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Best Practices/Advisories

Note: GFOA is currently making changes to the website related to how best practices are displayed. During this transition, some best practices may not appear below.  All work should be complete by Tuesday, May 16.  If you have any questions or need help finding a best practice, please contact Mike Mucha.

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.  

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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Accurately Displaying Total Expenditures in Budget Presentations (Budget Consolidation)

Best Practice

GFOA recommends that governments ensure that their entity-wide budget totals reflect real economic activity and that material double-counting does not occur. To safeguard against double counting, governments should observe the following factors:

Committee: 
Governmental Budgeting and Fiscal Policy

Audit Committees

Best Practice

GFOA makes the following recommendations regarding the establishment of audit committees by state and local governments:

Committee: 
Accounting, Auditing, and Financial Reporting

Bank Loans

Best Practice

GFOA recommends that governments considering the possibility of entering into bank loans should develop policies and procedures related to these debt obligations.

Committee: 
Governmental Debt Management

Business Preparedness and Continuity Guidelines

Best Practice

GFOA recommends that governments develop, test, and maintain a plan to continue their basic business operations during and immediately after disruptive events. Governments must be able to anticipate problems, detect threats and determine effective protective actions to enable them to continue to function.

Committee: 
Governmental Budgeting and Fiscal Policy
Governmental Debt Management

Capital Asset Management

Best Practice

GFOA recommends that local, state and provincial governments establish a system for assessing their capital assets and then appropriately plan and budget for any capital maintenance and replacement needs. This recommendation includes:

Committee: 
Economic Development and Capital Planning

Capital Planning Policies

Best Practice

GFOA recommends that governments develop and adopt capital planning policies that take into account their unique organizational characteristics including the services they provide, how they are structured, and their external environment. 

Committee: 
Economic Development and Capital Planning

Cash Flow Analysis

Best Practice

GFOA recommends that governments perform ongoing cash flow analysis to ensure that they have sufficient cash liquidity to meet disbursement requirements and limit idle cash. When conducting a cash flow analysis governments should:

Committee: 
Treasury and Investment Management

Collateralizing Public Deposits

Best Practice

GFOA recommends the use of a written agreement with pledging requirements as protection for state or local government's deposits. GFOA encourages governmental entities to establish adequate and efficient administrative systems to monitor such pledged collateral, including state or locally administered collateral pledging or collateral pools.

Committee: 
Treasury and Investment Management

Commission Recapture Programs

Advisory

A pension plan should first determine whether a commission recapture program will actually produce lower costs overall. If the pension plan’s board of trustees decides to have such a program, or if it is required by law, GFOA recommends the following guidelines for proper administration.

Committee: 
Retirement and Benefits Administration

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