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Winter meeting 1999.

The GFOA held its annual Winter Standing Committee Meeting on February 2 and 3 in Washington, D.C. Five of the six standing committees met to begin discussion and development of recommended practices and policies. In addition, members planned future committee activities and discussed research and publications. Standing committees meet twice each year, at the Winter Meeting and at the annual conference. The Winter Meeting offers members the opportunity to meet with their congressional representatives to discuss issues of concern to state and local governments and to meet with administration policy makers as well. Policy statements or recommended practices approved by the committees are considered by GFOA's Executive Board. Policies approved by the Executive Board are submitted to the entire membership for vote at the annual business meeting during the annual conference.

At the Winter Meeting, participants assembled for a general session to hear a presentation from the keynote speaker, Mayor Anthony Williams of Washington, D.C. In his inaugural address, Mayor Williams had stated that he is not a professional politician but rather a "card-carrying member of the Government Finance Officers Association." The mayor is the former Chief Financial Officer of the District of Columbia Control Board. The focus of his speech was on the steps taken by the District government as it recovers from its financial woes and attempts to improve its credit rating. Mayor Williams also discussed the role of the federally created control board, which oversees many of the financial operations and management for the District of Columbia.

The Committee on Accounting, Auditing and Financial Reporting (CAAFR) approved a recommended practice entitled Computer Disaster Recovery Plans. The committee also approved a recommended practice on process reengineering, which was subsequently referred to the other standing committees for comment. The CAAFR worked together with the Committee on Governmental Budgeting and Management to approve a draft policy statement, Infrastructure Reporting, reiterating GFOA's position on infrastructure reporting in connection with the Governmental Accounting Standards Board's (GASB) proposed new financial reporting model. If infrastructure reporting is to be required despite GFOA's objections, the committees are urging that steps be taken to minimize the costs of compliance. Specifically, the committees would like the GASB to allow the use of replacement cost to initially value infrastructure assets and to consider a simplified approach to the depreciation of infrastructure assets similar to that employed for the amortization of intangible assets in the private sector Also in the context of the proposed new financial reporting model, the CAAFR joined with the Committee on Governmental Budgeting and Management to prepare a draft policy statement, Retaining Budget-to-Actual Comparison within the Audited Financial Statements, urging the GASB to retain budget-to-actual comparisons within the audited financial statements rather than to reclassify such presentations as required supplementary information (which, by definition, is unaudited).

The Committee on Retirement and Benefits Administration (CORBA) considered and approved two recommended practices. Public Pension Plan Design Considerations provides recommendations on defined contribution, defined benefit, and hybrid pension designs and the factors to consider in developing these plans. Directed Brokerage Programs consists of guidelines to avoid conflicts of interest. The committee deliberated extensively and approved a policy statement, Mandatory Social Security Coverage for State and Local Government Employees, declaring that Social Security reform should not include mandatory state and local government employee participation.

CORBA members also heard a presentation on the "Choose to Save" campaign to encourage greater savings among public and private-sector workers. A Securities and Exchange Commission (SEC) representative met with CORBA regarding its recent inquiry into "soft dollars," as well as providing a legislative update.

The agenda of the Committee on Governmental Budgeting and Management included a presentation from GASB on the proposed new financial reporting model. The committee expressed deep concern regarding the infrastructure and budgetary reporting provisions of the proposed model. As a result, the committee adopted jointly with the CAAFR draft policy statements reiterating the GFOA's position on infrastructure reporting and objecting to the GASB's proposal to remove budget-to-actual comparisons from audited financial statements.

After a presentation by a member of GFOA's Technology Resource Group, members expressed need for increased communication through on-line information dissemination, improved government software, and information on emerging issues. Discussions also were conducted on the recommended practices of the National Advisory Council on State and Local Budgeting and on an update on the GFOA Distinguished Budget Presentation Awards program.

Technology, specifically Year 2000 issues and electronic commerce, also was a focus of the Committee on Cash Management. In addition, a presentation was heard on electronic signatures and the need to use a secure key (password) for transacting business electronically. Recommended practices on Frequency of Purchased Securities Valuation in Repurchase Agreements and Check Fraud Protection were approved. The committee will be drafting a recommended practice for debit and credit cards. The committee also discussed updating the GFOA guide to the Master Repurchase Agreement, Sample Investment Policy and the recommended practice on Selection of Investment Advisors.

The Committee on Governmental Debt and Fiscal Policy approved a policy statement entitled Electric Utility Industry Restructuring. The committee then heard other presentations. Paul Maco from the Security and Exchange Commission's Office of Municipal Securities and Diane Klinke with the Municipal Securities Rulemaking Board focused on disclosure issues and providing information to the marketplace. Discussion followed regarding the status of electronic dissemination of information. Thomas Dubbs, attorney for Collier County, Florida, discussed yield burning. Collier County, Florida, is the named plaintiff on a yield burning class-action suit. Dubbs emphasized that there is not one generally accepted definition for yield burning and explained that there are three kinds:. 1) negative arbitrage in which money is taken because of markup; 2) positive arbitrage where money should have been refunded to the government and now municipalities owe to the government; and 3) a mixed case of positive and negative arbitrage.

The Committee on Governmental Debt and Fiscal Policy joined the Cash Management Committee for a presentation from The Bond Market Association on "Bond Markets 2000: A Conceptual Framework for the Efficient Regulation of the Fixed-Income Markets." Additionally, CORBA joined the Cash Management Committee for a presentation from the SEC on "pay-to-play" regarding investment advisors.

Both the Black Caucus and Women's Public Finance Network held working meetings. In addition, GFOA's new task force called the Technology Resource Group (TRG) convened its first meeting. The TRG was formed as a result of recommendations by a previous technology task force to advise GFOA on technology matters. The group discussed outlines of a work plan and gave staff direction on topics to pursue in the areas of research, training, and policy development. One of the major considerations was to develop a policy statement on Internet access and use by local governments. Other issues included the Year 2000 (Y2K) problem, recommended practices on financial system upgrades, document imaging, training, change management, Intranets and Internets, and retaining information technology staff.

GFOA members are welcome to attend standing committee meetings. The next standing committee meeting will be held on Saturday May 22, 1999, prior to GFOA's annual conference in Nashville, Tennessee. A listing of members and officers of each committee follows.
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Title Annotation:Government Finance Officers Assn
Publication:Government Finance Review
Date:Apr 1, 1999
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