GFOA Approves New Best Practices

Thursday, October 5, 2017

(Chicago, Illinois – October 4, 2017) Government Finance Officers Association’s (GFOA) Executive Board recently approved seven best practices and advisories in the areas of treasury and investment management, retirement and benefits, municipal debt disclosure and economic development. GFOA best practices identify specific policies and procedures that contribute to improved government management. They aim to promote and facilitate positive change rather than merely to codify current accepted practice.

New and revised best practices include:

  • Primary Market Disclosure recommends that issuers establish clear policies and procedures for compiling information before issuing debt. Issuers are to carefully consider information that may be material to investors when compiling primary market information.
  • Post-Issuance Policies and Procedures recommends issuers of bonds or other debt obligations develop and adopt formal, written post-issuance compliance policies and procedures to assist in meeting compliance requirements and in preventing, identifying, and correcting possible violations that might occur during the term that bonds are outstanding, recommending issuers of bonds or other debt obligations develop and adopt formal, written post-issuance compliance policies and procedures to assist in meeting compliance requirements and in preventing, identifying, and correcting possible violations that might occur during the term that bonds are outstanding.
  • Electronic Vendor Fraud Advisory recommends that governments put safeguards and internal controls in place to mitigate the risk of fraudulent vendor payment activity.
  • Investment Policies for Defined Benefit Plans recommends that defined benefit plans establish and adhere to a formal investment policy to regulate and monitor the system’s investment program. Such a policy should be viewed as a long-term governing document. The formal investment policy should be adopted by the governing board(s) and should be reviewed at least annually and updated as deemed appropriate.
  • Investment Policies for Tax-Deferred Retirement Savings Plans recommends that the governing bodies of the tax deferred retirement savings plans establish and adhere to a formal investment policy governing the selection and monitoring of investments made available by the plan. Such a policy should be viewed as a long-term governing document and should be reviewed at least annually and updated as deemed appropriate.
  • Economic Development Incentive Policies recommends that jurisdictions create a policy on the appropriate parameters for use of economic development incentives. An economic development incentive policy needs to be specific enough to establish clear boundaries but not overly restrictive in order to allow for flexibility and discretion to ensure that the policy serves the best interest of a jurisdiction.  
  • Negotiating Economic Development Agreements recommends governments develop and pursue a clear negotiating strategy when working with third-party developers on an economic development project and that the finance department/officer should always be represented on the negotiating team.

These practices should be proactive steps that a government should be taking and are applicable to all governments (both large and small). The best practices are developed by GFOA Standing Committees, made up of members recognized by their peers as leaders in the public finance field, approved by GFOA’s Executive Board, and represent the official position of GFOA. 

GFOA’s suite of best practices are complimentary and available at www.gfoa.org/bestpractices

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