Our Financial Intelligence Tool (FIT) has long offered a way for users to examine data on specific governments, government types, and specific revenue or expenditure streams. For the first time, FIT has a way to view all important information on a specific government type in one place, using new government-type profiles.
These new profile views for all government types show unique statewide data, including:
Financial indicators have received a meaningful update in our Financial Intelligence Tool (FIT), making them even more useful by capitalizing on the power of FIT's statewide collection of financial data.
Comparison power
Each financial health indicator now shows both the mean and median for other governments of your type. A local government can view how its indicator compares to those of similar governments across the state.
Indicators refocused
What's the best advice we can give you regarding use of and documentation for CARES Act funding? Document, document, and document some more. These funds should be treated just like any other federal award, which means their use should comply with the terms and conditions of the award and the Uniform Guidance. The federal Office of Management and Budget (OMB) provided some additional guidance and some exemptions to Uniform Guidance in its memorandums. OMB has stressed the requirement to maintain appropriate records to support costs charged to federal awards.
Many of you are attempting to anticipate the length or depth of the financial impacts of the pandemic. This will be difficult to predict, which makes financial planning challenging. One important tool available to help you in these circumstances is scenario planning.
Scenario planning is the purposeful act of preparing forecasts based on different underlying assumptions. It might include a worst case, a best case, and maybe two more possibilities in between.
Why you should use scenario planning
It is critical to forecast your cash inflows, outflows, and balances into the near-term future to anticipate liquidity shortfalls and remain solvent. Annual budgets tell you your spending authority for a year, whereas a cash forecast will tell you whether you have sufficient cash in the future on a month to month (or even daily) basis.
Why do it?
Cash forecasts:
During this pandemic, many governments are feeling the pressure on their general fund and looking at cost cutting and other measures. Acting early can be very beneficial. We noticed some local governments during the Great Recession (2007-09) that seemed to fare better because they did just that. Another strategy we observed was the use of teams to flush out financial options and strategies, to take advantage of some creative but legally allowable solutions. Even if you have a small staff, you can potentially reach out to peers to work on this together.
At least initially, the general fund typically bears all general operating costs, such as for information technology, human resources, accounting, and facilities maintenance. But some local governments develop a plan to share these overhead costs with other funds that jointly benefit from the services provided. A cost allocation plan is optional and requires some work to set up and carry out, but it can take some pressure off of the general fund. This blog post will share some helpful tips and resources should you decide to go that route.
If the COVID-19 crisis is hurting your local government's cash flow, you might be looking to borrow from restricted funds. A restricted fund is one containing revenues that are intended for a certain purpose due to legal or contractual constraints. However, if such a fund is holding cash that's not needed currently and it's legally available to be invested, then it may be loaned to other funds. Here are a few things to keep in mind:
The Federal Emergency Management Agency's (FEMA) Public Assistance Program was activated March 13, 2020, when President Trump declared the ongoing coronavirus pandemic an emergency under the Stafford Act. With recent passage of the CARES Act, the program has received an influx of resources available to state and local governments.
Based on our years of experience auditing FEMA public assistance grants and FEMA's current guidance, we have a few suggestions and resources for you:
Document your expenses
We know there's a lot of information coming out right now about federal grant programs and other federal financial assistance. It can be challenging to find information and resources you might be interested in, so we have done some legwork for you. Here are some resources you might find helpful as you seek and apply for federal grant funding: