Risk Assessment

Calculated Risk

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Reserves are crucial for a government’s fiscal stability, especially when facing increasing uncertainties. Risk management for local government, therefore, necessitates a thorough assessment of the appropriate reserve levels. This article presents a risk-based reserve framework developed by GFOA to assist local governments in determining the appropriate level of reserves required based on their risk exposure. A case study of the Goleta Water District (GWD) is included to illustrate the application of this framework.


  • Publication date: August 2025
  • Author: Thao Pham
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