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October 4 Board-Approved Best Practices

Below are summaries of the best practices approved by the GFOA’s Executive Board on October 4 and listed by the committee in which they originated, as well as links to the full text of each of the best practices.  

Committee on Governmental Budgeting and Fiscal Policy
  1. Strategies for Managing Health-Care Costs (new) –This new best practice, a joint product of the CORBA and BUDGET committees, recommends strategies for  managing employee health-care benefit costs more effectively.  These strategies include making use of the jurisdiction’s purchasing power, cost sharing with employees, encouraging good consumer behavior and promoting health.

Committee on Accounting, Auditing and Financial Reporting
  1. Including Management’s Discussion and Analysis in Departmental Reports (updated) – Last updated nine years ago, this updated best practice provides recommendations about the need to ensure that Management’s Discussion and Analysis is presented voluntarily and in conjunction with departmental reports, and that their contents be closely modeled on the requirements set forth in GASB Statement No. 34.  
  2. Governmental Accounting, Auditing, and Financial Reporting Practices (updated) – Last updated in 2006, this revised best practice is designed to continue GFOA’s longstanding commitment to providing guidance to governments in developing financial reports that meet the highest standards of transparency and reliability in accordance with generally accepted accounting principles (GAAP).  
  3. Grants Administration (new) – Recognizing that many governments utilize federal and private grant resources to fund various projects and initiatives, this new best practice is intended to provide governments with an awareness about the many compliance and administration requirements of public and private grants, ensure that these requirements are met, and understand the consequences of failing to meet them.  


Committee on Economic Development and Capital Planning

  1. Communicating Capital Improvement Strategies – This new best practice provides recommendations to governments on strategies to develop a communications plan for public participation in capital improvement projects.  
  2. Evaluating and Managing Economic Development Incentives – This new best practice replaces the 2010 Analyzing the Benefits of Economic Development Incentives and Balancing the Costs and Benefits of Economic Development Incentives best practices and the 2009 Analyzing the Costs of Economic Development Incentives best practice.  The new document recommends that governments examine the specific benefits and costs associated with economic development projects, programs, and policies, and ensure that such an examination includes a comprehensive analysis of the assumptions, cost/benefit elements and methodologies being used.  
  3. Performance Criteria as a Part of Development Agreements (new) – This new best practice is intended to provide guidance to governments about the need to incorporate performance criteria into economic development incentives to ensure that stated economic goals are met.  
  4. Creation, Implementation and Evaluation of Tax Increment Districts (new) – This best practice replaces the 2006 Tax Increment Financing as a Fiscal Tool, and is designed to help governments evaluate whether or not TIF and TIF districts are the most appropriate and effective tool to assist governments in their economic development plans.  


Committee on Retirement and Benefits Administration

  1. Core Elements of a Pension Funding Policy (new) – This best practice is the second in a series addressing the funding of defined benefit pension plans, and offers guidance on how a comprehensive state or local government pension funding policy should address three core elements:  actuarial cost method; asset smoothing method and amortization policy.  


Committee on Governmental Debt Management

  1. Investment of Bond Proceeds (updated) – Updated from 2007, this best practice is revised to reflect current market conditions, and the need to highlight the importance of internal procedures.  
  2. Understanding Bank Loans (new) – Due to their increased use in our market, the Debt Committee developed this best practice to provide guidance to governments about the many factors to consider in contemplating use of a bank loan, as well as the importance of implementing appropriate disclosure policies when bank loans are used.   


Committee on Treasury and Investment Management

  1. Accepting Merchant Cards and Electronic Checks (updated) – Updated from its 2009 predecessor, this best practice was revised to help governments evaluate whether accepting merchant cards and electronic checks as a payment option is reasonable and appropriate for the type of charges or fees being paid, and the level of customer service desired.
  2. Bank & Treasury Management Provider Ongoing Due Diligence (new) – As part of the ongoing due diligence and prudent management of relationships, this best practice recommends that government treasury practitioners review the regulated banks, regulated and non-regulated bank partners, and non-bank companies that process, validate, transfer, disburse and “hold on deposit” cash and near cash assets and apply prudent due diligence throughout the life of the relationship.
  3. Purchasing Card Programs (updated) – Updated from 2011, this best practice is intended to provide a summary of the benefits and disadvantages of using purchasing cards, as well as issue recommendations for governments to explore the use of purchasing cards to improve the efficiency of their purchasing procedures, and implement a competitive process to select a purchasing card provider.