Download PDF


Use of Financial Status in the Budget Process (1999) (BUDGET)

Background. The National Advisory Council on State and Local Budgeting (NACSLB) has developed a comprehensive set of recommended budget practices. The recommendations have been endorsed by a number of key governmental associations, by academia and by labor groups associated with state and local government. These practices and the associated framework outline a budget process that encompasses the broad scope of governmental planning and decision-making with regard to the use of resources. This work is recognized as one of the most important advances in governmental finance in decades. The Government Finance Officers Association (GFOA) has adopted a recommended practice endorsing the NACSLB practices and the associated

The NACSLB budget framework and practices recommend that information be made available to all stakeholders and decision-makers during all phases of the budget process. A key component of this information is a description of the financial status of the government entity. The description should include the current financial condition, the impact of the proposed or actual budget, and the future outlook and trends.

The transmittal message of a budget document usually addresses the financial status and direction of the government from a short-term perspective. Long-term issues also need to be identified. Stakeholders should understand the financial implications of the budget.

Recommendation. The GFOA recommends that a component of the budget process be an overall financial status of the governmental entity and of its key funds, including but not limited to an analysis of available financial resources. This brief analysis should discuss the current financial status, the immediate future status, and longterm trends.

The emphasis on this analysis is on understandability of the financial status and issues, not necessarily on exact numbers and detail. This analysis should be provided, at least in written form, early in the process so a broad financial framework is available to stakeholders and decision-makers. The final budget materials should contain an updated status report.



  • Recommended Budget Practices: A Framework for Improved State and Local Government Budgeting, NACSLB, 1998.
  • Recommended Budget Practices CD-ROM, NACSLB, 1998. · Budget Awards Program: Illustrations and Examples of Program Criteria, Juliet Carol Powdar, GFOA, 1999.
  • An Elected Official's Guide to Multi-Year Budgeting, Salomon A. Guajardo, GFOA, 2000.
  • An Elected Official's Guide to Revenue Forecasting, Salomon A. Guajardo and Rowan Miranda, GFOA, 2000.