Best Practices/Advisories

Best Practices/Advisories

GFOA Best Practices identify specific policies and procedures as contributing to improved government management. It aims to promote and facilitate positive change rather than merely to codify current accepted practice. Partial implementation is encouraged as progress toward a recognized goal.  

GFOA Advisories identify specific policies and procedures necessary to minimize a government’s exposure to potential loss in connection with its financial management activities. It is not to be interpreted as GFOA sanctioning the underlying activity that gives rise to the exposure.

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Managing Market Risk in Investment Portfolios

Best Practice

State and local governments should comply with state statutes pertaining to investing public funds along with all investment policy parameters. Fixed income investing involves a certain level of market risk. Investors should be aware of their risk tolerance and confirm that the market risk they assume is within this tolerance level.

Committee: 
Treasury and Investment Management

Monitoring and Disclosure of Fees for Defined Contribution Plans

Best Practice

GFOA recommends that plan sponsors make sure that DC plan costs are reasonable and appropriate, compared with plans of similar size, structure, and service levels, and that they provide plan participants with meaningful and accessible information about fees and expenses. These policies and practices should ensure that plan sponsors:

Committee: 
Retirement and Benefits Administration

Monitoring the Value of Securities in Repurchase Agreements

Best Practice

Because the investor may need to liquidate the purchased securities in the secondary market in the event the counterparty defaults on the repurchase agreement transaction, GFOA recommends that government entities establish a policy and procedure for monitoring the value of the purchased securities in a repo transactio to insure that it does not

Committee: 
Treasury and Investment Management

Pension Investment Policies

Best Practice

GFOA recommends that state and local entities establish a formal pension investment policy that is approved by the governing board or trustee(s) of the pension plan. A pension investment policy should be viewed as a long-term governing document.

Committee: 
Retirement and Benefits Administration

Purchasing Card Programs

Best Practice

GFOA recommends that governments explore the use of purchasing cards to improve the efficiency of their purchasing procedures. A competitive process should be used to select a purchasing card provider.

Committee: 
Treasury and Investment Management

Role of the Finance Director in Capital Asset Management

Best Practice

GFOA urges state and local government officials to extend the involvement of the finance director through all phases of asset management.   In working to develop sustainable and high performing asset management plans, finance officers should be involved by understanding and providing information to support decisions on:

Committee: 
Economic Development and Capital Planning

Technology in Capital Planning and Management

Best Practice

GFOA recommends that finance officers take an organizational-wide approach to using technology for capital program management.  Use of appropriate technology that can be used by key participants in the process -- in finance, engineering, operations, overall management, and other areas can enhance collaboration and improve management of the capit

Committee: 
Economic Development and Capital Planning

The Role of the Finance Officer in Economic Development

Best Practice

GFOA recommends that the finance officer or budget officer lead or be a key participant in the analysis of the economic and fiscal impacts, as well as the risks and uncertainties, associated with proposed economic development plans, strategies or individual projects.  In addition to roles in project leadership and management, roles that should b

Committee: 
Economic Development and Capital Planning

Use of Derivatives and Structured Investments by State and Local Governments for Non-Pension Fund Investment Portfolios

Advisory

GFOA advises state and local government finance officers to exercise extreme caution in the use of derivatives and structured finance products. Governmental entities must learn about and understand the potential risks and rewards of derivative and structured products, before deciding if they should be used.

Committee: 
Treasury and Investment Management