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Awarding Excellence in Public Finance.

The term "best practice" is a contemporary buzzword in public finance, as well as within the entire realm of businesses and organizations. Governments and businesses everywhere want to learn about best practices, use them, and in some cases, institutionalize and automate them. But precisely what does the term best practice infer and what are its implications for government?

The GFOA has a long history of being an information clearinghouse for public financial management. In fact, this is one of our stated roles--to "enhance and promote the professional management of government financial resources by identifying, developing and advancing fiscal strategies, policies and practices for the public benefit." The development of recommended practices is one of the best ways that GFOA has for raising the standards of the public finance profession and improving the financial management of state and local government. GFOA's standing committees in specific topical areas are charged with the task of developing these recommended practices within their areas of expertise.

Recommended practices are ideas that have been tested and are appropriate for many different entities. They are based on actual applications from the real world of public finance, meaning that the collective knowledge of those with extensive and diverse experience has resulted in their formulation. Each recommended practice is designed to identify enhanced techniques and furnish information about effective strategies for state and local government practitioners.

By contrast, this issue of Government Finance Review focuses on best practices. Unlike recommended practices, best practices have not yet been proven on a large-scale. They generally are considered more experimental and recognize the latest innovations in the field.

GFOA's Awards for Excellence in Government Finance Program recognizes these best practices in the field of government finance. The awards are chosen by independent chief financial officers and technology experts and recognize contributions to the practice of government finance that exemplify outstanding financial management. The award criteria stresses practical, documented work that offers leadership to the profession and promotes improved public finance. The main factors that judges are asked to consider when selecting award winners are innovation and replicability.

All of the winning jurisdictions demonstrated an ability to think outside the box, take risks, and go well beyond what is normally expected in public service to benefit public management as a whole. Moreover, they did so in a manner that other governments can replicate. Their successes are best practices within their own jurisdictions and offer exciting opportunities for other jurisdictions, as well.

For its winning entry, the City of Scottsdale submitted its "Economic and Financial Trend Analysis," which was prepared by their accounting and budget staff. The analysis combines key trends along with a status summary on city financial policies each fall and is tied in with the Comprehensive Annual Financial Report (CAFR). The Trend Analysis is presented in a citizen-friendly format and is openly distributed to stakeholders and discussed with management and city council as part of the budget process. This program boasts two critical improvements to the status quo. First, it is now a regular and standard discussion point with the city council and credit rating agencies. Second, the policies of the City of Scottsdale are integrated with the trend analysis. The Scottsdale project can be easily adapted for use in other organizations, both large and small. Many of the indicators are common to most jurisdictions, while others can be changed, added, or deleted, depending upon the importance to the specific organiz ation. For example, tourism is an important industry in Scottsdale and therefore is included, but it could easily be replaced with a more appropriate indicator in areas where tourism is not as much of a factor.

For its winning entry, the City of Portland, Oregon's Office of Finance and Administration implemented an automated publishing system for the preparation and publication of city budget documents. This system, now called OFA Publisher by Portland, produced the FY 1999-00 budget documents, both in print and on the Internet. OFA Publisher is designed to organize all the disparate elements of a budget document into one database and automatically publish that information through the use of predefined data queries and document templates. Developed through a collaborative effort by a vendor and the city, the system is specifically designed to be used by other organizations. During product specification, development, and testing, both the vendor and the City of Portland focused on creating a transferable, modular product that could be used by any government agency to publish financial documents of any sort. The only requirement is a well-defined and implemented chart of accounts. The City of Portland pursued a delib erate strategy of developing a document publishing system in beta fashion with a private-sector vendor who would be able to market the product to other jurisdictions. This was done both as a contribution to the field of public finance, but also to ensure that Portland would receive the benefits of ongoing product development, customer testing and debugging, and additional features over time.

For its entry, Sonoma County, California, developed and managed an Internet database program that connects the 58 statewide county auditor-controllers with more than 1,000 governmental accountants and finance officers. Developed at a minimal cost, county auditors gain an Internet presence by completing 10 fields of a simple entry form. Personal county pages are created via uploads in minutes and at no cost to the counties. The site is simple to administer, and is changed by adding, modifying, and deleting Access database records. During implementation, the State Association of County Auditors trained one person in each of the 58 counties to use the system. Each county then entered their own records in the database, and accepted responsibility for maintaining their, information. Sonoma County's assistant auditor-controller spends only four hours a week maintaining the overall system. Without modification, another state's association of county auditors could use this system to help them resolve similar communi cations challenges.

In its submission, the City of San Diego implemented a program called Zero-Based Management Reviews (ZBMR). The program provides for regular programmatic reviews of all city operations every five years using volunteer citizen review teams who work with city employees. These citizen volunteers are either active or retired executives from the local business community. The purpose of ZBMR is to ascertain if certain city functions are 1) within the scope of the city goals and purposes; 2) should be done at all; 3) should be done the way that they are currently being done; and 4) should be done where they are currently being done. This program also can be adapted for use by other organizations. All that is needed are program champions, an external program coordinator, citizen volunteers, and the internal willingness and commitment to recognize the volunteers, establish a process, and follow up as appropriate.

The common denominator in each of these award winners is their innovation, their ability to address a specific opportunity for improvement, and their replicability elsewhere. One of the main purposes of the Awards for Excellence program is to disseminate important information. Public finance is a profession in which members share ideas and insights. Unlike some private-sector professions, there is not the same level of competition that creates an unwillingness to share information. Jurisdictions submit their entries on the condition that they will come to the annual conference to answer questions on their programs.

This issue of Government Finance Review contains ideas of best practices in different areas of public finance. We welcome the submission of articles on innovations by your jurisdictions in future issues.

JEFFREY L. ESSER is Executive Director of the Government Finance Officers Association.
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Author:Esser, Jeffrey L.
Publication:Government Finance Review
Geographic Code:1USA
Date:Apr 1, 2000
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