Budgeting

Adopt rigorous policies, for all operating funds, aimed at achieving and maintaining a structurally balanced budget

GFOA recommends that local governments adopt a policy that identifies user fees and sets strategy.

Governments should formally adopt financial policies.  Steps to consider when making effective financial policies include (1) scope, (2) development, (3) design, (4) presentation, and (5) review.

Governments should establish a formal policy on the level of unrestricted fund balance that should be maintained in the general fund for GAAP and budgetary purposes.

Local governments should adopt a target amount of working capital to maintain in each of their enterprise funds. Additionally, governments should use working capital as the measure of available margin or buffer in enterprise funds.

GFOA recommends that governments engage in strategic planning to provide a vision for the future that can be used to align budgeting with organizational priorities.

GFOA recommends that finance officers take an active role in their governments' efforts to think and act sustainably.

Governments should develop a formal grants policy and that such a policy should address steps to take prior to applying for or accepting grants.

Governments should use charges and fees as a method of financing governmental goods and services.

When considering an internal service pricing system, governments should identify goals of internal service pricing; develop allocation strategy; define level of costing detail; determine cost of service; decide basis of allocation; and consider potential drawbacks.

Governments should carefully analyze all aspects of a service delivery option, including levels of service, service quality and expected performance, service revenues and costs, required transition activities and other relevant factors before changing service delivery methods.

GFOA recommends that governments should determine a baseline budget that calculates the full salary and benefit cost of all approved and budgeted positions and then adjust the baseline for all factors that may impact personnel budget costs.

Governments using a budgetary basis of accounting should understand the common differences between GAAP and the budgetary basis of accounting.

Every government should consider forecasting procedures that would result in more accurate expenditure projections, especially as they relate to personnel.

Governments should encourage effective and well implemented public engagement budget processes.

Jurisdictions should make use of the finance officer’s expertise throughout the collective bargaining process, and the finance officer should participate in a variety of ways.

Governments need to closely monitor health-care costs and choose approaches that make use of the jurisdiction's purchasing power, share costs appropriately, encourage good consumer behavior, promote health, and support governmental jurisdictions' ability to hire and retain a highly qualified and motivated workforce.

Establish a formal set of processes for comparing budget to actual results.

All government should identify, track, and communicate performance measures.

Governments should ensure that their entity-wide budget totals reflect real economic activity and that material double-counting does not occur, and to safeguard against double counting.

Governments should incorporate a number of appropriate guidelines when presenting its capital budget.

Governments should consider appropriate guidelines when presenting information in the departmental section of the operating budget document.

GFOA recommends that governments strive for broader consumption and greater comprehension of the budget document.

Governments should improve the quality of the statistical/supplemental section of their budget documents by ensuring the relevance of data, organizing information by major category, and provide explanations.