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Check Out GFOA’s Six New Best Practices that were Adopted in January 2012

In January 2012, the Government Finance Officers Association’s Executive Board adopted 2 new Best Practices and revised 4 Best Practices.  The 2 new Best Practices are as follows:

Presentation of the Departmental Section in Operating Budget Document – This document provides guidance to governments on how to meet their programs and services objectives.  The departmental section of a government’s operating budget document should be well defined and well designed to enable to reader to understand the purpose of the governments services and programs along with the cost associated with the programs.

Establishing and Administering an OPEB Trust – This best practice recommends the government create a qualified trust to prefund their OPEB obligations.  Governments should consult with qualified legal counsel to understand the complexities of establishing and administering an OPEB Trust.

The 4 Best Practices that were revised are as follows:

The Public Finance Officers Role in Sustainability – This best practice offers tasks that government finance personnel can assume to support sustainability.

Expenses Charged by Underwriters in Negotiated Sales – There is a new Governmental Accounting Standards Board (GASB) fee that will be assessed on dealer firms relating to bond issuances.  This best practice recommends bond issuers have an agreement with the underwriter for direct and indirect expenses charged during a bond sale.  The agreement should clearly state that the issuer will not pay the new GASB fee.

Managing Build America and other Direct Subsidy Bonds – There are ongoing responsibilities with the Build America and other Direct Subsidy Bond issues.  This best practice provides guidance regarding the post-sale responsibilities relating to IRS requirements and subsidy timely payments.

Using Mutual Funds for Cash Management Purposes – This best practice reminds management to be vigilant about reviewing/monitoring their investment portfolio regarding specific mutual fund holdings.  A government should develop a policy relating to the appropriate levels of short and intermediate term holdings.

More information regarding the Government Finance Officers Association best practices can be found at www.gfoa.org.

By Marilyn Mays, CPA