Advisories

Begin dis­cus­sions, iden­ti­fy all poten­tial fidu­cia­ry activ­i­ties, iden­ti­fy types of fidu­cia­ry funds, deter­mine when to rec­og­nize a fidu­cia­ry fund lia­bil­i­ty, and apply the Stan­dard retroac­tive­ly and pre­pare the disclosures.

Iden­ti­fy, locate, review, assess, and com­mu­ni­cate var­i­ous aspects rel­e­vant to agree­ments, leas­es, and contracts. 

The gov­ern­ment should feel free to use audit­ed finan­cial state­ments as appro­pri­ate, should not per­mit audi­tors to cre­ate an arti­fi­cial ​“involve­ment”, take steps to avoid unwar­rant­ed delays and costs, and clar­i­fy pub­lish­ing per­mis­sion with­in audit contract 

Assets, lia­bil­i­ties, income and expens­es relat­ed to secu­ri­ties lend­ing trans­ac­tions should be report­ed in the finan­cial state­ments in the man­ner that best reflects the true nature of these trans­ac­tions, con­sis­tent with the pro­vi­sions of GASB State­ment No. 28. 

Gov­ern­ments should main­tain sep­a­rate infor­ma­tion on each legal­ly man­dat­ed spe­cial rev­enue sys­tem and pro­vide sched­ules for each legal­ly man­dat­ed spe­cial rev­enue fund. 

Gov­ern­ments con­tem­plat­ing the sale or secu­ri­ti­za­tion of prop­er­ty tax liens should under­take a care­ful analy­sis of ben­e­fits and risks both in the cur­rent fis­cal year and over the long-term.

Issuers should not include under­writer dis­claimer lan­guage in offi­cial statements.

Gov­ern­ments who plan to issue vari­able rate debt should exer­cise cau­tion and care­ful­ly eval­u­ate their objec­tives. Gov­ern­ments should con­sid­er how this debt, and the var­i­ous risks asso­ci­at­ed with it, will be man­aged over the long term. 

State and local gov­ern­ments should exer­cise cau­tion in the use of deriv­a­tive instruments.

GFOA rec­om­mends that gov­ern­ments put safe­guards and inter­nal con­trols in place to mit­i­gate the risk of fraud­u­lent ven­dor pay­ment activity.

State and local gov­ern­ments should exer­cise extreme cau­tion when con­sid­er­ing whether to offer a bro­ker­age win­dow option in con­junc­tion with a defined con­tri­bu­tion retire­ment plan. 

A pen­sion plan should first deter­mine whether a com­mis­sion recap­ture pro­gram will actu­al­ly pro­duce low­er costs overall. 

Gov­ern­ment defined ben­e­fit plans should not include deferred retire­ment option pro­grams for a vari­ety of reasons.

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.

State and local gov­ern­ments should not issue OPEB bonds for a vari­ety of reasons. 

State and local gov­ern­ments should not issue POBs.

Under no cir­cum­stance should state and local gov­ern­ment plan spon­sors engage in pen­sion con­tri­bu­tion hol­i­days or make insuf­fi­cient contributions. 

State and local gov­ern­ments should not use ERIs for a vari­ety of reasons. 

GFOA rec­om­mends that gov­ern­ments put safe­guards and inter­nal con­trols in place to mit­i­gate the risk of fraud­u­lent ven­dor pay­ment activity.

Before decid­ing to pur­sue or enter into a P3 agree­ment, the pub­lic enti­ty should care­ful­ly ana­lyze the poten­tial P3 agree­ment, includ­ing all finan­cial impacts.