Financial Policy

• Best Practices

  Adopt­ing Finan­cial Policies

  Gov­ern­ments should for­mal­ly adopt finan­cial poli­cies. Steps to con­sid­er when mak­ing effec­tive finan­cial poli­cies include (1) scope, (2) devel­op­ment, (3) design, (4) pre­sen­ta­tion, and (5) review.

Budgeting

• Best Practices

  Fund Bal­ance Guide­lines for the Gen­er­al Fund

  Gov­ern­ments should estab­lish a for­mal pol­i­cy on the lev­el of unre­strict­ed fund bal­ance that should be main­tained in the gen­er­al fund for GAAP and bud­getary purposes. 

Capital Planning

• Best Practices

  Cap­i­tal Plan­ning Policies

  Gov­ern­ments should 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. 

• Best Practices

  Invest­ment Policy

  GFOA rec­om­mends that all gov­ern­ments estab­lish and have its gov­ern­ing board adopt an invest­ment policy.

• Best Practices

  Rev­enue Con­trol Policy

  GFOA rec­om­mends gov­ern­ments estab­lish a rev­enue con­trol and man­age­ment pol­i­cy and review it on an annu­al basis. This pol­i­cy should be cus­tomized for the size and resources of the government.

• Best Practices

  Invest­ment Poli­cies for Defined Ben­e­fit Plans

  Defined ben­e­fit plans should estab­lish and adhere to a for­mal invest­ment pol­i­cy to reg­u­late and mon­i­tor the system’s invest­ment pro­gram. Such pol­i­cy should be viewed as a long-term gov­ern­ing document.

• Best Practices

  Post-Issuance Poli­cies and Procedures

  Issuers of bonds or oth­er debt oblig­a­tions should 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.

• Best Practices

  Pri­ma­ry Mar­ket Disclosure

  Issuers should estab­lish clear poli­cies and pro­ce­dures for com­pil­ing infor­ma­tion before issu­ing debt.

• Best Practices

  Estab­lish­ing an Effec­tive Grants Policy

  Gov­ern­ments should devel­op a for­mal grants pol­i­cy and that such a pol­i­cy should address steps to take pri­or to apply­ing for or accept­ing grants. 

• Advisories

  Account­ing and Finan­cial Report­ing for Fidu­cia­ry Activities

  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.