balance

A projected $2.1 million use of fund balance in Special Revenue Funds in FY 12 is shown as a (positive) 0.83% change. The real change is a 17% reduction.

A projected $80.7 million use of fund balance in the Sales Tax IV Fund in FY 12 is shown as a (positive) 0.05% change. The real change is a 95% reduction.

A projected FY 11 increase for the General Fund is shown as 1.26% -- but it is a 26% increase.

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25Spotsylvania County, VA


Note that the narrative on the previous slide and the detail below supplement a typical table (left) showing the planned drawdown in fund balance.

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In addition to historical detail above, the narrative (right) provides historical context and explains the methodology used to project this revenue.

Financial Summaries: Financial Summaries: RevenuesRevenues

Hillsborough County, FL

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Financial Summaries: RevenuesFinancial Summaries: Revenues


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Impact of Capital Investments onImpact of Capital Investments onthe Operating Budgetthe Operating Budget

Lake County, IL

Knowing the impact on the operating budget of capital investments is important. This investment of $5.6 million in federal dollars saves $0.4 million annually.

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Impact of Capital Investments onImpact of Capital Investments onthe Operating Budgetthe Operating Budget

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ACCOMPLISHMENTS AND CHALLENGES IN FY2011

• No challenges• We accomplished everything we sought out to accomplish.

GOALS, OBJECTIVES, PERFORMANCE MEASURES

• No goals or measures submitted.

This county criminal court (headed by an elected judge) where there were “no goals or measures submittedno goals or measures submitted” and where “no challengesno challenges” were faced but where “we accomplished everything we sought to accomplishwe accomplished everything we sought to accomplish” sounds like a campaign slogan -- but perhaps not for the incumbent. This illustrates the challenge we may face in gathering information from some departments or agencies.

Departmental Information: Performance MeasuresDepartmental Information: Performance Measures

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Why doesn’t this information, in an adopted FY 12 budget, satisfy the budget criterion for performance measures?

32Fairfax County, VA


33Fairfax County, VA


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“Since 1978, the Triple AAA rating has resulted in bond sale savings of more than $484.66 million. Paying less interest in debt for capital projects means that more funding is available for public facilities and services for residents.”

Fairfax County, VA

Departmental Departmental Information : Information : Performance Performance

MeasuresMeasures

35Los Alamos County, NM


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Document-wide Criterion: A Glossary Document-wide Criterion: A Glossary

An investment in developing a comprehensive glossary pays off in future years when much less time is needed to update it. This one is 10 pages long – excluding the 3-page list of acronyms.


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Document-wide Criterion: Disclosure of Document-wide Criterion: Disclosure of Abbreviations and Acronyms – and an IndexAbbreviations and Acronyms – and an Index


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Charts and GraphsCharts and Graphs


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Charts and GraphsCharts and Graphs


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Document-wide UnderstandabilityDocument-wide Understandability and Usability and Usability

Understandability– Consistency in formatting (text, tables, charts)– Consistency in presentation of information (level

of detail, dollar amounts match, definitions)– Doesn’t look or read like a CAFR (which has a

different audience)

Usability– Pagination (particularly important for on-line and

electronic documents)– Binding method (please, no 3-ring binders!)– Flow, navigation tools (table of contents, links,

index, grouping of related information)

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Who Uses the Budget Document?Who Uses the Budget Document?

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Users of a Budget DocumentUsers of a Budget Document

1. Businesses and Citizens

2. Elected officials

3. Rating Agencies

4. Finance/Budget Staff, Departments

5. Academic researchers

6. Prospective managers

7. Peer jurisdictions

http://www.tampagov.net/dept_City_Council/

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What are the Benefits to Businesses and Citizens?What are the Benefits to Businesses and Citizens?

Help them understand what we do (versus other governments)

Explain how we are organized Show how we compare against ourselves

over time and against other similar governments

Paint a picture of our community, economy, strengths, challenges

Show how we pay for government and the structure of our revenue

Explain how things have changed Present our plans for the future

Others???Others???

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What are the Benefits to Elected Officials?What are the Benefits to Elected Officials?

Help them paint a picture for their constituents:

Priorities they set Strategies they employed Policies they have adopted Improvements (services, projects) Savings/efficiencies How they compare with other

governments

Others???Others???

http://www.tampagov.net/dept_City_Council/

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What are the Benefits to Departments/Employees?What are the Benefits to Departments/Employees?

Explain performance expectations Document service changes Document personnel changes Document equipment and capital

funding Provide a multi-year financial plan Explain policies/procedures Provide the “big picture” that they may

normally not see.

Others???Others???

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What are the Benefits to Rating Agencies What are the Benefits to Rating Agencies and the Financial Community?and the Financial Community?

Show we recognize our challenges Show we have a long-term (or at least a

medium term) perspective on our finances Document our policies, procedures, and

strategies Explain our reserves, debt capacity,

revenue trends Provide a “big picture” context to the

underlying detail

Others???Others???

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What are the Benefits to Prospective Managers?What are the Benefits to Prospective Managers?

Learn about the community Learn about the organization structure and

fund structure Examine the existing budget process,

formats, products Examine what departments do – and how

well they do it Read the challenges, strategies, actions and

future plans reflected in the budget message and overview

Get the “big picture”

Others???Others???

GFOA Budget Awards Program Government Finance Officers Association of Arizona Thursday, October 25,...

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