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Who makes GFOA policy and positions?

The Annual Winter Meeting for GFOA Standing Committees held in Washington, DC, on January 26 and 27, 1993, marked the start of 1993's committee and policy process. By the time GFOA members vote on policies at the 1993 annual conference in Vancouver, British Columbia, some members may wonder where these policies came from and what effect their passage will have on the association and its members. The role of GFOA's standing committees in this process and the policy process itself is neither as mysterious nor as complex as it sometimes seems, and it provides many opportunities for participation by all GFOA members.

The formal policy process begins with the five GFOA Standing Committees, which are organized by subject matter.

Accounting, Auditing and Financial Reporting (CAAFR)

The CAAFR is responsible for monitoring developments involving all aspects of accounting, auditing and financial reporting for state and local governments. In doing so, the committee represents the GFOA's positions on current issues to a variety of standard-setting groups (e.g., the Governmental Accounting Standards Board, the American Institute of Certified Public Accountants, the U.S. General Accounting Office, the U.S. Office of Management and Budget). In addition, the committee takes a proactive role in suggesting policies to improve the overall quality of accounting, auditing and financial reporting in the public sector.

Cash Management (Cash)

The Cash committee concentrates on activities concerning all aspects of cash availability and investments. This includes issues such as the receipt and custody of cash and securities, relationships with financial institutions, cash budgeting and forecasting, short-term borrowing practices and investment practices.

Governmental Budgeting and Management (Budget)

Issues of concern to the Budget committee include the budget practices of jurisdictions; the planning, integration, passage and execution of budgets; financial planning, services and operations; long-range capital budgeting; and cost implications to budgets resulting from federal policy changes and other actions. The committee also oversees the Distinguished Budget Presentation Awards Program.

Governmental Debt and Fiscal Policy (Debt)

The Debt committee's charge is to promote sound financial health for state and local units of government by developing and advancing financial guidelines, policies and practices and by strengthening the partnership among all levels of government. Financing capital outlays through the use of long-term debt and the integration of debt management with federal initiatives such as arbitrage restrictions, infrastructure renewal, etc., are central concerns of this committee.

Retirement and Benefits Administration (CORBA)

CORBA's areas of responsibilities include public employee benefits with emphasis on retirement and health care issues. Of specific interest is the effect of federal policies on the delivery of benefits and on the investment of retirement system assets. In order to foster improved practices in state and local government retirement system administration, CORBA consults on GFOA's pension training sessions and publications.

Each committee consists of 25 members, up to five advisors and several ex-officio GFOA Executive Board members. The process for application to serve on a standing committee begins each summer, when announcements regarding application procedures and deadlines appear in the GFOA Newsletter. Applications are submitted to the Federal Liaison Center, which provides administrative support for all committee activities.

In late fall, committee members are appointed by the GFOA president to serve three-year terms that begin the following January 1. Committee membership is limited to two terms. These term limits were imposed in 1990 as a means of expanding participation in the standing committees. Committee chairs and vice chairs also are appointed by the president. Because the terms of members are staggered, the work of each committee can continue smoothly as new members come on board.

Most of the committees also have established a subcommittee structure. The existence of subcommittees facilitates consideration of topics by the committee as a whole, as they focus on specific issues and then present information or recommendations to their full committee. In addition, because much of public finance defies precise categorization, there also are ad hoc task forces and subcommittees formed to deal with issues that cut across the responsibilities of more than one committee. For example, there is currently a subcommittee on delinquent revenues, comprised of members from the Cash, Budget and CAAFR committees. The Debt and Cash committees are jointly monitoring swaps issues.

Much of the work of committees never culminates in specific policy statements. Instead, it consists of guidance given to the GFOA Executive Board on products and services offered to members, consistent with previous board direction. Topics for committee work are selected by the committee members, but suggestions for those topics come from a variety of sources--other GFOA members, GFOA staff, other state and local government groups, trade and industry practitioners--that is, almost any source which may have an impact on the way finance officers do business. Topics also are selected in response to and in anticipation of legislative, regulatory or judicial activities.

Through the work of the committees, issues are developed for GFOA public policy statements. These policies, once adopted by the full membership, will serve as a public declaration of GFOA's position on an issue. Prior to final adoption, however, a policy must first be approved by a committee. (Committee passage alone is sufficient for use as a public policy statement, as long as it is clearly stated that the policy has not yet been approved by the full membership.) Following this, the policy moves to the GFOA Executive Board for consideration. Often, the board will request background and contextual information about the development of the policy. During the interim between committee meetings, the Executive Board also is authorized to act on its own without committee passage of a policy. The board may approve the policy as passed by the committee, modify it or reject it. Once the board approves a policy statement, it is sent to the full membership for a vote at annual conference. Final approval by the GFOA membership results in official GFOA policy. All policy statements can be found in the GFOA Policy Notebook, which serves as an authoritative policy reference and is maintained in the GFOA Federal Liaison Center.

Policies set the agenda for the association, both internally and externally, and guide the activities of the various GFOA centers. In the case of the Federal Liaison Center, policy statements prescribe the issues and positions for lobbying and grass-roots activities. Throughout the association, training programs, publications, member services and annual conference sessions will be directed towards stated policy concerns.

In order for the committees to be most effective during their semiannual meetings, a great deal of work is done during the rest of the year that draws upon the expertise of committee members. Committee projects may involve surveying the GFOA membership about a particular accounting, cash management or budgeting practice in order to provide information about alternatives, responding to proposed rules issued by a federal agency, developing proposals for possible legislative consideration, meeting with industry groups to draft voluntary agreements or guidelines for conducting business, or compiling information for publication.

As noted earlier, the Federal Liaison Center has the responsibility for the administration of standing committees. The key committee activity is the Winter Meeting, held in Washington, DC, early each year. Agenda items for 1993 included consideration of pension fund investments in infrastructure (CORBA); GASB views on service efforts and accomplishments reporting (CAAFR); municipal disclosure (Debt); collateralization of public deposits (Cash); and a briefing on the earlier GFOA budget symposium (Budget).

The location of the meeting serves an important association purpose: committee members, in groups and as individuals, have an opportunity to meet directly with federal policy makers, regulators and other organizations, all of whose activities have a direct effect on many of the day-to-day operations of state and local governments. In previous years, standing committee members have visited the Department of the Treasury and the Securities and Exchange Commission to discuss government securities reform; they have met with Internal Revenue Service representatives to discuss problems encountered in complying with arbitrage regulations; and they have reviewed details of state and local government compliance with the Americans with Disabilities Act soon after its passage with staff of the National League of Cities.

This year, committee members concentrated on attending concurrent briefing sessions on arbitrage regulations, information reporting, and pension and benefits issues, as well as visits to Capitol Hill. As in other years, many committee members had appointments with their members of Congress to discuss issues of importance not only to GFOA but to their specific communities. Given the number of freshmen in the 103rd Congress, these visits will prove particularly important. The Washington presence clearly makes an important impression on Congress and the Executive Branch which has had demonstrated and lasting effects.

The work of standing committee members and their role in the GFOA public policy process will take on added significance as GFOA carries its message to finance officials nationwide, to other organizations and to the new administration and Congress. As a new partnership of federal, state and local government is established, GFOA, through its standing committees and active membership, will be ready to undertake substantive and innovative change.

Author BETSY DOTSON is assistant director of GFOA's Federal Liaison Center.
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Title Annotation:Government Finance Officers Association
Author:Dotson, Betsy
Publication:Government Finance Review
Date:Feb 1, 1993
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