A financial crisis can take many forms:
- A major local employer lays off much of its workforce.
- Property values plummet due to a shrinking population in the area.
- A natural disaster inflicts significant infrastructure damage.
- A mass-quarantine halts economic activity.
- A cyberattack shuts down online commerce.
Any of these events would likely cause significant financial distress for even the best-prepared local governments. Whether they lead to increased expenditures, decreased revenue, or a combination of both, the effect is the same: the local government finds itself without enough money to do everything that people expect it to get done. GFOA has put together this set of resources to help local government finance officers facing these types of situations. The centerpiece is a 12-step process we call Fiscal First Aid: Recovering from Financial Distress. Use the following diagram to navigate through the different steps of the financial recovery process.
12-Step Fiscal First Aid Recovery Process
- Step 1: Recognition
- Step 2: Mobilize
- Step 3: Generic Treatments
- Step 4: Initial Diagnosis
- Step 5: Near-Term Treatments
- Step 6: Detailed Diagnosis
- Step 7: Recovery Plan
- Step 8: Long-Term Treatments
- Step 9: Long-Term Financial Planning (Updated!)
- Step 10: Recovery Leadership
- Step 11: Manage the Recovery Process (Updated!)
- Step 12: The Outcome of Recovery
- Balancing the Budget in Bad Times: Part 1-Primary Treatment for Reducing Cost and Enhancing Revenues in the Next 12 to 18 Months
- NEW! Balancing the Budget in Bad Times: Part 2-Riskier Treatments for Reducing Cost and Enhancing Revenues in the Next 12 to 18 Months
- Maintaining Treasury Operations During the COVID-19 Crisis
- Working Remotely: A Guide for the Public Sector
- How to Eliminate Paper and Save Time and Money
- Cash is King: Short-Term Strategies to Slow the Flow of Money Out the Door and Keep the Budget Balanced
Economic Indicators Dashboard
- Cybersecurity in Local Government: A Discussion of Enduring Issues and Contemporary COVID-19 Concerns
- Working with Elected Officials During a Financial Crisis
- Decision-Making Under Uncertainty
- New FFA webinars coming soon!
- In the mean time, check out these GFOA Virtual Conference Sessions:
- June 3: We've Always Done it This Way: Process Improvement and the Finance Office
- June 4: What COVID-19 Means for Issuer Disclosure Practices
- June 5: Can't Get Enough: Trust in Government
- June 22: How to Make Technology Work for You in the Treasury Office
- June 22: How Much is Too Much? Policies on Debt Capacity
- June 23: Land Use Planning and Financial Planning
- June 24: Prioritizing Your Values: How to Avoid Slash and Burn in an Economic Downturn
- June 25: Giving Voice to Values: GFOA's Code of Ethics in Action
Click on each webinar to access a recording of the webinar, the PowerPoint presentation, and other supporting materials.
- March 27, 2020. Financial Decision Making Under Uncertainty
- April 1, 2020. Budgeting During a Recession: Principles, Practices, Processes, and Politics
- April 8, 2020. Financial Scenario Planning: Visualizing and Strategizing for Uncertain Times
- April 9, 2020. Take the 2020 Financial Policy Challenge
- April 13, 2020. Procurements Under FEMA Awards During Periods of Emergency or Exigency
- April 15, 2020. Assessing Risks Related to Cyber Crime
- April 24, 2020. Managing Cash Flow in a Crisis: How to Quickly Build a Working Cash Flow Model
- April 30, 2020. Reserves: How Much Can You Use? Evaluating Organizational Risks and Reserves Levels
- May 4, 2020. Fiscal First Aid Treatments and When to Use Them
- May 11, 2020. COVID-19 Forecasting for Finance Officers
- May 14, 2020. Balancing the Budget in Bad Times: Evaluating and Managing Risk in Cutback Budgeting
- May 15, 2020. SEC Statement on COVID-19 Disclosure
In order to get as many good Fiscal First Aid resources to GFOA members as quickly as possible, GFOA is working with private sector firms that have graciously agreed to provide their expertise free of charge. Please be aware that there is no financial relationship between these firms and GFOA. Also, GFOA does not endorse any products or services.
An Elected Official's Guide to Fiscal First Aid and Financial Recovery aims to help public officials navigate through these challenging economic times. The booklet covers three basic stages of financial recovery:
- Bridging - getting through the immediate crisis and creating breathing room to make more sustainable reforms.
- Reform - carrying out the short-term recovery plan and developing and implementing long-term therapies.
- Transform - institutionalization of long-term financial planning and becoming more resistant to financial distress and adaptable to a changing environment.
Related GFOA Resources
- Financial Foundations for Thriving Communities
- Lean Finance Resource Center
- Financial Resilience Resource Center
- GFOA Coronavirus Response Resources
Related Third-Party Resources
- White papers and other materials from Aon
- Government Technology's Coronavirus Resource Guide
- What Works Cities' Local Government Response and Resource Bank
- Navigating COVID-19 Grant Funding Webinar from eCivis and ELGL
For additional questions, comments, or to particpate in GFOA research or training on fiscal first aid, please contact GFOA at email@example.com.
GFOA's Coronavirus Response Resource Page
GFOA's Coronavirus Response Resources reflect the latest guidance and materials on the recently enacted laws passed in response to the coronavirus pandemic. The programs and funding were included in the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Given the fluid nature in the release of guidance and implementation of the various programs, this page will be updated frequently as we strive to provide the most accurate and up-to-date information. Click here to learn more.