Products and Services Tab, Resources
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Transcript of Products and Services Tab, Resources
Products and Services Tab, Resources
189 Best Practices and Advisories
Developed and proposed by GFOA Standing Committees
Approved by the GFOA Executive Board
Second highest searched area of site
What is number 1?
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GFOA Best Practices identify specific policies and procedures as contributing to improved government management. It aims to promote and facilitate positive change rather than merely to codify current accepted practice. Partial implementation is encouraged as progress toward a recognized goal
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GFOA Advisories identify specific policies and procedures necessary to minimize a government's exposure to potential loss in connection with its financial management activities. It is not to be interpreted as GFOA sanctioning the underlying activity that gives rise to the exposure
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14 new best practices
1 new advisory
7 revised best practices
2 revised advisories
24 total documents
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Accounting & Financial Reporting
Budgeting & Financial Planning
CIP / Economic Development
Debt Management
Financial Management
Pension & Benefit Administration
Technology
Treasury Management
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Committee on Accounting, Auditing, and Financial Reporting (CAAFR)
Committee on Governmental Budgeting and Fiscal Policy (BUDGET)
Committee on Governmental Debt Management (DEBT)
Committee on Economic Development and Capital Planning (CEDCP)
Committee on Retirement and Benefits Administration (CORBA)
Committee on Treasury and Investment Management (TIM)
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New best practice The Committee on Accounting, Auditing, and Financial
Reporting (CAAFR) updated this best practice Reflects changes made to the Committee of Sponsoring
Organizations’ (COSO) Internal Control—Integrated Framework in 2013
GFOA recommends that state and local governments adopt
the COSO’s Internal Control—Integrated Framework (2013) as the conceptual basis for designing, implementing, operating, and evaluating internal control
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New best practice Organized to provide guidance to government
finance officers on the contents and format for the presentation of departmental financial reports that are issued separately from a government’s general fund financial report
Authoritative accounting and financial reporting standards do not specifically addressed the contents of separately issued financial reports of units that are not legally separate (e.g., departmental reports and reports of individual funds)
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New best practice
Utilizes COSO’s five components to detail steps required to establish a framework for internal controls which allows management to meet its objectives for entity-wide grants management
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New best practice Organized to ensure that governments who
receive grant funds to support their various programs and activities maintain compliance with the various requirements associated with the grant so as not to incur penalty or forfeit grant funding for compliance failures
The GFOA advises governments to create both a grant administrative oversight policy and a grant administrative oversight committee to ensure adherence to grant provisions
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Rewrote this best practice, which was last updated in 2001
Recommends that governments formally adopt financial policies
Provides steps to consider when making effective financial policies including scope, development, design, presentation and review
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New best practice Evaluation of operating impacts from capital
determined that analysis is often deficient in practice
Practitioners are failing to understand the need, not effectively making the argument within their jurisdictions to include it, or lacking the tools and methodologies for calculating or showing the costs
This best practice recommends that governments discuss and quantify the operating impact of capital projects in their budget documents, and ensure that the impacts are identified on an individual project basis
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New best practice
Work with practitioners, researchers, and other education finance experts to identify the best ways for community college institutions to leverage the budget process to align their resources to student outcomes
Funding was provided for this work through a grant from the Bill & Melinda Gates Foundation
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New best practice
Work with practitioners, researchers, and other education finance experts to identify the best ways for PK-12 institutions to leverage the budget process to align their resources to student outcomes
Similarly, funding was provided for this work through a grant from the Bill & Melinda Gates Foundation
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Combine existing best practices Determining the Appropriate Level of Unrestricted Fund Balance in the General Fund and Replenishing General Fund Balance best practices
Recommends that governments establish a formal policy on the level of unrestricted fund balance that should be maintained in the general fund for GAAP and budgetary purposes
Suggests that these guidelines be set by the appropriate policy body
Should articulate a framework and process for changes in the level of unrestricted fund balance over a specific time period
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Updated best practice Alert issuers of the increasing attention of federal
policy makers and investor advocacy organizations on improving disclosure for government bond issuers
Emphasizes specific areas for issuers to make improvements in based on the SEC’s 2014 Municipalities Continuing Disclosure Cooperation Initiative (MCDC)
The GFOA is firmly committed to helping issuers understand and meet their federal continuing disclosure obligations, and have updated this best practice to further that effort
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Updated best practice
Designed to increase issuer awareness of federal regulatory efforts to improve issuer disclosure
Alert issuers of improved use of issuer websites
Identify new features on the Municipal Securities Rulemaking Board’s (MSRB) Electronic Municipal Market Access (EMMA) system, which enable issuers to improve the flow of disclosure information to investors
Advise issuers of concerns using other digital communication platforms (such as social media) to transmit disclosure information to investors
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New best practice Provides guidance to governments about how to select
and manage credit rating agencies Organized to help finance officers navigate the ever
changing landscape of credit rating methodologies Alerts governments to the key factors they should
consider in hiring one or multiple rating agencies The types of debt issues that may benefit from
obtaining a credit rating What an issuer should be prepared to do to maintain a
credit rating Guidance on terminating a relationship with a rating
agency
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Updated Advisory Alert governments to new federal rules impacting the
public sector (such as the new rules issued by the Commodity Futures Trading Commission) that require governments who want to use derivative products to use a Qualified Independent Representative to advise governments on the deal
Strengthen language in the original document cautioning governments on the risks associated with use of these products, and advising governments against entering into derivatives contracts unless they have a level of in house expertise necessary to understand the core aspects and risks of a derivatives transaction
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Updated Advisory
Urges governments to avoid issuing Pension Obligation Bonds
Provides a summary of the risks associated with issuing these products
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Updated best practice
Enumerates the required steps involved in financial risk assessment
Recommends that governments recognize and evaluate risks related to participation in an economic development project before authorizing participation
Suggests that a project should not be undertaken if risks are determined to not be acceptable, and cannot be mitigated
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Updated best practice Designed to bring greater emphasis to comparing
the results of the project to the goals in order to provide more insight on the quality of the decision to authorize the project and to enable organizational learning from the decision
Recommends that governments monitor economic development projects and program performance to ensure objectives established in an economic development policy are accomplished, and ensure that the finance officer plays a central, functional role in these efforts
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New advisory
Potential benefits of government engagement with the private sector to fund capital improvement projects
Cautions governments about the risks of engaging in P3 agreements
Finance officers should be involved throughout the process of a public entity’s consideration of potential P3 opportunities to ensure an understanding of the overall financial implications of a P3 agreement some of whose provisions may not serve the public interest or be detrimental to the government’s long-term financial health
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New Best Practice
Provides thorough guidance to plan administrators, sponsoring entities, and governing bodies on a clear and well-documented governance structure for defined contribution plans
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Provides guidance to public-sector employers and plan administrators as to how to inform and educate employees about future retirement income in the context of the many variables that may compromise retirement benefit adequacy
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New best practice For many local governments, in many regions of
the country, most of these compensation costs are negotiated or collectively bargained, at least in part, with public employee unions
Despite the tremendous fiscal implications of these negotiations, those involved do not always incorporate resource planning information from the finance office
Encourages governments to include their finance officers in the collective bargaining process as part of their financial management strategy
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New best practice
Recommends that public-sector employers and plan administrators inform and educate employees about:
Defined benefit provisions
Social Security benefits
Defined contribution benefits
Developing a comprehensive withdrawal strategy to maximize benefit adequacy
Retiree medical benefits affect on retirement income
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New best practice
Recommends that government investors assess their investment portfolio for performance and risk by comparing the total return of the portfolio to carefully selected benchmarks 35
Updated best practice
Alerts governments concerning new Securities and Exchange Commission rules that regulate the investment policies, organization and structure of money market mutual funds
Recommends that state and local governments restrict their use of mutual funds for cash management purposes exclusively to:
(1) money market mutual funds that are invested in Treasury, federal government agency, or first tier categories and possess the highest ratings available from at least one nationally-recognized ratings agency; and
(2) short-term bond funds that receive the highest credit quality ratings and the lowest risk ratings available
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New best practice
Recommends the process for governments to utilize an independent third-party custodian to safeguard their investments and protect against the risk of fraud or error in an investment transaction
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