Financial Policy

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.

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.

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. 

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

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.

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.

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

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

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.