Financial policies provide guidelines for financial decision making and set the strategic intent for financial management and are central to a strategic, long-term approach to financial management. Some of the most powerful arguments in favor of adopting formal written policies include their ability to help governments:
- Institutionalize good financial management practices
- Clarify strategic intent for financial management
- Define boundaries
- Support good bond ratings
- Promote long-term strategic thinking
- Manage risks to financial condition
- Comply with established public management best practices.
Recent GFOA surveys show that in some critical areas of public finance, less than 50% of governments have adopted policies. To encourage more governments to adopt financial policies that guide decision making, and to develop a resource that allows all governments to improve the quality of their own financial policies, GFOA is hosting a Financial Policy Challenge.
What is the 2020 Financial Policy Challenge?
It is a GFOA-wide effort to encourage members to adopt and share financial policies that are essential to a strong financial foundation.
Why is GFOA doing this?
Our surveys show that significant portions of the GFOA membership do not have some of the policies that GFOA considers critical. For example, only about half of GFOA member have a one-time revenue policy. We want to make these policies much more common. Also, the Challenge is a pilot test for a number of concepts that GFOA might like to use for member engagement in the future.
What policies are the subject of the challenge?
The following are the core policies for the challenge:
- Capital Planning
- Structurally balanced budget
- Debt (focused on affordability)
- Long-term forecasting and planning
- Reserves (fund balance or working capital)
- One-time revenues
- User fees
- Economic development
Are those the only policies that are part of the challenge?
No. GFOA will collect examples of other types of financial policies. If your government has any new policies that address current challenges or other issues that the policies above don’t cover, we are interested!
How can I submit my policies for the challenge?
Policies can be submitted electronically using the webform below. To enter, simply complete the form by providing sample policies in each of the policy areas listed above and answering questions related to the policies. Similarly, you can submit policies in alternate categories. There is no charge to participate in the financial policy challenge and the challenge is open to all governments.