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CSMFO COACHING PROGRAM
BEST PRACTICES FOR FINANCE DIRECTORS
APRIL 11, 2002 CONFERENCE CALL NOTES
INTERNAL RELATIONSHIPS: Most of your success will be judged on your interpersonal relationships, no matter how
technically competent you may be.
BEST PRACTICE WHY IMPORTANT NOTES
Discuss issues privately and put any concerns on the
Nurture your relationship with the City Whatever the title, this person is your boss and you were either table in a constructive way. If dealing with difficult
Manager/Administrator hired by this person or were inherited by him/her. Work with this people, a team building session may help. If
individual, not around them. difficulties continue, work with other department heads
to figure out how to address them.
Be an active team member with other You are on the same team; act like it.
Department Heads
Invest in these relationships. Some FD’s have holiday
Appreciate and respect your staff. In the long run, the extent of your accomplishments will be based parties and/or informal social events on a monthly
on the working relationship you have with your staff. basis—BBQ, monthly birthday days, etc. financed by
FD personally or group members themselves. Spend
informal time getting to know your staff.
Do you have contact? If not, and Council members
Be clear on how to work with the City You should have a clear understanding with the City contact you, keep your City Manager informed.
Council Manager/Administrator as to how and when you are to interface There’s a range of philosophies here—no contact, open
with the City Council (Board of Directors). contact, and open contact but keep CM informed.
EXTERNAL RELATIONSHIPS: Nurturing external relationships with open, honest, communication and mutual respect will gain
you credibility and trust.
BEST PRACTICE WHY IMPORTANT NOTES
Have a clear understanding with the CM about the
Develop a healthy relationship with the Tell the truth, including, “I don’t know” when you don’t know an relationship. Find a point of contact with reliable
press. answer. Build mutual trust by showing respect for the job they people. Encourage the press to be accountable by
have to do. Make it clear what you can discuss and what you calling when misquoted or inaccuracies arise.
can’t.
The public is both the customer and the ultimate
Remember that service to the public is the Treat the public with respect and courtesy even when delivering boss.
ultimate objective. bad news. Make sure your staff is trained to do the same. Treat
the public as though they could get the service somewhere else,
even if they can’t.
Look in the CSMFO directory for the listing of
Tap State and League organizations. These resources can help you get your job done and they influence members who serve on various boards and
many decisions that affect your work. professional organizations. Check out the
League’s divisional “grass roots” representatives.
HIRING/STAFF DEVELOPMENT: Hiring will be the single most important action for which you will have responsibility during
your career.
BEST PRACTICE WHY IMPORTANT NOTES
When hiring, let the process work. Don't try to shorten the formal process. Keep it open and honest.
Provide adequate staff training. This is a continuation of the hiring process.
Support staff growth. For those that show growth potential, give encouragement and
support and look for it in others.
Adequate supervision is the key part.
Provide adequate resources. Make a personal effort to provide adequate equipment, supplies,
materials, guides and supervision for your staff members to
perform their duties.
Respect you staff. Your respect and understanding of your staff will be repaid many
times.
ACCOUNTING, AUDITING, Accuracy, honesty, integrity, objectivity, consistency, credibility,
FINANCIAL REPORTING: and timeliness are the best practices for this area of responsibility.
BEST PRACTICE WHY IMPORTANT NOTES
See GFOA “Recommended Practices” book
Maintain accounting systems that enable Consistency. [reference at end of notes].
preparation of financial statements.
Prepare and publish comprehensive Reliability.
annual financial report.
Prepare financial statements in conformity Disclosure.
with GAAP.
Obtain annual independent audit of Reliability.
financial statements.
If not the full Council, then use an Audit, Finance,
Audit procurement process. Should be done in an open process that has City Council included, or Budget Committee of the Council. Consider a
and it should be their decision. policy of rotation or at least an RFP process. Five
years seems to be a desirable interval.
Think like an auditor. If a formal internal audit
Consider internal audit function. No matter what the size of the organization, internal audits and role is not possible, try an informal or overview
internal controls should be considered. approach.
Identify full cost of services. The term "full cost recovery" is used, but not always possible.
However, it is desirable to have full cost identification (fee setting,
budgeting, setting priorities, subsidy awareness).
BUDGETING: Good budgeting practices can be attained through honesty, accuracy, policymaking, comprehensive
communication.
BEST PRACTICE WHY IMPORTANT NOTES
Develop good budget policies. Develop policies that contribute to the ongoing
fiscal stability of the organization. They should
include such things as ongoing expenses are 100%
supported by ongoing revenues, level of reserves,
authority for budget amendments, etc. They should
reflect what is important to your organization.
Provide summarized information in your budget Budget documents are so large, it is important to
document in addition to any detail you wish to provide summarized information to help those that
provide. prefer not to wade through pages and pages of
numbers get an overview of the impacts of the
budget.
Review fees and charges to keep pace with the cost By reviewing fees and charges on an annual basis,
of the services. they can be adjusted incrementally to keep up with
the cost of providing the service. The services that
are designed to be self-supporting need periodic
adjustment so they are not subsidized by
discretionary revenue sources.
Use the one-page “Budget in Brief.” [See
Promote effective communications with Develop a method of communications that is simple CSMFO.org and CSMFO budget awards for
stakeholders. and clear to those interested in budget information. examples.]
Keep in mind that not all who are interested in
budget information are proficient with numbers.
Don’t confuse them with too much detail. Explain
what is being accomplished for the budget period
and the bottom line costs.
Performance-based budgets? There are some
Develop a budget that addresses and discusses the The budget document should describe not only how beginning efforts with a few measures. [See
goals and objectives of the organization. much the agency plans on spending, but why they reference at end of these notes; GFOA web site;
are spending. By including goals and objectives in and check out www.smartpros.com.]
the budget document and process, it keeps the
organization focused on what needs to be done to
achieve them. Making budget decisions based on
outcomes and results is a far more effective way of
budgeting.
Use long-range financial planning, multi-year
Fully disclose the impacts of the budget. The budget process should include an analysis of budget or separate projections. Develop and follow
fund balances so that decision makers are fully good long-term financial policies.
aware of the impact of their decisions.
CASH MANAGEMENT: Good cash management practices can result in prudent stewardship over agencies assets.
BEST PRACTICE WHY IMPORTANT NOTES
Develop good cash management policies. Good policies will serve as the foundation for good
cash management practices. All policies should be
reviewed periodically to determine if they are still
sufficient. The Investment Policy requires annual
review.
Daily cash report is a good idea. Some use an East
Know your cash/investment position at all times. By knowing your cash/investment position at all Coast bank for disbursement to help timing.
times, you can keep the funds working rather than
having excess idle funds.
This is a key issue. Don’t assume that a pool is
Remember Safety, Liquidity and Yield, in that Keep your investments safe is foremost. There safe.
order. have been too many agencies that have sought yield
to the detriment of safety and lost. We have all
heard the stories. Liquidity is also important so that
when it’s time to pay the bills, the funds are
available.
Some qualify brokers every two years.
Pre-select brokers you will work with. By pre-selecting brokers, you establish reasonable
parameters by which you will measure a firm’s
worthiness to provide brokerage services.
Always use a 3rd party custodian for your Your 3rd party custodian can purchase and hold the
investments. Never send the funds directly to the investments sold to you by your broker. This will
brokerage. ensure that the investment is actually made and will
provide a place where it is kept safe. The same
diligence in selecting your 3rd party custodian
should be used as was used in pre-selecting your
brokers.
Other Comments:
Bond Issuance
See “Recommended Practices” publication from GFOA. Also, consider the California Debt and Investment Advisory Committee’s “Mechanics of a Bond Sale” course.
If it’s your first bond issuance, consider an independent financial advisor and be sure to have a good bond counsel.
RESOURCES:
Governmental Accounting, Auditing, and Financial Reporting – Using the GASB 34 Model. Available from GFOA.
http://www.mrsc.org/cityorg/bestpractices.html Best Practices of City Governments - U.S. Conference of Mayors. Includes a searchable Best Practices Database.
Performance Measures Best Practices - National Performance Review, June 1997.
http://www.gol.org/bestof.html Best of Practice - Government Solutions - State Technologies, Inc. (STI) is a not for profit research group based in Albany, NY
specializing in issues of policy and technology in the public sector. Provides best practices information by state and functional area.
www.excelgov.org Council for Excellence in Government - The Council works to improve the citizen confidence and participation in government.
Recommended Practices for State and Local Government. Approved by Government Finance Officers Association May 2001. www.gfoa.org.
Effective Supervisory Practices: Better Results Through Teamwork Available from ICMA) www.icma.org
Best of Governmental Budgeting . Available from GFOA. www.gfoa.org
Accounting Issues and Practices. Available from GFOA. www.gfoa.org
Introduction to Broker/Dealer Relations. Available from GFOA. www.gfoa.org
www.gfoa.org/services/nacslb/ (Web site for Best Practices in Budgeting from the National Advisory Council for State and Local Budgeting). Note: This site is
exceptionally rich in information .
CSMFO Resource Room: www.csmfo.org.
CSMFO Outreach Program.
Sample list of publications available through the League of California Cities Citybooks - www.cacities.org:
Best Practices in Customer Service
Benchmarking Staff Performance
Analysis for Improving Performance
Coaching, Counseling & Mentoring
Delivering Knock Your Socks Off Service
Developing Charlie: How to Grow Great Employees
Finding & Keeping Great Employees
Benchmarking for Best Practices in the Public Sector: Achieving Performance Breakthroughs in Federal, State, and Local Agencies
Management of Public Funds: Adoption of Reserve Policies
Dollars & Sense, Local Government: 225 Financial Tips for Guarding the Public Checkbook
