GFOA Executive Board Approves Best Practices and AdvisoriesAt its October 26, 2012, meeting, the GFOA Executive Board approved 10 new and revised best practices and advisories, which were developed by the GFOA’s Standing Committees. Following is a brief discussion of each and a link to the document.
Accounting, Auditing, and Financial Reporting
Advisory: Demonstrating Legal Compliance as a Result of GASB Statement No. 54 was developed to help governments understand legal compliance and GAAP considerations when certain activities accounted as “special revenue funds” have to conform to GAAP.
The Improving the Effectiveness of Fund Accounting best practice recommends that governments using fund accounting should establish clear criteria for determining whether a given fund should be treated as a fund for external reporting funding purposes.
The Debt Management Policy best practice was revised to bring the document up to date and to reflect current market conditions and issuer practices. These revisions include a specific point about using a financial advisor, along with information about variable rate debt and understanding legal and public policy considerations when issuing debt.
Including Disclosures in Official Statements Related to Pension Funding Obligations discusses the type and amount of information on pension funding obligations that governments should include in their official statement – especially if these obligations impede debt service payments – and makes specific recommendations.
The Issuing Taxable Debt advisory, which had not been updated in 14 years, was changed to bring the document into the 21st century with applicable taxable products now seen in the marketplace, along with legal compliance issues and the special considerations for issuing taxable rather than tax-exempt debt.
Retirement and Benefit Administration
Monitoring and Disclosure of Fees for Defined Contribution Plans was revised to help defined contribution plan sponsors better understand plan costs and to develop appropriate processes for ensuring that costs are reasonable and appropriate, and that fee information and expenses is accessible to plan participants.
Procuring Actuarial Services was developed to help governments with hiring actuarial services for their public retirement plans.
Treasury and Investment Management
Information was added to the Bank Account Fraud Prevention best practice to better explain considerations and help governments develop appropriate procedures to avoid bank account fraud.
Creating a Revenue Control and Management Policy, a revised best practice, aims to help governments develop a general revenue control and management policy, including billing and collection practices, acceptable methods of payment, and depositing received funds.
Government Relationships with Securities Dealers was revised to reflect current practices and better assist governments with developing criteria when selecting securities dealers, and with the ongoing management of these relationships.