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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Use of Lockbox Services

Best Practice

GFOA recommends that governments evaluate the benefits and costs of using lockbox services to determine if advantages can be gained in the areas of accuracy, cash flow, internal controls, and efficiency.

Committee: 
Treasury and Investment Management

Using Commercial Paper in Investment Portfolios

Advisory

GFOA recommends that if a government chooses to use CP in its investment portfolio, it cautions government investors to: 1) verify whether commercial paper is allowed under state statute and their investment policy and 2) determine whether they have the expertise to understand, evaluate and monitor commercial paper before deciding to include com

Committee: 
Treasury and Investment Management

Using Electronic Signatures

Best Practice

GFOA recommends that state and local governments continue to improve electronic access to their services and information by other government entities and the public. When the identity of contact and/or the contents of the information received must be authenticated, the use of a secure form of electronic signatures is encouraged.

Committee: 
Treasury and Investment Management

Using Mutual Funds for Cash Management Purposes

Best Practice

The GFOA recommends that state and local governments restrict their use of mutual funds for cash management purposes exclusively to: (1) money market mutual funds that are invested in Treasury, federal government agency, or first tier categories and possess the highest ratings available from at least one nationally-recognized ratings agency and (2) short-term bond funds that receive the highest credit quality ratings and the lowest risk ratings available.

Committee: 
Treasury and Investment Management

Appropriate Level of Unrestricted Fund Balance in the General Fund

Best Practice

GFOA recommends that governments establish a formal policy on the level of unrestricted fund balance that should be maintained in the general fund for GAAP and budgetary purposes.3 Such a guideline should be set by the appropriate policy body and articulate a framework and process for h

Committee: 
Accounting, Auditing, and Financial Reporting
Governmental Budgeting and Fiscal Policy

Effective Budgeting of Salary and Wages

Best Practice

GFOA encourages every government to consider forecasting procedures that would result in more accurate expenditure projections, especially as they relate to personnel. The items shown below provide governments with the areas in which they should consider adopting practices to more effectively budget salary and wages.

Committee: 
Governmental Budgeting and Fiscal Policy

Performance Management

Best Practice

The purpose of public-sector performance management (shown throughout the commission’s report) is to provide a systematic approach to managing performance through concepts, practices and processes that align governments’ efforts to achieve the best possible results for the public within available resources.  Performance management emphasizes the

Committee: 
Governmental Budgeting and Fiscal Policy

Examining the Benefits of Managed Competition

Best Practice

GFOA recommends that governments systematically identify and evaluate the major factors in considering a managed competition option. Service level, cost, efficiency, effectiveness, quality, customer service, and the ability to monitor the service provider’s work should be essential components of any managed competition decision.

Committee: 
Governmental Budgeting and Fiscal Policy

Public Participation in Planning, Budgeting, and Performance Management

Best Practice

GFOA recommends that governments incorporate public participation efforts in planning, budgeting, and performance management results processes. GFOA also recommends that to ensure effective and well implemented public participation processes, governments include the following considerations in designing their efforts:

Committee: 
Governmental Budgeting and Fiscal Policy

Inflationary Indices in Budgeting

Best Practice

GFOA encourages every government to consider using the inflation indices that work best as a predictor. This may mean the use of different indices depending on the expenditure category. The government should define the purpose for using an inflationary index and then select the appropriate index.

Committee: 
Governmental Budgeting and Fiscal Policy