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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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

Debt Issuance Transaction Costs

Best Practice

GFOA recommends that finance officers be aware of the parties likely and necessary to be involved in the transactions and be prepared to select these parties in a manner that ensures that needed services are obtained at a fair and reasonable cost.  Additionally, an issuer should carefully review all invoices to ensure that an expense is not billed to multiple parties.

Committee: 
Governmental Debt Management

Public-Private Partnerships (P3)

Advisory

Organizations, and especially the finance officer, must understand what is at stake and make informed, strategic decisions on whether or not to pursue P3 opportunities. Finance officers should be involved throughout the process of a public entity’s consideration of potential P3 opportunities.

Committee: 
Economic Development and Capital Planning

Refunding Municipal Bonds

Best Practice

The Government Finance Officers Association (GFOA) recommends that issuers include guidelines in their debt management policies that address preservation of future refunding flexibility when issuing any debt, formal refunding objectives, and monitoring of refunding opportunities on outstanding debt.

Committee: 
Governmental Debt Management

Understanding Pension Fund Investment Risk

Best Practice

GFOA endorses the report developed jointly by the Association of Public Pension Fund Auditors and selected chief investment officers of public pension funds, entitled "Public Pension Systems: Statements of Key Investment Risks and Common Methods to Address those Risks." By reviewing this report, governing and managing fiduciaries responsible for

Committee: 
Retirement and Benefits Administration

Governance of Public Employee Postretirement Benefits Systems

Best Practice

GFOA recommends that the state or local government or other designated governing entity establish rules of governance for its post-retirement benefit systems that define the key elements necessary for trustees and other fiduciaries to fulfill their responsibilities, in accordance with fiduciary standards.

Committee: 
Retirement and Benefits Administration

Investment Fee Policies for Retirement Systems

Best Practice

To minimize the impact of investment management fees on portfolio returns, the GFOA developed this best practice, which recommends that retirement systems, especially those that use alternative investment strategies, adopt an investment management fee policy that will allow the retirement system to negotiate the lowest competitive fee possible while looking out for the system's long-term earning potential. The best practice also provides recommendations to governments about strategies to reduce investment fees.

Committee: 
Retirement and Benefits Administration