GFR February 2023

Government Finance Officers Association | FEBRUARY 2023
Seeking
consensus with
quadratic voting
Why employees
leave (and what
to do about it)
Government Finance Review
The skill set public
finance staff needs
Getting a
Better View
How budget officers can reduce
bias and noise in decision making

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contents FEBRUARY
2023 | VOLUME 39, NUMBER 1
16
The Decision Architect
How budget officers can reduce
the impact of bias and noise for
better decision-making
By Jason Riis and Jared Peterson
24
Seeking Consensus
Navigating a crowded
decision-making environment
with quadratic voting
By Matt Prewitt, Alex Randaccio,
and Shayne C. Kavanagh
The traditional majority
rule system forces
people to pick a side and
discourages them from
investigating potential
areas of compromise.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 1

contents
6 Contributors
8 From the CEO
11 GFOA Forums
By Mark Mack and Katie Ludwig
13 Relationships Matter:
Georgia GFA Moves Forward
By David Khosruashvili and
Terri Velasquez
14 What to Watch for in the
118th Congress
By Michael Belarmino
49 It’s Our Team: The City of
Thousand Oaks, California
By Katie Ludwig
54 Attention Required...STAT!
By Michele Mark Levine
58 Process Improvement: Saving
Time, Money and Stress
By Katherine Barrett and Richard Greene
62 Reallocate the Police? A Case
of New Financial Innovation
By Justin Marlowe
64 Q&A with Jack Pellegrino
By Mike Mucha
68 An Interview with Harpreet Hora
By Mike Mucha
72 10 Steps to Ensure You Won’t
Recruit the Talent You Need
30
Putting on a
Project Face
Why treating organizational
operations as projects
can improve efficiency and
increase transparency
By Rob Roque
40
Bye-bye, Boss
Why good employees leave
and what to do about it
By Kate Zabriskie
36
Opening Doors
to Opportunity
The Greater Cleveland Regional
Transit Authority creates a
successful disadvantaged
business enterprise program
By Carl Kirkland and Kay Sutula
44
Public Figures
Why communication skills are
essential for public finance staff
By Sandra Emerson
2

#GFOA2023
Preconference Seminar
Preconference Seminar
SCHEDULE
SCHEDULE
May 19 | The Importance of Cash Flow Forecassng
May 19 | Strategic Asset Management
May 19 20 | The Workforce Importance Management: of Cash Flow Leading Forecassng Remote
May 19 | Strategic
and Hybrid
Asset
Teams
Management
May 20 | Cyber Risk Awareness for Finance Officers
May 20 Workforce Management: Leading Remote
May 20 | Overview of Federal Grant Compliance
May 20 | Accounnng and Hybrid for Teams Compensated Absences
May 20 | Alliance Cyber Risk for Awareness Excellence for in School Finance Budgeeng Officers
May 20 | Overview Modern Praccces of Federal in Grant Public Compliance
Engagement
May 20 | Accounnng for Compensated Absences
May 20 | Alliance for Excellence in School Budgeeng
May 20 | Modern Praccces in Public Engagement
Register for preconference seminars at gfoa.org/conference.

Publisher
Chris Morrill
Editor in Chief
Michael J. Mucha
Managing Editor
Marcy Boggs
GOVERNMENT FINANCE REVIEW
www.gfoa.org/gfr
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gfr@gfoa.org
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gfoa.org/gfr
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individuals to submit manuscripts to GFR.
All manuscripts should conform to the Editorial
Policy and Guidelines for Authors, which are
available online at gfoa.org. Manuscripts should
be submitted electronically to gfr@gfoa.org.
CONTACT
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President
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Past President
Mecklenburg County
Government, NC
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President-Elect
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Budget and Management, MD
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City of Scottsdale, AZ
Lunda Asmani
Norwalk Public Schools, CT
Laurie M. Brewer
City of Georgetown, TX
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City of Sugar Land, TX
Bruce H. Fisher
Nova Scotia Utility and
Review Board, NS
Tanya Garost
District of Lake Country, BC
Jason Greene
Anne P. Harty
City of Rock Hill, SC
Rafiu O. Ighile
Howard County
Government, MD
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City of Red Wing, MN
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Kansas Turnpike Authority, KS
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Commission, CA
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Water District, CA
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City of Alexandria, VA
Chris Morrill
GFOA
GFR (Government Finance Review) (ISSN 0883-7856) is published bimonthly in February, April, June, August, October, and
December. Subscription price is $35 annually. Opinions expressed herein are the viewpoints of the authors. They may differ from
the policies and recommendations of the Government Finance Officers Association, its committees, and staff. Letters to the editor
are welcomed. Copyright 2023 by the GFOA. Published by the Government Finance Officers Association, 203 N. LaSalle Street,
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4

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CONTRIBUTORS
Sandra M. Emerson, Ph.D., is a professor in the political science department at California
State Polytechnic University (CPP). In addition to having taught courses in public policy
and public administration at CPP, the University of La Verne, and the University of Southern
California, she has worked in this arena in both private and public sectors. She has been a
program administrator for Medicare Part B, a consultant with Southern California Edison,
and a budget and program analyst with the City of Norfolk, Virginia. She has a PhD and MPA
from the University of Southern California, and a BA and MPA from Temple University.
Shayne Kavanagh is the senior manager of research for GFOA’s Research and Consulting
Center. He’s been a leader in developing the practice and technique of long-term financial
planning and policies for local government. Shayne’s financial planning experience also
drives his research at GFOA. He’s written a number of influential publications on financial
planning and a number of articles on long-term financial planning, financial policies, budget
reform, using technology to improve efficiency, and related topics for magazines including
Government Finance Review, Public Management, School Business Affairs, and Public CIO. Before
joining GFOA, Shayne was the assistant village manager for the Village of Palos Park, Illinois.
Carl Kirkland, MBA, CCA, MCA, ECMCA, is the director of the Office of Business Development
for the Greater Cleveland Regional Transit Authority (RTA). He provides contract compliance,
Federal Transit Administration monitoring and reporting, minority goal setting, and outreach
awareness for the Greater Cleveland RTA’s Disadvantaged Business Enterprise Program.Kirkland
holds an MBA with a concentration in E-Business from the University of Phoenix and contract
compliance administrator and master certification administrator certificates from Morgan
State University. He is also pursuing his certification as a Certified Public Manager (CPM).
Jared Peterson is a senior behavioral science consultant at Behavioralize. He has a
background in psychology and data science and a master’s degree in Behavioral and Decision
Sciences from the University of Pennsylvania. His main interests are in the science of
judgment, decision-making, and motivation—in other words, how do people know what is true,
what to do about it, and then actually get themselves to do it?
Matthew Prewitt is RadicalxChange Foundation’s president, a writer and blockchain industry
advisor, and a former plaintiff’s side antitrust and consumer class action litigator and federal
law clerk.
6

Alex Randaccio is technical director at RadicalxChange. He leverages an interdisciplinary
background in software development and political theory to build out and advance projects.
Alex proudly hails from Buffalo, New York.
Jason Riis, Ph.D, founded Behavioralize in 2018 on the premise that behavioral science could
be leveraged to drive growth across industries. He saw a gap between what academics were
uncovering about how human decision-making worked and how organizations were managing
human decision processes (for all stakeholders). His consulting work has helped Fortune 500
companies, startups, and nonprofits develop and test initiatives inspired by behavioral science.
He is passionate about behavior change related to health, wellness, and technology.
Rob Roque is the technology services manager for GFOA’s Research and Consulting Center,
and he’s been with GFOA since 1998. Rob’s primary responsibilities with GFOA are to provide
enterprise system implementation advisory services, enterprise system project management
services, and enterprise selection services. Before joining GFOA, Rob was a senior budget
analyst with the City of Pittsburgh, Pennsylvania. Rob has a MA in urban and regional planning
with a concentration in management information systems and a BA with a concentration in
urban studies and political science from the University of Pittsburgh. He is a certified Project
Management Professional.
Kay M. Sutula is director of the Office of Management and Budget for the Greater Cleveland
Regional Transit Authority. Kay holds an MBA from Franklin University. She graduated from
the Cleveland State University’s Leadership Academy and was on the Leadership Academy
Advisory Board from 2011 to 2018, where she served as president of the advisory board from
2016 to 2018. She recently attended Cleveland State University’s Public Management Academy.
Kay is currently on Ashland University’s Women in Leadership Advisory Board.
Kate Zabriskie is the president of Business Training Works, Inc., a Maryland-based talent
development firm. She and her team provide onsite, virtual, and online soft-skills training
courses and workshops to clients in the United States and internationally. For more information,
visit businesstrainingworks.com.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 7

FROM THE CEO
Christopher P. Morrill
Executive Director/CEO
Education to Serve Every Member
The No. 1 challenge I hear
about when I speak to
members is attracting
and retaining talent. I’ve
even heard it described
as a crisis for government finance.
While the solutions to the talent
problem are multi-faceted, we believe
that education and professional
development are critical.
GFOA’s recent research report,
“Meeting Demand for State and Local
Public Finance Jobs” (available at
gfoa.org/meeting-demand-publicfinance),
offers insights that can help
governments think differently about
finding talent. GFOA is committed
to developing best practices and
strategies for finding talent outside
of the public sector. We also want to
partner with you in helping to develop
existing employees, which is a strategy
shown to help with retention.
Approximately 43 percent of all
GFOA members engaged with us in at
least one training session last year, and
we hope to improve on that in 2023.
More of our members should not only
have the opportunity to learn best
practices, identify strategies for solving
common problems, and develop critical
skills, but also to meet with each other,
share their experiences, and engage
with the best membership network in
the public sector. As you navigate the
challenges your government faces or
plan for the next steps in your career,
I encourage you to look at GFOA’s
educational offerings throughout the
year, especially the new initiatives
we’ll debut in the coming weeks.
Technical training remains the core
of GFOA’s educational curriculum.
In 2023, we will offer more than 45
recurring courses covering fundamental
topics in public finance. And to make
our training more accessible, we will
offer both virtual and in-person versions
of most of the classes in our training
catalog. Virtual learning makes training
more convenient and, for some of our
members, it makes training possible
where it wasn’t before. At the same
time, group discussions, mentoring, and
networking can be difficult over Zoom, so
we will make greater use of our enhanced
training facility at the GFOA offices in
Chicago for our in-person events.
Over the past year we’ve invested in
new technology that greatly improves
the audio, video, and video conference
capabilities in our Chicago training
Members should not
only have the opportunity
to learn best practices,
identify strategies
for solving common
problems, and develop
critical skills, but also
to meet with each other,
share their experiences,
and engage with the best
membership network
in the public sector.
room. We also plan to return to our prepandemic
approach to bringing training
to a other locations around the United
States. We kicked off 2023 by hosting
classes in Garden Grove, California.
Please look at GFOA’s events calendar (at
gfoa.org/events) for a complete listing
of offerings, featuring popular classes
such as the Accounting Academy,
Intermediate or Advanced Governmental
Accounting Budget Academy, the Role
8

©2023 MICHAEL AUSTIN C/O THEISPOT.COM
of the Finance Officer in the Budget
Process, Treasury Management Best
Practices, Debt Management Best
Practices, and ERP Readiness and
System Selection.
We won’t just be covering core topics,
though. Last year’s training sessions
focusing on current events, recent
research, and how to better prepare
for and respond to federal government
programs were very popular, and we’ll
be building on that in 2023. Last year’s
most popular individual classes (other
than the GAAP Update, which will
return in November) were related to
grant and American Rescue Plan Act
compliance. You can also expect timely
information related to our federal
advocacy efforts, “Rethinking” research
initiatives, and developments from our
public finance workforce initiative.
Another unique opportunity is
GFOA’s virtual forum, which will
return in 2023 to provide five days of
carefully curated sessions aimed at
providing comprehensive sessions
on core public finance topics. The
virtual forum provides an excellent
opportunity for entry or mid-level staff,
who may not have the budgeted funds
to attend a full conference for a week,
to experience multiple sessions and
engagement opportunities.
GFOA also recognizes that finance
officers need to improve leadership
skills as well technical skills. Our
Financial Foundations Framework
provides leadership strategies and
principles that help our members get
those best practices implemented.
We’re also working to incorporate
these lessons into existing training
sessions, and if you attend the GFOA
annual conference in Portland,
Oregon, this summer, you’ll notice our
new emphasis on leadership sessions.
In addition, our Leadership Academy
will be offered at least twice this
year, and we’ll have a virtual training
series specifically for leadership
and DEI competencies. Stay tuned
for announcements about our first
leadership offering this spring.
We are confident that all our GFOA
members will find useful training and
opportunities that will allow them
to engage with GFOA and get value
from their membership. To help you
find your training best fit, or to help
your staff develop the skills they need
to take the next steps in their careers,
we are developing a new approach
based on “learning pathways.” We’ll
roll out these resources later this
year to highlight critical skills and
competencies required for different
roles within public finance.
GFOA takes pride in being able to
provide training that is practical,
relevant, and high-quality, an effort
that depends on assistance from many
volunteers who help us develop and
deliver these sessions. If you have an
interest in volunteering to assist with
GFOA training, please reach out at
gfoa.org/volunteer.
Sincerely,
Register Now
View GFOA’s upcoming virtual and
in-person educational opportunities.
gfoa.org/events
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 9

ewind
Budget Negotiation
A look back at GFR in December 1993
Abudget acts as a contract
between a local government
and those it serves. Taxes
and fees are exchanged
for a variety of services.
In addition, the budget sets overall
parameters for how government will
provide those services using employees,
vendors, and partners to deliver value.
Preparing a budget can be done in
many ways, but the budget officer needs
to be careful how they negotiate decision
points along the way. For example,
according to the December 1993 issue
of GFR they should not be:
• Playing ping-pong, with the
department head asking for a 5
percent increase, the budget officer
offering 3 percent, and both finally
settling at 4 percent.
• Intimidating a department head
into submission because the budget
person has better access to the top.
• Smiling a lot and trying for the
budget that angers the fewest people.
• Generating reams of spreadsheets,
charts, and graphs to prove there is
only one correct budget.
• Feeding data, ideas, printed reports,
and maybe gossip to the chief
executive officer and letting the CEO,
who “is the only one with power,”
handle the personal confrontations.
Any of these tactics may work in the
short run, but they’re destructive to real
organizational achievement.
The good news, the article explains,
is that negotiating skills can be learned,
and adding these skills to the technical
ones already possessed will make for a
more confident—and consequently more
effective—budget professional.
Planning. The mission statements
of the organization, the budget office,
and the department in question are
combined with the specific directives
from the CEO as a constant reminder of
the purpose behind the budget process.
The budget officer then looks for the
quantitative and often-overlooked
qualitative pressures that face the
department to better understand the
other side. If additional research is
required, the budget officer should
identify it now and set specific
deadlines for completion.
Organizing. Several organizational
factors can be controlled or influenced
to improve the prospects for a positive
negotiating experience. Sound strategy
requires:
• Controlling the timing. Time
pressure, one of the most critical
factors in any negotiation, is also
the one area where the budget
department has almost unlimited
power to exercise control of the
calendar, putting the bulk of the
pressure of deadline onto others.
Remember the Pareto rule: “Eighty
percent of the concessions are made
in the last 20 percent of the time.”
• Using the written word. Posted prices
are rarely questions, while quoted
prices are seen as open to bargaining.
• Anticipating issues. Never narrow
things down to just one issue—if
that happens, someone will win and
someone will lose. Tradeoffs can be
made more easily if there are several
items on the table.
• Creating limited apparent authority.
Even if the budget officer has
absolute authority, make it look like
this is not the case. Consider building
in a review step, with the budget
committee functioning like the oftenmythical
loan committee in a bank.
This keeps pressure off the officer to
decide on the spot.
• Arranging the setting. To avoid
intimidating other parties, the best
setting for a mutual win is a neutral
place.
Staffing. A good negotiator has patience
and an ability to plan, is goal directed,
understands the organization, is
innovative, and has a fair amount
of stamina—all qualities that can
be developed and improved. The
organization should invest in training
for budget negotiators.
Directing. Stay focused on the goal,
which is to improve the organization
while improving individual
relationships.
Controlling. The budget officer should
know several tactics for keeping the
process moving forward to a favorable
conclusion and should know how to
deflect progress-stopping moves. One
of these tactics is to start out asking for
more than expected.
Budget professionals accept personal
responsibility to gain new skills that
will turn the budget process itself into
an effective tool of accomplishment for
the organization.
©2023 JIM FRAZIER C/O THEISPOT.COM
10

In Brief
GFOA FORUMS | INTERNATIONAL UPDATE | FEDERAL UPDATE
GFOA FORUMS
Small Government Forum
Providing Targeted Content and Networking Opportunities
BY MARK MACK
©2023 SJOERD VAN LEEUWEN C/O THEISPOT.COM
GFOA’s Small Government
Forum is just what it says
on the tin—a group of GFOA
members from government
entities with populations of
25,000 or less, or employee counts of 500
or less. The forum was launched in 2015
to provide networking opportunities
that allow GFOA members to connect
with peers from similar organizations.
Members exchange information on topics
unique to the demands of managing
small governments.
The forum adds value through
targeted content and activities—for
example, research on adding capacity
and stability by cross-training
employees in the finance department.
This 18-month project engaged forum
members directly with approximately 20
case studies of small governments that
used cross-training to add capacity. An
industry survey determined how and
where cross-training was currently
being leveraged in local government
finance. Experts from other industries
and academics were also engaged
through an advisory committee. This
research produced a series of webinars
that were provided for free to all GFOA
members.
The forum also provides a platform
for GFOA members to connect and
network with their peers in similarly
sized organizations. The forum started
in 2015 as a networking luncheon for
about 60 members at the GFOA Annual
Conference in Denver, Colorado. Since
that time, the group has grown to more
than 700 members from all regions of
the United States and Canada. These
members also come from a broad
mixture of organizational types—cities,
counties, school districts, utilities, and
other special districts.
The forum provides professional
development opportunities in a format
that’s useful to small governments.
Many small governments don’t have
the financial capacity that larger
organizations have for staff development.
The training sessions available to them
are often regional and limited in terms of
topic areas. Over the last eight years, the
forum has provided relevant content to
small governments at no additional cost.
The limited staff in small finance offices
means that the job of implementing best
practices can’t be approached in the
same way that larger organizations might
approach it. For example, implementing
and managing a capital improvement
plan is normally a long-term project that
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 11

IN BRIEF
must be built out over time, as opposed
to a single budget cycle, which might be
possible in a large city.
Finally, the forum promotes
professionalism in financial
management within small
governments. In many places, the
requirements to serve as a finance
officer in smaller organizations is
minimal. Many CFOs in small cities and
towns come to the job without a finance
background, which can result in gaps
in knowledge about what’s required
legally as well as industry norms and
best practices. The forum has sought
to promote professionalism by making
best practices and leading trends
in local government finance more
accessible to small organizations.
What next for the forum? Looking
forward, the Small Government
Forum will continue producing its
quarterly newsletter, which contains
short articles from SGF members
addressing issues relevant to small
organizations. We also have several
free webinars planned for 2023 about
effectively communicating financial
information, managing grants with a
small staff, and other topics. We also
have virtual networking opportunities
centered on topics including succession
planning in small organizations,
what you should do if you don’t have a
state GFOA, discussing capital plans
with elected officials, and war stories
about “upskilling” your city council.
Forum members can also participate
at any time in conversations on the
GFOA Small Government Forum online
community.
Sound interesting? Check out the
forum’s web page at gfoa.org/smallgovernment-forum
and see if you’d
like to join us!
Mark Mack is a senior manager in GFOA’s
Research and Consulting Center.
Urban Forum
Addressing Demands of Large and Complex Entities
BY KATIE LUDWIG
GFOA’s Urban Forum
provides an opportunity
for members of large
governments to
network and exchange
information on topics unique to the
demands of managing their large and
complex entities. The forum is currently
open to GFOA members in urban
jurisdictions from the United States
and Canada with area populations
of one million or more. To join the
Urban Forum, all you need to do is
complete the form at gfoa.org/urbanforum-registration.
Once you are a
member, join our online community at
community.gfoa.org/home.
GFOA hosts monthly online
networking webinars for Urban Forum
members. You can register for these
free sessions in the events calendar
at gfoa.org/events. GFOA welcomes
suggestions for discussion topics and
guest speakers for these monthly events.
GFOA’s Urban Forum is hosting a book
club this spring. We will be reading
Fixer-Upper: How to Repair America’s
Broken Housing Systems by Jenny
Schuetz, senior fellow at Brookings
Metro. Schuetz is an expert in urban
economics and housing policy and
has written numerous peer-reviewed
journal articles on land use regulation,
housing prices, urban amenities,
and neighborhood change. She has
appeared in the New York Times, Wall
Street Journal, Washington Post, the PBS
NewsHour, The Indicator podcast, Vox,
and Slate.
Fixer-Upper assesses how local, state,
and national housing policies affect
people and communities. It does more
than describe how yesterday’s policies
led to today’s problems—it proposes
practical policy changes than can
make stable, decent-quality housing
more available and affordable for all
Americans in all communities.
After reading the book, the Urban
Forum will host a networking session
with Dr. Schuetz. We are in the process
of finalizing the date for this session,
so stay tuned!
If you have any questions about the
Urban Forum, feel free to reach out to
Katie Ludwig (gfoa.org/bio/ludwig) or
Jake Kowalski (gfoa.org/bio/kowalski).
Katie Ludwig is director of resource
development in GFOA’s Research and
Consulting Center.
12

GFA President and Chairman
David Khosruashvili and GFOA
President Terri Velasquez at the
2022 Association of Finance
Officers of Local Self-Governing
Units of Georgia conference.
GFOA INTERNATIONAL
Relationships Matter
Georgia GFA Moves Forward
BY DAVID KHOSRUASHVILI AND TERRI VELASQUEZ
GFOA values its relationships
with members, and with
our partner organizations.
Attending GFOA
conferences provides
an excellent opportunity to meet with
other members and to strengthen state
and provincial relationships. And one
of the unique features of GFOA’s annual
conference is the many international
delegates in attendance.
One of GFOA’s valued international
relationships, with the country of
Georgia, began in 2006. (GFOA has
affiliation agreements with public
finance associations in other countries
as well, including Israel, Sweden, and
South Africa.) The next step was forming
the Association of Finance Officers of
Local Self-Governing Units of Georgia
(GFA) in 2007, under the leadership of
David Khosruashvili, the association
president and chairman. Since then, 99
percent of Georgia’s municipalities and
50 member organizations (municipality
established legal entities) have become
GFA members.
GFA has also established a
collaboration agreement with Georgia’s
State Treasury Department of the
Ministry of Finance, solidifying its role
in the government’s Public Finance
Management Reform Agenda. According
to the memorandum, GFA is working on
the implementation of new accounting
standards for the public sector in
municipalities, collaborating with
Treasury and the Ministry of Regional
Development and Infrastructure.
GFA has been recognized as the
government’s partner organization in
implementing the reforms.
GFOA past presidents Tim Grewe
and Ken Rust also helped lead the way
in establishing a formal affiliation
agreement between GFOA and GFA,
signed in 2009.
Georgia is a small country located
in Eastern Europe, sharing borders
with Russia to the north, and Turkey,
Armenia, and Azerbaijan to the south
and east. Georgia is a developing
country that has faced many challenges
head on, with the assistance of GFOA
and others.
Khosruashvili invited GFOA to attend
the 2022 Association of Finance Officers
of Local Self-Governing Units of Georgia
conference, and GFOA President Terri
Velasquez attended. The two-day
conference was co-hosted by Poland
Aid. More than 300 people attended,
including 67 mayors. Day one focused
on “Successful Local Self Government:
Challenges and Solutions,” and the
focus for day two was ongoing training
for municipality workers in fields such
as accounting, participatory budget,
and preschool education. Speakers
talked about best practices, the
importance of inventorying assets and
asset management, retaining municipal
workers, building human resource
competency through education and
training, and implementing new
accounting standards and autonomous
budgeting for local governments.
The conference included an awards
ceremony for finance professionals with
outstanding performance, including
the municipality with the best budget
performance and the municipality with
the best financial report. Discussions
about common issues and challenges
reminded attendees that we learn more
when we come together.
Madam President Salome
Zourabichvili, the fifth president and
the first female president of Georgia,
spoke about the importance of local
government finance and about the
country’s challenges and opportunities.
She ended her speech by saying true
democracy depends on strong, local
self-governing units.
Investing in international
relationships is an important function
of GFOA. Our investment in Georgia
many years ago helped establish the
GFA. Georgia is growing into a strong
democracy with financially sustainable
local self-governing units, and the GFA
has helped, along with the assistance of
the Mayors of Georgia, as it will continue
to do. What a difference a relationship
makes!
David Khosruashvili is the president and
chairman of the Association of Finance
Officers of Local Self-Governing Units
of Georgia. Terri Velasquez is GFOA’s
president and the finance director of the
City of Aurora, Colorado.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 13

IN BRIEF
FEDERAL UPDATE
What to Watch for in the
118th Congress
BY MICHAEL BELARMINO
January 2023 marked the beginning
of the 118th Congress. Let’s look at
what’s on the horizon.
Short-term
The first 100 days of a new Congress are
always critical in setting the tone for the
year. Having managed to flip control of
the House, the Republicans will need to
notch some legislative wins—although
that will be important for both parties
because 2024 is a presidential election
year, and both parties need wins for
the campaign trail. The start of this
session was rocky for Republicans,
who had a historically difficult time
electing a speaker—a vote that happens
on the first day of the session. Without
a speaker, the representatives-elect
were unable to take their oath and begin
official business for the first week of the
session. This doesn’t bode well for the
party, given their slim majority; for any
given piece of legislation over the next
two years, the House speaker cannot
afford to lose five votes. Otherwise,
the legislation faces defeat or would
require Republican concessions to
garner Democratic support.
Nonetheless, despite the
uncertainty around how productive
the divided 118th Congress might be,
there is still plenty for GFOA to focus
on in the first 100 or so days. For one,
GFOA’s Federal Liaison Center will be
making every effort to meet with each
of the 80-plus freshmen members.
Many are coming into office without
prior governmental experience or
background in public finance, so it is
critical to meet with them and their
staff to introduce them to the vital role
that public finance officers play and
what our priorities are.
Education will be needed in other areas
as well. The House flipping to Republican
control means that the composition of
committees will change. The powerful
House Committee on Ways and Means,
which has jurisdiction over many public
finance issues, will not only have a new
committee chairman, but there will
also be approximately ten new members
for the majority. GFOA will need to work
with these new committee members to
explain public finance priorities and why
these priorities are important to their
constituents. And even though control
of the Senate did not flip, a number of
senators retired or departed from the
Senate Finance Committee at the end of
the 117th—so we will need to meet with
new members on that side of Capitol Hill
as well.
These meetings will likely last well into
2023. And that brings us to the mid-term
legislative focus. While it would be ideal to
have our legislative priorities introduced
early on, it typically takes some time,
especially as sponsors and cosponsors are
sought and confirmed.
Mid-term
An effort that will hopefully support our
attempts to advance important pieces of
legislation will be finding opportunities
to add members to the House Municipal
Finance Caucus, one of the first requests
we will make in meetings with members
of the House. Because the caucus was
designed to be bipartisan, we are seeking a
Republican co-chair after the unfortunate
passing of Congresswoman Jackie
Walorski last year. Additionally, we will be
trying to bolster Republican membership
in the caucus.
Our first legislative priority is getting
tax-exempt advance refunding reinstated.
Until 2018, this critical tool allowed
states and localities to refinance existing
debt with the greatest flexibility, and
it resulted in substantial reductions to
borrowing costs. Unfortunately, the 2017
tax reform effort eliminated tax-exempt
advanced refunding and limited the
options for refinancing debt, which could
free up capital and be put to immediate
public works purposes. Without this
valuable financial management tool, state
and local governments will pay more in
14

interest in the future, a cost that will in
the end be borne by taxpayers.
But all the news isn’t bad, as
there have been several bicameral,
bipartisan bills introduced over the
last four years to reinstate tax-exempt
advance refunding. In fact, one of the
bills was included and passed by the
House in the 117th Congress as part
of infrastructure-related legislation
that was ultimately not taken up by the
Senate. We will look to our champions
once again to reintroduce legislation in
each chamber, help them to increase
the number of sponsors, and generate
enough support to convince leadership
to bring the measures to the floor.
GFOA’s second priority is increasing
the bank qualified/small issuer
exception. Bank-qualified bonds
were created as part of the 1986 tax
reform to encourage banks to invest
in tax-exempt bonds from smaller
governments that issue municipal bond
less often, and to provide municipalities
with access to the lower-cost borrowing
they need to provide services and invest
in schools, roads, bridges, and other
projects. Unfortunately, the cap set to
be considered as a small issuer is $10
million, an amount that hasn’t changed
since 1996. As you can imagine,
especially in our current inflationary
environment, $10 million does not get
you far as it used to for major projects.
There has been some progress on this
issue, as legislation was introduced to
increase the cap and tie it to inflation.
A bill to make these modifications was
introduced last year in the House, which
included it as part of infrastructurerelated
legislation that was not
ultimately taken up by the Senate. GFOA
will look to our champions once again to
reintroduce legislation in the House and
find bipartisan support. We will also
need to find a champion to introduce a
bill in the Senate, but we stand ready to
help them increase the sponsor list.
Another matter of importance is
the federal debt ceiling. It was not
addressed in the most recent omnibus
spending deal, passed in the final
days of 2022. But it has previously
been addressed through temporary
suspensions of the limit. Currently,
the debt ceiling is a bit less than
$31.4 trillion. With Treasury’s
announcement that this limit was
reached, they are now forced to
use “extraordinary measures” to
continue normal operations for some
period after that. We concentrate
on that expiration for a number of
reasons but primarily for watching
the Treasury’s purchase of State and
Local Government Securities (SLGS)
for some current refunding.
Other legislative priorities might
arise, as well. A number of provisions
in the 2017 tax reform effort, like
the cap on state and local tax (SALT)
deductions, expire at the end of
2025, so the Republican-controlled
House may try to make some of the
provisions permanent.
We will also monitor the Treasury’s
implementation of the Inflation
Reduction Act (IRA), although this is
something Congress has already done
its work on. GFOA will concentrate its
efforts on the rulemaking process to
ensure ease of application and access
to the environmental tax credits
for the public sector. And speaking
of monitoring implementation, the
Infrastructure Investment and Jobs
Act (IIJA) is still moving along with
many other programs preparing to go
through another round of funding in
the coming months. GFOA continues
to monitor this and will post current
funding opportunities via our IIJA
Notice of Funding Opportunity
(NOFO) Tracker.
Long-term
Looking out over the next two years,
GFOA will continue to focus on the
Financial Data Transparency Act
(FDTA). Despite significant efforts by
GFOA, our members, and other state
and local government organizations,
the FDTA was signed into law as part
of the National Defense Authorization
Act (NDAA) on December 23, 2022.
The FDTA mandates governments
to tag their financial information
using a machine-readable format.
The U.S. Securities and Exchange
Commission (SEC) is responsible for
enacting the data standards. Under
the Administrative Procedures Act,
the SEC is subject to congressional
oversight. To address the situation,
GFOA will rely on continued outreach
from our members as the rulemaking
process gets underway over the
coming months.
These mandates are set to be in
place in about four years (starting
from the date of enactment),
following the development of data
standards by departments of the
federal government, and more
specifically by the SEC for municipal
securities information. GFOA remains
concerned that this is a significant
unfunded mandate that places great
cost and administrative burdens
on governments and entities of all
sizes. Governments will likely have to
outsource this function or enable their
current systems to create this format
for the financial information used for
the Municipal Securities Rulemaking
Board’s Electronic Municipal Market
Access (EMMA) submissions.
Some changes that were made since
the original legislation was introduced
should be helpful to GFOA members:
• No new issuer disclosure
requirements are associated with
the legislation, which only seeks to
require the way in which data will be
submitted.
• GFOA and the issuer community
will have a seat at the table as data
standards are developed by the SEC.
• The SEC and other federal agencies
must be helped to understand the
impact rulemaking will have on
governments and governmental
entities. Your input will be needed
along the way.
There is a long road ahead as rules are
written and the taxonomy is developed
before governments will be able to fully
understand and implement these data
standards. GFOA will lead the charge
for issuers during what will be a long
and arduous process to best protect
governments and ensure the easiest
and least costly ways to comply.
Michael Belarmino is a senior policy
advisor in GFOA’s Federal Liaison Center.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 15

16

RETHINKING BUDGETING | THE DECISION ARCHITECT
The Decision Architect
How budget officers can reduce the impact of bias and noise for better decision making
BY JASON RIIS AND JARED PETERSON
rganizations benefit
from decision
architecture. Budget
officers can be the
decision architects of
local government by
building on four job
responsibilities that
allow them to reduce the
impact of well-known problems of bias
and noise in human decision processes.
Government leaders make decisions
for a living. With good decision-making,
they can greatly improve the lives of
their constituents and further their own
careers. But decision-making is messy.
It is often done by groups, so there are
conflicting points of view. It is usually
time constrained, so there isn’t time to
consider everything. There is always
uncertainty, usually more than we
realize. And it is done by humans,
so it comes with the myriad welldocumented
cognitive biases 1,2 and
inconsistencies (i.e., “noise”) 3 in
human thought.
Budget officers are positioned to
help government officials reduce the
negative impact of bias and noise in
decision processes. Helping people
avoid bias and noise is sometimes
called “decision architecture.” 4
Budget officers can be good decision
architects because they are likely to
possess four broad perspectives and
skill sets. Each of these can be further
developed through engagement with
the ideas of behavioral science:
The Budget Officer’s Four Job
Responsibilities as a Decision
Architect
Widen the option set:
The budget officer’s role in
budget preparation gives
them a bird’s-eye view on
the wide set of activities the government
must pursue. They can thus help
decision-makers see the big picture and
find a wider set of possible solutions.
Test assumptions:
The budget officer’s
examination of calculations
and projections gives them
a unique perspective on the assumptions
and uncertainties of project proposals.
They can thus help decision-makers
identify uncertainties and test
assumptions before overinvesting.
©2023 SCOTT ROBERTS C/O THEISPOT.COM
ABOUT GFOA’S RETHINKING BUDGETING INITIATIVE
Local governments have long relied on incremental line-item budgeting, in which last
year’s budget becomes next year’s with changes around the margins. In a world defined
by uncertainty, this form of budgeting puts local governments at a disadvantage,
hampering their ability to adapt to changing circumstances. As we all know so well, the
ability to adapt has become essential over the last two years—and will certainly remain
so for some time. The premise of the Rethinking Budgeting initiative is that the public
finance profession has an opportunity to update local government budgeting practices
with new ways of thinking and new technologies to help communities better meet
changing needs and circumstances. The Rethinking Budgeting initiative seeks out and
shares unconventional but promising methods for local governments to improve how
they budget, and how they embrace the defining issues of our time.
Find high-value options:
Budget officers see which
trade-offs are being made
and which ones may still
need to be considered. They can help
decision-makers choose highest-value
options.
Foster trust in the process:
Budget officer’s ethos of
objectivity (if not neutrality)
puts them in a position to
foster trust in good decision processes.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 17

RETHINKING BUDGETING | THE DECISION ARCHITECT
Responsibility 1
Help decision-makers see a wider option set
Budget officers have a great mental
model of government spending.
They can see the big picture as
well as the devil in the details.
They are able to see budgetary needs
that are being ignored (because they
have seen line items cut, or they see
them in budgets of other governments).
This mental model allows them to
help decision-makers see blind spots.
Decision-makers often narrow in too
quickly on specific ideas. Sometimes
they let the urgent be the enemy of the
important, and they miss glaring needs
and opportunities as a result. Budget
officers can help widen the view.
Establish the decision need: Budget
officers can help establish a decision
need, for example, by encouraging
decision-makers to develop rainy-day
funds. What will the government do
if there is a recession and tax revenue
declines sharply and unexpectedly?
What will they do if there are
emergency spending needs? The budget
officer can frame the problem and
present it in a timely manner so that
stakeholders feel the risk and urgency to
act now (risk communication). They can
show decision-makers that such a fund
can be created with reasonable effort by
showing that other municipalities have
managed to do it. 5,6
Reduce unearned power of defaults:
Humans tend to stick with the status
quo, or the “default,” when making
decisions. The budget officer has a
decision architecture opportunity by
ensuring that default options do not
get more priority than they deserve.
In budgeting, last year’s budget often
serves as the default that anchors
next year’s budget. This can backfire
in certain cases, such as when the
government needs to make budget
cuts or change the type of services it
provides to the community. 7 Zerobased
and priority-driven budgeting 8
are well-established techniques to
reduce the power of the default.
Avoid whether-or-not decisions and
find more options: Many organizations
find themselves making “whetheror-not”
or “go-no-go” decisions. While
simple decisions have obvious
appeal, research has shown that this
framing often artificially narrows
the option set. People fail to consider
other available options, and they fail
to consider the opportunity cost of
new programs. 9 Because of the sunk
cost effect, they may fail to consider
options to scrap or revise failing
programs. Decision architects can
help by encouraging consideration of
new options. This can include finding
bright spots 10 —programs or parts of
programs that have been successful—
and asking, “Might we instead
consider doing more of that bright
spot program?” Decision architects
can also help bring people together to
collaborate on option generation. For
expensive programs, it is often possible
to negotiate for lower-cost options if the
right stakeholders are brought in.
Bias vs. Noise, Explained
BIAS: Systematic pattern of deviation from rational decision-making.
Examples include present bias (the human tendency to focus on
immediate versus long-term considerations) and status quo bias (the
tendency to favor current options and not give new options a fair shake).
NOISE: Unrecognized inconsistency in judgment. Inconsistency may be
between judgments of the same person at different times, or between
judgments of similar options. Noise may also be between judgments of
the same option by different people who were thought to have similar
information and generally aligned interests.
“BIAS”
“NOISE”
Low consensus
(across people)
Low consistency
(within 1 person)
18

Budget officers can see the big picture
as well as the devil in the details.
©2023 SCOTT ROBERTS C/O THEISPOT.COM
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 19

RETHINKING BUDGETING | THE DECISION ARCHITECT
Responsibility 2
Help decision-makers test assumptions (and uncertainty)
Will a given program work?
People have difficulty
thinking about and talking
about uncertainty. We tend to
be overly certain that we are right. 11 We
make assumptions without realizing
it. We tend to speak vaguely about our
uncertainties. 12 And we make errors in
using data to compute probabilities. 13
To encourage a better incorporation
of uncertainty into government
decision-making, decision architects
can help stakeholders clarify, reflect
on, and test assumptions. No one has
a crystal ball, but decision architects
can help stakeholders be more realistic
about what they know and don’t know.
consider the possibility that they may
be incorrect? How can we get them to
“think again”? 14 Decision architects ask
good questions like “Could you please
explain how this works?” This question
alone has been shown to make people
more realistic. 15 And other approaches,
like the premortem, can help people see
their blind spots. 16
Collect and clarify assumptions:
Ideally, people would express their
beliefs in probabilistic terms. We would
say, for example, “I am 75% sure that
revenue will be between $9 million
and $11 million in fiscal year 2024.”
Instead, people prefer to say things
like “It’s very likely that revenue will
be around 10 million.” Where possible,
decision architects can help express
uncertainty in a quantitative manner;
but in practice, it can be hard to get
people to draw such fine lines. At the
very least, decision architects may be
able to push stakeholders to express
some assumptions. Are we assuming
that inflation will not accelerate? Or
that it will remain in the range of X to Y?
Are we assuming program compliance
will be above X%? That sort of thing.
Simply laying out assumptions can help
stakeholders incorporate uncertainties
into their decisions. This can help
reduce noise (i.e., inconsistency)
by creating a common structure for
expressing uncertainty.
Reflect on assumptions: Even
if decision-makers state their
assumptions, they may not reflect
on them. How can we help decisionmakers
reflect on assumptions and
©2023 SCOTT ROBERTS C/O THEISPOT.COM
20

Decision
architects can
help stakeholders
clarify, reflect
on, and test
assumptions.
The Decision Architect is the Finance Officer that Elected
Officials Need and Want
Catherine Tuck Parrish has over thirty years of local government
management and consulting experience. She conducts executive
searches for local governments and has hundreds of searches under
her belt. Here is what she is finding local governments are asking
for from their finance officers. You will see there are many parallels
between these requirements and the role of the decision-architect.
“Local government leaders need help with complex decisions they are
faced with. They need their finance leaders to be strategic partners in
these decisions by providing not only great data, long-term projections
and future impact, but also ensuring that the numbers tell a story
everyone can understand. There is also a need to provide clarity
about what today’s financial decisions might mean for all parts of the
community and the future. In order to be most helpful, finance leaders
must be trusted, understandable, and also help build consensus.”
A premortem invites decision-makers
to imagine that they had taken a certain
course of action and that it had not gone
well. They are then asked to reflect why
it might have not gone well. Starting
with the presumption of failure can help
people identify blind spots, question
the certainty of their own assumptions,
and better prepare to prevent possible
failures.
Test assumptions: Even the most
carefully scrutinized assumptions may
prove wrong when brought to the real
world. Decision architects can help set
up opportunities to test assumptions.
Companies test assumptions by
developing pilot studies. They often
create minimally viable products
and test them with customers to see
if the design assumptions translate
into positive customer sentiment and
adoption. Similarly, governments can
pilot test the assumptions of many
program options. For example, recycling
programs can be tested in specific
neighborhoods. If pilot testing is not
possible, we can look for comparable
cases. If a tax decrease is being
considered, we can examine results in
comparable jurisdictions that tried the
same thing.
Responsibility 3
Help decision-makers choose highest-value options
When program options are considered
by stakeholders, there may be
disagreement about whether
the program objectives are in line with
the government’s values and mission,
and whether they are worth the cost.
Navigating those considerations (and
accompanying disagreements) can
be supported by providing context,
encouraging the long-term view, and
helping people find common ground.
Provide common metrics, scales,
and reference points: Humans have
trouble with scale and quantity. We
tend to speak in the language of “big”
and “small,” not in terms of millions of
dollars spent or number of accidents
avoided, etc. And when we do speak
in numeric terms, we often lack the
context to know the meaning of that
number. Is a million dollars a high
price for this program? Is a 3% cut a lot
or a little? Are five accidents avoided
a lot? Decision architects can provide
additional comprehension support
by giving quantity comparisons.
Many approaches to doing this are
described in Making Numbers Count 17
and Innumeracy in the Wild. 18 Scales
and metrics can help reduce noise (i.e.,
inconsistency in judgment) by creating
a common structure for understanding
and expressing quantities.
Champion the long-term view:
Another major challenge with human
decision-making is the tendency to
focus on short term over long term
(sometimes called “present bias” 19 ).
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 21

RETHINKING BUDGETING | THE DECISION ARCHITECT
In government contexts, this tendency
can be exacerbated by the pressures
of short-term election cycles. Decision
architects can help decision-makers
focus on long-term considerations,
at least ensuring that they be
articulated, even if the pull of the
short term remains strong. There are
a few ways to do that, but we will focus
on one already used by many local
governments: the precommitment. 20
The local government decision-makers
commit to a responsible long-term
policy before being faced with tough
decisions that pit short-term gain
against long-term gain. An example is
a policy that limits the amount of debt
a government takes on or prohibits
back-loaded repayment schedules.
There might be pressure to take on a
disadvantageous debt arrangement
when a popular capital improvement
is on the table, but precommitting to
policies like those described help local
officials make the financially savvy
decision.
Deal with heterogeneous
preferences: Programs will not have
uniform impact on stakeholders.
Stakeholders do not have uniform
preferences or uniform information.
And individual stakeholders may
have inconsistent preferences (i.e.,
the problem of noise) and preferences
that change over time. Decision
architects must manage this challenge
by seeking multiple perspectives,
helping to identify fair ways to resolve
difference in preference, while still
ensuring that efficient options rise to
the top and the group is not hindered
by a few loud voices. To illustrate, the
budget could feature decision-making
tools that help reveal people’s full
range of preferences and give voice
to everyone at the table. One such
example that has been studied by
GFOA is Quadratic Voting. You can
read about Quadratic Voting and its
application to Nashville Metropolitan
government budgeting in this issue’s
article “Seeking Consensus.”
Responsibility 4
Create trust in the process
To effectively serve as decision
architects, budget officers will need
to nurture trust, both in their role and
in the decision process overall. GFOA
has emphasized the role of trust in
much of its ongoing work, including its
code of ethics. 21 Psychologist Susan
Fiske has characterized trust as a
function of warmth and competence, 22
while psychologist Jonathan Haidt
has emphasized perceptions of
fairness. 23 We suggest that these are
responsibilities of the budget officer
who seeks to nurture trust: warmth,
competence, and fairness.
Create trust through warmth: The role
of the decision architect is a peoplefacing
role, so getting face time matters.
“Hitting the pavement” creates trust
through warmth. Simply meeting with
stakeholders and departments regularly
will increase familiarity and reduce the
likelihood of friction (and unpleasant
surprises) at high-stakes moments.
Since some conflict is inevitable,
decision architects need specific skills
for managing conflict. How can we be
warm while challenging people, say
in the context of a budget discussion?
One underdeveloped skill is questionasking.
People generally like to talk, so
being asked a question is often seen as
a gift…if it comes with signals that you
are actually listening to the answer and
interested in what the person has to say.
Second, having to answer good questions
requires thought and has been shown
to get people to self-reflect on their own
positions and objectives. One study
showed that expert negotiators asked
more than twice as many questions as
novice negotiators. 24 Budget officers
can take a more systematic approach
to making other people feel heard and
understood by using tools such as Moral
Foundations Theory. You can read
more about Moral Foundations Theory
and a study conducted by GFOA of its
©2023 SCOTT ROBERTS C/O THEISPOT.COM
22

To effectively serve as decision architects, budget officers will need
to nurture trust, both in their role and in the decision process.
application to government finance
officers in the GFOA report “What’s Fair?
Understanding Political Polarization
with Moral Psychology.” 25
Create trust through competence and
capable processes: Decision architects
must be perceived as competent. Budget
officers will generally be perceived
as competent already, owing to their
specialized financial skillset, so they
aren’t starting from scratch. But it
takes a special effort to create trust
in the decision architect role and in
the overall decision processes being
promoted through that role. One
approach is to develop language around
the decision process and some agreedupon
principles, and then keep referring
to them and defending the process. An
example of this approach is described
in Thinking in Bets, 26 by behavioral
scientist and former professional
poker player Annie Duke. Explicitly
choosing on principles, she argues, can
improve decision-making since people
are prone to “outcome bias.” In poker,
that means making an unnecessary,
low-probability bet and winning against
the odds. These outcomes feel good,
but they create a dangerous belief in a
process that is bound to fail in the long
run. Championing the process, and not
just the outcomes, is the way to show
competence and earn trust.
Create trust through fairness: People
are sensitive to fairness. Perceptions of
fairness can include considerations of
how goods or outcomes are distributed—
that is, who gets what, and also by
how people are treated. Decision
architects can raise awareness of
distributive justice 27 by, for example,
developing measures of service levels
by neighborhood. But, perhaps more
in the decision architect’s control is
the perception of procedural fairness.
Was the decision process seen as fair?
Procedural fairness is more likely
to be perceived when the decision
is 1) in line with the evaluator’s
values and ethics, 2) based on good
information, and 3) not biased by the
self-interest and narrow perceptions
of the decision-maker. Transparency
is the key, as noted in another GFOA
publication, “What’s Fair? Exploring
the Behavioral Science of Justice and
Fairness.” 28 By making the decisionmaking
process explicit, you can
help stakeholders see that procedural
fairness has been maintained.
For more information on GFOA’s
complete set of research reports
on fairness and public finance,
please visit gfoa.org/fairness.
Conclusion
Human judgment and decision-making
are inherently limited. Decision
architects can help reduce bias and noise
in human decision-making processes.
Budget officers already assume the
role of decision architect through four
key responsibilities. We argue that
those decision architect responsibilities
can be defined and expanded. The
details of the role should be grounded
in behavioral science. Practitioners
in many industries and functions are
relying on behavioral science to identify
best practices for a range of roles. Budget
officers can expand their decision
architect role for governments by
researching, developing, documenting,
sharing, and executing best practices.
Jason Riis is the founder of Behavioralize
LLC, a behavioral science consulting firm.
Jared Peterson is a senior consultant at
Behavioralize LLC.
1
Kahneman, D. (2011). Thinking fast and slow. Doubleday
Canada.
2
Heath, C., & Heath, D. (2014). Decisive: How to make
better choices in life and work. Penguin Random House.
3
Kahneman, D., Sibony, O., & Sunstein, C. R. (2021). Noise:
A flaw in human judgment. Little, Brown Spark.
4
Johnson, E. J. (2021). The elements of choice: Why the
way we decide matters. Riverhead Books.
5
Heath, C., & Heath, D. (2010). Switch: How to change
things when change is hard (1st ed.). Crown Business.
6
R. C. B. (2021). Influence, new and expanded: The
psychology of persuasion (Expanded). Harper Business.
7
The choice architect: The myth of the neutral finance
officer. (n.d.). https://www.gfoa.org/materials/choicearchitect-gfr12211
8
Anatomy of a priority-driven budget process. (n.d.).
https://www.gfoa.org/materials/anatomy-of-a-prioritydriven-budget-process
9
Frederick, S., Novemsky, N., Wang, J., Dhar, R., &
Nowlis, S. (2009). Opportunity cost neglect. Journal
of Consumer Research, 36(4), 553–561. https://doi.
org/10.1086/599764
10
Heath, C., & Heath, D. (2010). Switch: How to change
things when change is hard (1st ed.). Crown Business.
11
Moore, D. A. (2020). Perfectly confident: How to
calibrate your decisions wisely. HarperCollins.
12
Tetlock, P. E., & Gardner, D. (2016). Superforecasting: The
art and science of prediction. Crown.
13
Heath, C., & Starr, K. (2022). Making numbers count: The
art and science of communicating numbers. Simon &
Schuster.
14
Grant, A. (2021). Think again: The power of knowing
what you don’t know. Penguin Random House.
15
Lawson, R. (2006). The science of cycology: Failures
to understand how everyday objects work. Memory
& Cognition, 34(8), 1667–1675. https://doi.org/10.3758/
bf03195929
16
Performing a project premortem. (2014, August 1).
Harvard Business Review. https://hbr.org/2007/09/
performing-a-project-premortem
17
Heath, C., & Starr, K. (2022). Making numbers count: The
art and science of communicating numbers. Simon &
Schuster.
18
Peters, E. (2020). Innumeracy in the wild:
Misunderstanding and misusing numbers. Oxford
University Press.
19
BehavioralEconomics.com. (2019, March 28). Present
bias. BehavioralEconomics.com | the BE Hub. https://
www.behavioraleconomics.com/resources/miniencyclopedia-of-be/present-bias/
20
BehavioralEconomics.com. (2019, March 29).
Precommitment. BehavioralEconomics.com | the
BE Hub. https://www.behavioraleconomics.com/
resources/mini-encyclopedia-of-be/precommitment/
21
Ethics is a matter of trust. (n.d.). https://www.gfoa.org/
trust
22
Fiske, S. T., Cuddy, A. J. C., Glick, P., & Xu, J. (2002).
A model of (often mixed) stereotype content:
Competence and warmth respectively follow
from perceived status and competition. Journal of
Personality and Social Psychology, 82(6), 878–902.
https://doi.org/10.1037/0022-3514.82.6.878
23
What’s fair? (n.d.). https://www.gfoa.org/fairness
24
Grant, A. (2021). Think again: The power of knowing
what you don’t know. Penguin Random House.
25
What’s fair? (n.d.). https://www.gfoa.org/materials/
whats-fair-2
26
Duke, A. (2019). Thinking in bets: Making smarter
decisions when you don’t have all the facts (Reprint).
Portfolio.
27
Distributive justice refers to the fairness with which
resources are distributed.
28
What’s fair? (n.d.). https://www.gfoa.org/fairness
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 23

Seeking Consensus
Navigating a crowded decision-making environment with quadratic voting and
how the Metropolitan Government of Nashville and Davidson County did it
BY MATT PREWITT, ALEX RANDACCIO, AND SHAYNE C. KAVANAGH
24

RETHINKING BUDGETING | SEEKING CONSENSUS
©2023 JON KRAUSE C/O THEISPOT.COM
Budget decisions today are often
made in an environment of high
conflict and low trust. This is not
surprising given that conflict is
up, and trust is down in the United
States, generally. The share of
people who think that most other
people can be trusted has declined in the
U.S. by about one-quarter over the past
few decades. 1 This has real consequences.
Seven in ten Americans think low trust
between fellow citizens makes it harder to
solve problems. 2 The good news is that there
is a desire to repair this problem. Six in ten
Americans think it is “very important” that
the level of confidence people have in their
fellow citizens be improved. 3
There are many causes of the decline
in trust. One cause with salience to local
government is the state of the institutions
in which our democratic discourse takes
place. Many institutions have not evolved
and adapted with the times. For example,
the simple “majority rule” vote system has
been at the center of American government
since the founding of the republic. 4 However,
the majority rule voting system can create
a polarizing, conflict-inducing dynamic.
This is especially true when complex,
controversial issues, like local governments
are increasingly required to deal with, are
oversimplified into a binary choice. This
is often the case in a local referendum but
is also often true in votes undertaken
by elected representatives—such as
when they vote yes or no on budget
proposals. The traditional majority rule
system forces people to pick a side and
discourages them from investigating
potential areas of compromise. 5
The result is that the system (e.g.,
government) loses legitimacy in the eyes
of those who lose the vote. It also misses
an opportunity to learn more about the
range of preferences that participants
have because their choices are reduced to
a small number of options (e.g., yes or no).
Local governments are the true
laboratories of democracy, making them
the ideal place to experiment with new
institutional forms designed to address
these problems. 6 In this article, we
propose the use of an alternative voting
system called “Quadratic Voting” (QV).
We will show how QV can outperform
traditional voting systems and how it can
be applied to budgeting decisions using
the Metropolitan Government of Nashville
and Davidson County, Tennessee, as a
case study. In budgets, there will almost
always be more proposals for how to use a
local government’s resources than there
are resources available. Thus, there is
high potential for conflict and, thus, high
potential for decision-making systems
that help manage conflict.
THE DECLINE OF TRUST
3 in 10
Americans believe most people
can be trusted (versus about 4
in 10 Americans 40 years ago)
70%
of Americans believe low
trust makes it harder to solve
problems the country is facing
6 in 10
Americans feel it is “very
important” to improve the level
of trust between fellow citizens
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 25

RETHINKING BUDGETING | SEEKING CONSENSUS
QUADRATIC VOTING VERSUS
TRADITIONAL VOTING SYSTEMS
In traditional voting systems—
sometimes called “one person one
vote” (1p1v)—participants are only
able to express the direction of their
preference for a ballot item (i.e., yes/
no). There is no way for participants
to express the magnitude of their
preference (i.e., they are not able to
express how strongly they feel about
any issue). This lack of nuance has
consequences. To illustrate, let’s
consider a few familiar 1p1v scenarios.
Tyranny of the majority.
Oftentimes, a decision-making body
must consider a proposal that is
important to a specific group of people.
For example, residents of a minority
neighborhood might want a new park.
However, the elected representative
for that neighborhood might have
difficulty getting support for the
proposal from a majority of elected
representatives, no matter how badly
the residents of that neighborhood
want the park. Many council members
may vote for other uses of funds. Even
if the other council members are not
opposed to the new park, a lack of
enthusiasm could doom the proposal to
failure in a competition for resources.
Squeaky wheel. 1p1v systems can
face the opposite problem in which
passionate minorities dominate the
decision-making process. Because the
voting system does not allow them
to express the magnitude of their
preference, the minority finds other
ways to do so, like filibustering the
deliberation process. Being the loudest
voice in the room imposes a cost on
the rest of the group; no one else can
express themselves while someone is
shouting.
Polarization. 1p1v systems create a
zero-sum game when groups of people
disagree. Decisions are structured
around winning and losing in battles
staged by the agenda-setter, rather
than identifying areas of consensus
and building compromise. In this
atmosphere, there is almost always
some group that feels like its voices
were not heard. This occurs in local
government budget discussions in
which groups are pitted against each
other in a win-lose competition for
resources.
In democracy and budgets, everyone
can’t always get what they want. But we
can make the discourse healthier and
more efficient by allowing participants
to swing the decisions they care about
the most, in exchange for giving up
some influence over decisions they care
about less. We can capture nuanced data
about people’s preferences and surface
compromises that 1p1v fails to realize.
We can do this with Quadratic Voting.
Quadratic Voting (QV) is an alternative
voting system that provides nuanced
information about people’s preferences.
Participants in QV can express the
magnitude of their preferences, giving
them greater influence over the issues
they care about the most. QV ballots
contain several issues, options, or
proposals on the ballot. Rather than
respond “yes” or “no” to each proposal,
participants allocate a fixed budget
of “voice credits” across the various
proposals to express their preferences.
For example, a council member might
be given 100 voice credits to express their
preferences between 60 budget proposals. 7
Casting one vote in favor of a certain
proposal costs one voice credit. However,
two votes for that proposal cost four credits,
three votes cost nine credits, and so on (see
Exhibit 1).
Thus, participants could allocate more
than one vote to their favorite proposals,
but doing so costs them an increasing
number of voice credits: The number
of voice credits required is the square
of the number of votes. The increasing
“cost” of voting more than once for the
same proposal discourages people from
devoting all their points toward their
favorite proposal. This and other features
of QV allow us to address the limitations of
1p1v that we described earlier:
• Tyranny of the majority: From our
earlier example, the council member
representing the minority neighborhood
could devote most or all of their voice
credits to the park proposal, which
would allow the proposal to fare better
than it would under 1p1v.
• Squeaky wheel. A passionate minority
can express their strong preferences,
perhaps reducing their need to disrupt
the decision-making process in other
ways (e.g., filibustering). At the same
We can make the discourse healthier and more
efficient by allowing participants to swing the decisions
they care about the most, in exchange for giving up
some influence over decisions they care about less.
26

EXHIBIT 1 | QUADRATIC VOTING:
CONVERTING VOICE CREDITS INTO VOTES
1 voice credit
4 voice credits
9 voice credits
1 vote
2 votes
3 votes
Each participant is given a budget
of “voice credits.” Voice credits
an be converted into votes.
Participants can vote more than
one for a given proposal, but it
costs increasingly more credits for
each vote for the same proposal.
time, QV forces them to internalize
the cost that their strong preferences
impose on the group. The increasing
cost of casting votes for a single
proposal prevents a minority from
wielding too much influence relative
to their numbers. Concentrating voice
credits on one proposal will have
limited impact without some support
from the rest of the participants.
• Polarization. The increasing cost of
casting votes for a single proposal
encourages participants to spread
their voice credits among different
proposals. This helps reveal
participants’ true range of preferences.
If decision-makers know the true range
of preferences, it is possible to identify
solutions that have the broadest
support among all participants. Put
another way, it is possible to go from:
A) an outcome where one side is happy
with the decision and the other side
is unhappy to B) an outcome where
most or all people are satisfied or at
least can live with the decision.
Let’s see how QV works in Exhibit
2. Figure A shows a blank QV ballot
along with the total number of voice
credits that a participant will have
access to (Figure A shows 25 credits).
Figure B shows a ballot casting one
vote for option three, two votes each
for options two and five, and four votes
for option four. Figure B also shows
the number of voice credits it costs
to buy each vote. You will notice that
our participant gets nine total votes
by spending all 25 voice credits as
depicted in Figure B. Figure C shows a
ballot casting five votes for option four,
which costs all 25 voice credits. Notice
that the voter in Figure B got more
overall say in the decision compared to
the voter in Figure C (nine votes versus
five votes) by concentrating votes a bit
less. This is how QV discourages the
most extreme positions.
We’ve seen how QV works in theory.
Later in this article, we will see
how it worked in the Metropolitan
Government of Nashville and
Davidson County. Before we get
to Nashville, though, we will
address another question that
might loom in the minds of local
officials: complexity. 1p1v is a more
straightforward system than QV. QV
might have theoretical advantages,
but might those be outweighed by the
practicalities of implementation?
Part of the answer comes from
information technology. When our
democratic institutions were first
developed, a secret paper ballot was
considered “cutting edge.” Today,
information technology interfaces
can automate the mathematics
behind QV and provide cues and
feedback to the participants to help
them participate in QV. For years,
the government of Taiwan has used
sophisticated tools like QV and other
technologies that facilitate group
decision-making at a large scale
(potentially thousands of people) to
augment public decision-making,
making them a leader in democratic
innovation. We can do it too.
We should consider how other, less
complex alternative voting systems
compare to QV. QV has important
advantages over other alternative
voting systems, which may justify
the added complexity. For example,
in Ranked Choice Voting (RCV),
participants can rank the proposals in
order of their preference. QV captures
the order of participants’ preferences
but also captures the relative strength
of preferences. For example, QV will
show the difference between a voter
who supports their first and second
choice nearly equally and a voter who
strongly prefers their first choice,
whereas RCV will treat these voters
identically. Knowing the strength of
preferences is critical for solving the
tyranny of the majority and polarization
problems we described earlier.
Another alternative voting system
many local governments have used is
“dotmocracy,” where individuals are
given “dots” (or points) to allocate to
as many or as few options as they like.
This is often experienced as “sticky dot”
voting, where participants are given
colored dots with adhesive backing
(stickers). The available proposals
are arrayed on a bulletin board, and
participants place their stickers next
to their preferred options. This is like
QV’s “voice credits,” except that one dot
translates into one vote in all cases.
There is no increased cost to voting
more often for a single proposal. This
means that dotmocracy experiences a
version of the “squeaky wheel” problem,
where people with strong preferences
for a given option can dominate the
voting by devoting all their dots to their
top choice. 8 QV avoids this problem by
imposing an increasing cost on loud
voices, encouraging participants to
provide an honest representation of
their preferences and identify possible
compromises.
We’ve seen the advantages that QV
has over other voting systems. Now let’s
see how QV played out in a Metropolitan
Government of Nashville and Davidson
County Council budget hearing.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 27

RETHINKING BUDGETING | SEEKING CONSENSUS
THE CASE OF NASHVILLE
In the pilot of QV in Nashville, Burkley
Allen, chair of the Finance Committee
of Nashville’s Metropolitan Council,
proposed a budget that revised the
mayor’s proposed budget based on
public input and the will of the council.
Traditionally, the council members
submitted proposed amendments and
then advocated for the items they care
about the most. However, the council
members could not provide more
comprehensive information on their
views about the other budget proposals
under consideration. There was not
enough time in committee or council
meetings to have a comprehensive
discussion about all options and hear
from all the council members.
Research suggests that seven
people is about the maximum size
for a group to deliberate effectively.
Further, the formal rules, procedures,
and scrutiny that go along with a
public meeting can impede effective
conversation. Nashville’s Metro Council
has many more than seven people 9
and is subject to the same rules and
scrutiny as any other local governmentelected
body. Hence, under normal time
constraints, it can be impossible to
reach a nuanced understanding of the
council’s preferences through traditional
discussion and debate. In previous years,
the council had tried “dotmocracy”
on some budget items. Each council
member was given 100 dots and asked
to use the dots to express how strongly
they supported each proposal. However,
the council experienced the “squeaky
wheel” problem we described earlier:
Members tended to place all their dots on
their top choice, leaving the budget chair
in the same situation as before. Allen felt
that without more nuanced information
about members’ preferences, her
proposal would be unlikely to be
representative of the council’s will—so
when she heard about QV through GFOA,
she convinced her colleagues to give it a
try for the 2023 budget.
When presented with the option of QV,
Chair Allen considered it a viable option
to better gather the information she
needed—not only members’ top choices
but also a ranked list of their priorities.
After completing the long process of
discussing and refining the proposed
spending options, council members
received a 10-minute briefing on QV, then
participated in an informal deliberative
poll. Each council member was able to
express their preferences across the
57 final options before the end of the
evening using an online Quadratic
Voting tool developed by RadicalxChange
(quadraticvote.radicalxchange.org).
Allen had the results that same night,
which were recorded publicly. Thanks
to QV, the council had a much clearer
understanding of what members’
priorities were—a crucial aid in what
tends to be a lengthy and unsatisfying
process.
Participants enjoyed QV and requested
it to be used again. Council member
Brett Withers stated: 10 “Really pleased to
see these results. I think the Quadratic
Voting was very helpful. It helps to
provide some objective measurements
for what is otherwise a pretty subjective
process…so I wanted to applaud [Chair
Allen] for bringing it forward.” Allen’s
budget recommendations, delivered
the next day, followed the QV results.
Is Quadratic Voting a
Binding “Vote”?
In Nashville, QV was not a
binding vote as a formal
council action would be.
Instead, QV was a tool for
facilitating and clarifying
conversation, much like the
“dotmocracy” exercise that
the council had tried earlier.
28

EXHIBIT 2 | HOW QUADRATIC VOTING WORKS
FIGURE A
Voice Credit Budget = 25
FIGURE B
Voice Credit Budget = 0
FIGURE C
Voice Credit Budget = 0
Votes
(Credits)
Votes
(Credits)
Votes
(Credits)
Option One
Option One
0
Option One
0
Option Two
Option Two
2
(4)
Option Two
0
Option Three
Option Three
1
(1)
Option Three
0
Option Four
Option Four
4
(16)
Option Four
5
(25)
Option Five
Option Five
2
(4)
Option Five
0
Total 10 (25)
Total 5 (25)
She noted that the results were largely
in line with her expectations, but that
having such a clear link between the
QV results and her recommendations
helped create a better sense of
legitimacy and participation. The
real measure of the value of QV for
Nashville is if the council plans to
use it again. And not only does Allen
recommend repeating QV for the
operating budget proposal next year,
but she is also suggesting expanding
the use of QV to other decisions, like
capital projects.
CONCLUSION AND NEXT STEPS
QV represents an opportunity for local
governments to evolve how decisions
are made. As the Nashville example
illustrated, QV holds the potential for
improving budgeting decisions by:
• Providing a more complete picture of
the participants’ preferences.
• Accommodating a diverse range and
many participants.
• Facilitating better decisions more
quickly than conventional discussion
and debate, especially where many
people and/or choices are involved.
QV will be most useful when there are
large numbers of people who need to be
part of the decision-making process and
where high-quality deliberation about
the decision is difficult or impractical
(i.e., too many choices, too many
people). If you would like to try QV in
your local government, it’s simple. You
can explore the free software tool to get
a feel for how it works. RadicalxChange
Foundation is available to support and
advise pro bono on how to structure
decisions and explain the process to
participants. Reach out through GFOA or
info@radicalxchange.org to learn more.
1
Interpersonal trust in the United States, 1972 to
2018. Our World in Data. https://ourworldindata.
org/grapher/interpersonal-trust-in-the-us
2
Trust and distrust in America: 2. The state
of personal trust. (2019). Pew Research
Center. https://www.pewresearch.org/
politics/2019/07/22/the-state-of-personal-trust
3
Ibid.
4
Though the structure of the U.S. government
does have systems designed to guard against
the “tyranny of the majority,” majority rule as
determined by win-lose voting is firmly at the
center. For example, votes in the U.S. Congress
and Supreme Court decisions proceed in this
manner.
5
Ripley, A. (2021). High conflict: Why we get
trapped and how we get out. Simon and
Schuster.
6
This is an idea expressed by observers of the
American systems of government, such as
Alexis de Tocqueville and Thomas Jefferson.
7
All council members would be given the same
number of starting credits.
8
We should note that dotmocracy can alleviate
the tyranny of the majority problem, so it
does have strengths. The flip side is that it can
accentuate the squeaky wheel problem.
9
Nashville has a total of 40 council members,
making it the third-largest city council in the U.S.
10
Quoted from the Metro Council public meeting
where QV was used, which took place on June
13, 2022.
Matt Prewitt is the president of RadicalXChange Foundation. Alex Randaccio is the technical
director of RadicalXChange Foundation. Shayne Kavanagh is the senior manager of research
for GFOA’s Research and Consulting Center.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 29

30

PUTTING ON A PROJECT FACE
Putting on a
Project Face
BY ROB ROQUE
©2023 HARRY CAMPBELL C/O THEISPOT.COM
The public sector sometimes
looks at “projects” as
strictly endeavors of
construction or technology.
Although this is partially
true, we have many other
opportunities to “projectize”
an organization. One might ask why an
organization would want to implement
more projects—which is a fair question.
But managing operations as a series
of projects can help an organization
complete tasks more efficiently and
with greater transparency. This article
will highlight potential opportunities
for using project management practices
to create successful outcomes in
organizational operations.
TYPICAL PROJECT
CHARACTERISTICS
Most people are familiar with this kind
of public-sector project:
Objective:
• Implement new ERP software
Scope:
• Financials
• Human resources
• Time entry
• Payroll
Schedule:
• 24 months from signing of contract
Budget:
• Professional services: $1.2 million
• Software license: $500,000
EXHIBIT 1 | PROJECT PARADIGMS FOR “UNCONVENTIONAL” PUBLIC-SECTOR PROJECTS
EXAMPLE 1
OBJECTIVE:
Completion of the annual budget
SCOPE:
• Operating budget
• Capital budget
DEADLINE:
Adopted by last day of fiscal year
EXAMPLE 2
OBJECTIVE:
Closing of the financial ledger and filing of
the annual comprehensive financial report
SCOPE:
• Government-wide financial reports
DEADLINE:
By first quarter of the new fiscal year
Studies of public-sector project
management seem to focus on large
technology and construction projects
or large projects that are sponsorfunded
but still focus on technology
and construction. Even articles on
project management principles in
the public sector seem to assume
that anyone who is interested in this
research is focused on technology and
construction. Unsurprisingly, searches
for “treating an organization’s budget
preparation process like a project” did
not yield many results. But there are
opportunities for other types of
public-sector processes to benefit from
good project management practices.
TWO EXAMPLES FOR AN
UNCONVENTIONAL PROJECT
Many processes can be treated as
projects in the public sector. This
article focuses on two examples: the
annual budget preparation process
and the year-end close and annual
financial reporting process. Both have
clear objectives, and each has a scope
to meet the objectives. Both have
schedules and deadlines. In short,
both have the primary characteristics
of a project. So, both should be treated
as projects (see Exhibit 1).
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 31

PUTTING ON A PROJECT FACE
The rest of this article will show ways
in which these two processes can benefit
by following the project paradigm.
IMPLEMENTING PROJECT
PHILOSOPHY
The budget process and the Annual
Comprehensive Financial Report (ACFR)
process are complex undertakings,
particularly if an organization’s
objective is to introduce new techniques
like implementing GFOA best practices
or a new Governmental Accounting
Standards Board (GASB) rule. To set up
these processes as a project, just follow
the same recipe your organization
probably already follows for a
construction or technology project.
PROJECT DEFINITION
A project is a temporary endeavor
undertaken to create a unique product,
service, or result. Projects typically
have a beginning and ending timeframe,
and they don’t typically progress
until the boundaries (such as scope,
schedule, and budget) have been
defined. This definition is important
because it governs tasks by scope. If, for
example, a government wants to develop
performance measures or implement
a GASB rule that is enacted over a
longer period of time, managing these
activities as a series of projects allows
the organization to assign resources to
deliberate tasks to achieve an outcome
(product). (See Exhibit 2.)
So, let’s draw some parallels between
the above examples and traditional
capital projects. Capital projects
are typically based on a long-term
vision such as the completion of a
building. The building project may
occur in phases, thus allowing the
organization to allocate resources to
the achievement of certain milestones.
Apply this model to an organization
that wants to implement GFOA
best practices as part of the budget
preparation process. As a whole, this
activity seems daunting. Tackling the
initiative in phases makes the tasks
manageable (see Exhibit 3)
CONCEPT
Organizations shouldn’t get started
on a project they’ve conceptualized
until they have a vision or definition
of the product. The concept stage also
outlines the general scope, budget, and
authorization needed to move forward.
In a classic project management
approach, the project charter would be
used to document these prerequisites,
but in general, it isn’t necessary to
establish a project charter each year to
form the budget or the ACFR—but the
prerequisites shouldn’t be overlooked.
Current trends in project management
require a customer to articulate a vision
of the product or outcome before the
project begins. The desired outcome is
rearticulated in pieces and adjusted, if
required, as the product components are
built. The public sector can use similar
techniques. For example, if the vision
is to implement a new budget practice
or accounting practice, the executive
in charge of the documents should be
able to articulate this as part of the
new process and have the patience to
rearticulate and make adjustments
throughout the assembly process.
ASSIGN THE PROJECT MANAGER
To ensure success, a taskmaster—or
project manager—should be assigned
to manage the activities. The project
manager is also responsible for
balancing scope, schedule, and
resources. Schedules, for example, are
very important in the public sector,
and they’re often mandated, as they
are for the budget preparation and
ACFR assembly process. A good project
manager will manage scope to balance
EXHIBIT 2 | ADDING TASKS TO THE PARADIGM
DEVELOP PERFORMANCE MEASURES
Phase 1: Define goals
• Phase 1a: Identify program inventory
• Phase 1b: Define goals and service level expectations for each program
Phase 2: Define performance measures
• Phase 2a: Identify what factors impact performance
• Phase 2b: Determine most appropriate measures
• Phase 2c: Determine how data will be stored
• Phase 2d: Develop format for sharing performance data
GASB 87
Phase 1: Asset assessment
• Phase 1a: inventory of assets
• Phase 1b: inventory of leases
Phase 2: Update accounting system
• Phase 2a: business requirements definition
• Phase 2b: accounting system configuration
• Phase 2c: reports development
EXHIBIT 3 | ASSIGNING PHASES TO THE INITIATIVE
CAPITAL PROJECT BUDGETING GASB RULE
Planning Revenue forecasting Planning
Design Budget requests Asset assessment
Construction Budget book preparation Update accounting system
Closeout Board adoption Audit
32

A project is a temporary
endeavor undertaken to
create a unique product,
service, or result.
©2023 HARRY CAMPBELL C/O THEISPOT.COM
schedule and resources. For instance,
the project manager may reduce scope
or implement the scope in phases to
accommodate resource availability.
Of course, many governments aren’t
big enough to assign a long-term project
manager for specific activities. In these
cases, the staff assigned the tasks
should maintain the project manager
mindset of balancing scope, schedule,
and resources while not losing sight of
the overall vision of the project.
In cases where organizations
do have larger staff, a trusted staff
member should be assigned to serve
as the project manager. If possible, the
executive owner of the project should
avoid this role and focus instead on
assisting the project manager by
providing the right resources and
helping with any business process
change or policy change that may
be required throughout the process.
Although it’s ideal for a project
manager to have experience with
the process, the role doesn’t require
an expert. What’s crucial is that the
project manager is a trusted individual
who can manage tasks effectively.
STAKEHOLDER PARTICIPATION
The Project Management Institute
(PMI) defines stakeholder
management as a key ingredient
for project success. Collaboration
methodologies vary and can consist
of a single representative team of
stakeholders or a group of teams that
represent various processes. The
key is to select the methodology that
fits your environment—just don’t
avoid it. A project void of stakeholder
participation will collapse.
GFOA Consulting follows a process
that was based on project experience
that works to get a diverse group of
stakeholders involved early in a
project. The process involves forming
various stakeholders into functional
groups that are consulted regularly
including being asked for feedback
about the development of the project
plan. Although individual team
members may change, the functional
team concept should continue as a
resource to the organization and any
pertinent projects.
PROJECT FORM
Successful projects are managed in
stages that are marked by milestones.
Tasks that are key to completing the
project are defined as work breakdown
structures (WBS). The WBS groups are
typically assembled in a project plan
such as Microsoft Project in what is
usually referred to as a waterfall plan.
Waterfall plans are useful because they
show the order of WBS to be completed.
WBS elements in the plan may be
assigned phases, tasks, activities,
resources, and dependencies. The
benefit of viewing a project this way is
that it forces a project manager to think
of the major tasks and the resources
required for completing each task. After
going through the WBS exercise, many
organizations will find that they don’t
have enough resources to complete the
project. In these cases, a more iterative
approach may be warranted. In recent
years, PMI has been combining the
waterfall and iterative approach to
project management in a more flexible
Agile format, in response to the tension
between complex projects and limited
resources.
BEING AGILE
Agile approaches to project management
were born from the software industry,
and its basic premise is that the process
serves the customer. The product is built
in iterative steps, with the customer
validating the development. Iteration
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 33

PUTTING ON A PROJECT FACE
TRANSPARENCY
It’s important to maintain transparency
throughout the project process. Many
software applications provide project
dashboards, or organizations can build
them relatively cheaply with office
productivity tools or online applications
such as Microsoft Teams and Google
Sheets. Organizations become less
anxious about a process when progress
is being reported regularly. Effective
dashboard reporting also reduces
project management overhead related
to repeated requests for project updates.
Most importantly, communication is a
key public-sector best practice and is
established as an important Financial
Foundations pillar.
RETHINKING OPERATIONS
Future articles will focus on the
concepts in detail and the tools that can
be used to facilitate the process. How
is a finance officer going to be able to
manage these large tasks? By adopting
a project management mindset. This
article has introduced the concepts of
project management and the potential
efficacy of project management
methodology applications for publicsector
operations. Future articles will
focus on the concepts in detail and the
tools that can be used to facilitate the
process.
TAKEAWAYS
• “Projects” shouldn’t be viewed only as
construction or technology endeavors.
• Overwhelming tasks are manageable
when treated as projects.
milestones are defined by the amount
of work a project team can complete
within a certain time frame. Daily
check-ins—known as scrums—are used to
monitor progress and make adjustments.
The stages of the product are shown
to and verified by the customer and
stakeholders at defined milestones.
Similar techniques can be used for nontechnology
projects like assembling the
budget and ACFR documents.
Consider the executive owner as
the chief customer. The departments
assembling the data during the processes
are considered project team members
that are responsible for completing
certain tasks within a specific
timeframe. The timeframes and
activities for each time frame can be
defined early in the planning stages
when the amount of effort required and
the amount of effort an organization
can provide are defined. The project
manager is responsible for establishing
regular progress meetings and
managing any hurdles the project team
encounters. There are many ways to
implement Agile principles; however,
PMI recommends using the Agile
tools that best fit your organization or
project. This is defined as determining
your ways of working (WOW).
• Complex projects and limited
resources can be balanced using Agile
project approaches.
• No effort will be successful without
good leadership and collaboration.
Rob Roque is the technology services
manager for GFOA’s Research and
Consulting Center.
1
Many of the practices described in this article are based on
practices prescribed by the Project Management Institute
(PMI). PMI has developed a set of international standards
that organizations follow to complete successful projects.
In this article, the PMI standards have been reconciled with
GFOA best practices whenever possible.
2
A Guide to the Project Management Body of Knowledge
PMBOK Guide, 2017.
3
PMI refers to this adaptation of project management
methodology as “Disciplined Agile.”
4
gfoa.org/special/financial-foundations#pillar-2
©2023 HARRY CAMPBELL C/O THEISPOT.COM
34

FINE(ance)
Fridays
This podcast series takes listeners
This podcast series takes listeners
“beyond This podcast the numbers” series takes and listeners
dives into
“beyond the numbers” and dives into
“beyond how public the finance numbers” professionals and dives got into got
how public finance professionals got got
to how to where public they finance are are today. professionals These are are got got
to to where they are are today. These are are
to real to where and honest they are are conversaaons today. These about are
are
real and honest conversaaons about
hardship, real and honest sacrifice, conversaaons and triumph.
about
hardship, sacrifice, and triumph.
hardship, sacrifice, and triumph.
Season Two
Streaming
Season Two
Now
Streaming Now
Listen Listen to to get get and and subscribe subscribe to to
gfoa.org//neance-fridays
to GFOA GFOA wherever wherever you you
gfoa.org//neance-fridays
get get get your your podcasts. podcasts.
Listen and subscribe to GFOA wherever you get your podcasts.
gfoa.org//neance-fridays
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 35

Opening Doors
to Opportunity
The Greater Cleveland Regional Transit Authority creates
a successful disadvantaged business enterprise program
BY CARL KIRKLAND AND KAY SUTULA
36

OPENING DOORS TO OPPORTUNITY
©2023 MICHAEL AUSTIN C/O THEISPOT.COM
There are many alarming
stories about prime
contractors failing to
pay, or underpaying,
disadvantaged business
enterprise firms (DBEs),
or of prime contractors
failing to perform or to submit proper
documentation. The Office of Business
Development at the Greater Cleveland
Regional Transit Authority (GCRTA)
wanted to take a different approach to
increase the number of qualified DBEs
it works with, expand their areas of
expertise, and help them be successful
subcontractors.
To do this, the Office of Business
Development (OBD) focuses on five
areas of concentration:
1. Certification, eligibility, and
compliance
2. Contract compliance and monitoring
3. Goal setting
4. Outreach
5. Small business participation plan
CERTIFICATION, ELIGIBILITY, AND
COMPLIANCE
Once a DBE firm completes the Ohio
Department of Transportation Uniform
Certification Application submission
form and the DBE eligibility has
been reviewed, the OBD receives the
information and plans an onsite visit
with the owners of the firm. They
conduct a desk audit, which includes a
review of products, equipment, and any
machinery.
The OBD also performs onsite visits
with its current DBEs, building a
good relationship with the firms and
checking to see if they have expanded
their expertise. While most of the
application process is handled within
the Department of Transportation, OBD
staff conducts other DBE firms to provide
support—this includes education about
the entire program, including ownership,
eligibility, and the authority’s process,
which includes contract opportunities,
procurement, and engineering processes.
CONTRACT COMPLIANCE AND
MONITORING
Once a DBE is selected for a procurement,
OBD works closely with documentation
and with the Greater Cleveland Regional
Transit Authority project manager
to monitor the prime contractor’s
compliance. OBD staff will travel
unannounced to a job site—at least twice
a week—to count the number of workers
on the job site and compare their count to
the project schedule log, ask workers for
a paystub or proof of income, and ask the
foreman for information about workforce
utilization. OBD staff will review the
prevailing wage received by workers
against the Department of Labor’s wage
schedule. If there are any discrepancies,
the authority will report this to its project
manager, and payments to the prime
contract will be stopped until the workers
receive the required backpay. This work
is handled by a staff of four, including
the director, so weekly meetings on the
progress of each project are vital.
? WHAT IS A DBE?
The Federal government defines a DBE as a small business that must
be at least 51 percent owned and controlled by one or more “socially
and economically disadvantaged” individuals. The management and daily
operations of the business must also be conducted by such individuals.
Federal regulations presume that the following groups are “socially and
economically disadvantaged”: African Americans, Hispanic Americans,
Portuguese Americans, Native Americans, Asian-Pacific Americans, Asian-
Indian Americans, women, and any other individuals found to be socially and
economically disadvantaged by the Small Business Administration (SBA).
Source: Greater Cleveland RTA 1
These measures are necessary for
various reasons. For example, prime
contractors have at times paid workers
the wage required where they live
rather than the prevailing rates of that
region, as required by the GCRTA. The
authority’s OBD staff need to ensure that
the DBE is receiving the correct payments
and, if not, hold the prime contractors
accountable. Once the prime contractor
has verified this by submitting certified
payroll reports, invoices, and compliance
reports, and DBE payments are
confirmed, the project can then continue.
GOAL SETTING AND CHANGING
THE CULTURE
Procurements of $25,000 and above
are reviewed for a DBE participation
goal, which encompasses all certified
DBEs that are ready, willing, and able
to perform. The prime contractors
receive the DBE goal with the project
information, which is sent in a mass
email to all available DBEs. Once a
pre-bid conference is held virtually,
with all prime contractors and DBEs
present, procurement and the project
manager review the project. At that
point the OBD asks the DBEs to address
the audience and explain how they
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 37

OPENING DOORS TO OPPORTUNITY
can perform the tasks the contract
requires, encouraging and helping the
prime contractors identify DBEs that
are available to participate. The OBD
also tracks which DBEs attend and
participate in these virtual pre-bid
meetings.
When submitting its proposal, the
prime contractor identifies which
DBEs will be part of the project. The
DBE is required to submit an affidavit
along with the project proposal, as a
letter of intent ensuring that the DBE
percentage goal will be met with a good
faith effort. If a prime contractor can’t
find a DBE, it can contact OBD staff,
who will help identify subcontractors.
If a prime contractor is selected with
no DBEs identified in the proposal, OBD
will send a certified letter regarding
their non-compliance. At that point,
the prime contractor has three
business days to comply with the DBE
goal and identify certified DBEs to
work on the project. If the OBD receives
a response, it issues a letter of intent
and must receive the DBE affidavit
within the specified timeframe. If the
prime contractor does not adhere to the
timeframe, it is ruled out for the project
because of non-compliance, and the
next contractor in line will be selected
for the project.
When a project gets underway, the
project manager, OBD staff, other
applicable staff from GCRTA, the prime
contractor, and subcontractors (DBEs)
hold monthly project meetings where
issues and concerns are addressed,
bottlenecks are identified, and, if a
project is off schedule, a plan is put in
place to get it back on track. If a prime
contractor isn’t paying the DBEs,
payment to the prime contractor can be
Greater Cleveland Regional Transit Authority
withheld until the problem is resolved.
If the prime contractor remains noncompliant,
the authority’s project
manager can shut the project down
completely.
Strategic Plan
Carl Kirkland is director of the Office of
Business Development for the Greater
October 2020 Cleveland Regional Transit Authority.
Kay M. Sutula is director of the Office of
Management and Budget for the Greater
Cleveland RTA.
The Greater Cleveland Regional Transit Authority’s Disadvantaged Business
Enterprise (DBE) program is designed to help ensure that DBE firms have
a level playing field and equal opportunities to receive and participate in
federally assisted contract opportunities.
AN OVERVIEW
The Greater Cleveland Regional Transit Authority (GCRTA) Office of Business
Development (OBD), which runs the program, promotes, and encourages the
inclusion of small, women, and minority owned businesses in RTA contracts.
OBD’s primary mission is to engage, support, and assist the local small and
disadvantaged business community, and to help ensure that DBE’s have fair
and representative participation in procurement opportunities at RTA and
within the community-at-large.
RTA uses contract-specific DBE goals to meet the portion of its overall DBE
goal that isn’t projected to be met using race-neutral means, and it can only
establish goals on contracts that have subcontracting opportunities. A DBE
goal doesn’t have to be established for every contract, and goals are adapted
to reflect the circumstances of each contract (such as, type and location of
work, availability of DBEs to perform the work, and projected subcontract
dollar amount or percentage of work available to DBEs).
PROGRAM ELIGIBILITY
The DBE Program was established for companies owned and controlled by
people who are considered socially and economically disadvantaged under
federal regulation 49 CFR Part 26: women; Black, Hispanic, Asian-Pacific,
Subcontinent Asian-Pacific, and Native Americans. 2 A company that is, among
other things, 51 percent or more owned (individually or in any combination) by
individuals from these groups may be eligible for certification as a DBE.
Businesses owned by people who aren’t members of one of these groups
may also be eligible, provided they can establish their "social" and "economic"
disadvantage. This is determined on a case-by-case basis.
38

Our calendar is...
Our calendar is...
FULL
GFOA recently added dozens of webinars, eLearning events, and
GFOA recently added dozens of webinars, eLearning events, and
in-person trainings to its 2023 events calendar. Browse the calendar
in-person trainings to its 2023 events calendar. Browse the calendar
now for opportuniies to expand your educaaonal journey.
now for opportuniies to expand your educaaonal journey.
gfoa.org/events
gfoa.org/events
Course topics include:
Accounnng ... Asset
Course topics include:
Management ... Budgeeng ...
Accounnng ... Asset
Debt Management ... Fiscal
Management ... Budgeeng ...
First Aid ... Revenue ... Treasury
Management Debt Management ... Technology ... Fiscal ...
and First more! Aid ... Revenue ... Treasury
Management ... Technology ...
and more!
1
https://www.riderta.com/dbe#FAQ
2
https://www.ecfr.gov/current/title-49/subtitle-A/part-26?toc=1

BYE-BYE, BOSS
Bye-bye, Boss
Why good employees leave and what to do about it BY KATE ZABRISKIE
“I can’t take it anymore!
We’re short-staffed, I’m killing
myself to hold it together,
and nobody says thank
you, so goodbye! Life is
too short for this. I can
work somewhere else.”
“I was doing just fine working
from home. Now they’re making
us go back. Call me crazy, but
spending three hours in the car
doesn’t excite me. I’m updating
my resume this afternoon.”
“I’m not passionate about this
place. We’re all about stuff I don’t
care about, I don’t connect with
my manager, and the pay isn’t that
great. I need to find a better fit.”
Thoughts like these happen many
times every day in organizations
large and small. While a certain
amount of turnover is healthy
and normal, when an employer
hemorrhages staff, it can take
years to recover. And let’s face it,
retention is tough in many places.
While you can’t make people stay,
you can take some critical actions
to address the main reasons
people say sayonara, so long,
and see you later.
GOODBYE REASON ONE
Employees want a better
relationship with their managers
If you haven’t done a good job cultivating
a good relationship with your direct
reports, today is the day to start.
Evaluate your behavior. Would you
want to work for you? Would anyone
else? Look for patterns. If people
don’t stick around and they don’t cite
another plausible reason for their
decision, guess what? It’s probably
you. You never hear from any of them
after they depart? It’s definitely you.
Get honest with yourself. Are you a
yeller? Inconsistent? Punishing? Selfcentered?
Uncommunicative? It’s time
to get to work. Identify the behaviors
that would cause someone to leave
and stop doing them. Next, identify
the behaviors that will encourage
someone to stay and start doing those
things. Needing to be a better manager
is a simple diagnosis with a hard
prescription. If you don’t know how to
get better on your own, take a class,
read some leadership books, craft an
action plan, hire a coach, or pursue a
combination of these actions.
©2023 ROB DOBI C/O THEISPOT.COM
40

FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 41

BYE-BYE, BOSS
GOODBYE REASON TWO
Employees are bored or
no longer challenged
While people do outgrow jobs, and
sometimes there is nowhere to move
them, you can solve this problem.
If people can do the job and become
restless, look for special projects,
cross-training opportunities,
and other extras. At a minimum,
that extra attention should slow
their departure. If the problem is
recurring, ask yourself what kind
of person would be right sized for
the position, and consider hiring for
those attributes the next time.
GOODBYE REASON THREE
Employees want a better
work-life balance
It’s called a job, not purgatory. While
certain people live to work, most
people want some semblance of a
life outside of work. Ask yourself if
you’re running a sweatshop. Does
everyone need to be in the office
from nine to five Monday to Friday?
If not, a little flexibility can go a long
way toward building loyalty and
making a job attractive. Next, think
about measuring people based on
output instead of the hours worked.
If employees must type on a keyboard
a few times to satisfy some sort of
monitoring software, you’re most
likely not endearing yourself or your
organization. What? You don’t trust
them to do their work? Then here’s a
simple answer for you: anyone who
needs to be micromanaged probably
shouldn’t have been hired in the
first place.
GOODBYE REASON FOUR
Employees don’t connect with
the organization or its purpose
Not every organization touches the
heartstrings, but every organization
should tell its story in a compelling
Smart managers
realize the cyclical
nature of retention, and
they do what they can
to minimize goodbyes
in good times and bad.
way. If it’s not a story about the
organization itself, perhaps it’s
a connection to the role. Still
nothing? If what your organization
does isn’t setting the world on fire,
think about other selling points.
Could it be you have a warm and
inviting family atmosphere? Are
you a great training ground for
something else later down the road?
Can employees stop thinking about
work the minute they walk out the
door? With a little bit of time and
effort, you can find a meaningful
story for almost any organization.
GOODBYE REASON FIVE
Employees can get more
money elsewhere
As the saying goes, you get what you pay
for. So, if you’re paying 1983 salaries,
why are you surprised when people
leave? They can do better elsewhere.
Nothing personal—it’s just business. If
you pay below-average wages and have
nothing to balance the shortfall, you’re
going to lose people. You don’t think the
job is worth more money? That’s too bad
because your competitors do, and you
lose. Stay aware of what’s happening in
your industry, your market, and so forth.
Also, don’t only offer money when people
let you know they’ve gotten another
offer—at that point, it’s often too late.
Economies fluctuate. Sometimes
the market favors employers, and other
times employees hold a more favorable
hand. Smart managers realize the
cyclical nature of retention, and they do
what they can to minimize the goodbyes
in good times and bad. What do you need
to do differently?
Kate Zabriskie is president of Business Training Works, Inc., a Maryland-based talent
development firm.
42

Help us recognize public finance
HEROES
GFOA’s Hero Award recognizes finance
officers who have demonstrated
extraordinary accons beyond their normal
duues to benefit their communiies.
Nominate a hero today!
gfoa.org/hero-award
Nominaaons accepted through March 31.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 43

44

PUBLIC FIGURES
Public Figures
Why communication
and good interpersonal
skills are essential for
public finance staff
A public budget is a means of communicating community priorities
and a plan for guiding public administrators in executing discretionary
decision-making and undertaking practical means for getting results.
©2023 MICHAEL AUSTIN C/O THEISPOT.COM
BY SANDRA EMERSON
Several decades of teaching
in a Master of Public
Administration program,
where my students were
typically employed in
local, regional, and state
government, have made
two things evident. First,
budgets are not clearly communicating
community priorities—citizens and local
legislators look at the reams of pages that
comprise budgets and are hard pressed
to discern what this document is trying
to communicate. Second, it is neither
obvious nor common sense just how staff
should communicate the complexities of
public budgets to a wide array of readers
who vary significantly by age, education,
and interest.
This experience has given rise to two
emerging realities, which dovetail with
GFOA’s Rethinking Budgeting initiative.
REFRAMING THE BUDGET DISCUSSION
In The Public Administrator's Companion:
A Practical Guide (see sidebar), we
recommend that practitioners begin by
systematically exploring what the public
knows and wants to know about city
expenditures and consequences. Most
importantly, consider who the audience
is for budget discussions. Unlike a
classroom situation in which participants
are roughly the same age with like
educational experiences, the public looks
more like a worship service with vastly
different educational backgrounds and a
wide range of ages. We are not suggesting
hymns and responsive readings, but
that less text and more graphics reach
a broader, more diverse audience. In
addition to who is in the audience is the
question of why they are in the audience
in the first place. What is the objective
of this public budget meeting? Is the
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 45

PUBLIC FIGURES
objective to “educate the public about
the budget” or to educate the finance
staff about the public’s understanding
of budget priorities, values, and issues?
What does the public need to
know versus what is “nice to know”?
Considerable space and time are
dedicated to discussing and describing
revenues. While this is an obvious topic
regarding budgets, it is tangential. The
decisions about what the taxes are, what
the rates are, who collects taxes, where,
and when are not up for discussion
during the budget cycle. Revenue is
at best a description of what is, not a
decision to be made.
The budget discussion is about how
to spend the money we have on the
goods and services that are important
to our community. In the late 1950s,
scholar Richard Musgrave suggested
that public budgets were like household
budgets, with some notable differences.
Our students rarely indicate that their
households have a budget. Instead, they
extensively use credit cards to account
for expenditures and are less likely
to “plan” expenditures than to “shop
efficiently” to spend the least amount on
what they want and need. The citizens’
model for economic decision-making
seems to be “shopping.” Consequently,
they are comfortable with comparing
this brand with another, or this period
of time’s expenses with a prior period.
For a variety of reasons (too numerous
to itemize in this short article)
comparing one city’s services to those of
another will be fraught with errors and
misunderstanding.
BY THE BOOK | THE PUBLIC ADMINISTRATOR’S COMPANION
WHAT ARE THE CONNECTIONS?
But some basis for comparison tends
to drive citizens’ discussion and
understanding of the budget. This is
the challenge. Against what standard
should a jurisdiction account for public
safety services, quality of life, and
infrastructure maintenance? There is
no simple or easy answer, and this is
the crux of what confounds the budget
discussion. Given what the public pays in
taxes, is this budgeted level of service the
best residents can expect? To find this
answer, one needs to delve deep into the
public expression of the services it wants
and the level of performance it expects.
Government outputs and outcomes
that arise from public spending are
loosely tied together to public budget
documents or discussions. Unlike
shopping, where one can unambiguously
link what is gained and what is spent,
the link in public budgets between
benefits and costs is elusive and
opaque. This unavoidable reality may
give rise to public concerns about
being transparent and ethical in the
ways jurisdictions or public agencies
operate. Therefore, an important area
for the finance analyst is performance
measurement. Some performance
measures may be directly related to the
government entity’s strategic plan or
related to workload measures to monitor
operations and staffing needs. Whatever
the performance measurements are and
however they are authorized, the link
between what is provided and what it
costs will remain an important part of
the finance agenda.
Readers will find a more detailed discussion of public finance
in the broader context of public administration in The Public
Administrator’s Companion: A Practical Guide (Second
edition), by Sandra Emerson, Kathy Van Ness, Georgianna
Streeter, Linda-Marie Sundstrom, and Parker G. Emerson.
(Waveland Press, 2023). The Public Administrator’s Companion
examines the most important elements of public administration,
helping readers understand how government works in
ways that are useful for both students and practitioners of
public administration. The book discusses governmental
structure, human resources, and public funding. It delineates
administrators’ actions in strategic planning, consensus building, budget development,
performance measurement, and public policy assessment and implementation.
For example, the discussion notes
for the Claremont, California, budget
development timeline for 2022 to 2024
reads:
In January, the city (Claremont) began
a public engagement campaign to gather
community feedback from residents and
businesses on city council priorities. Staff
and consultants facilitate three community
focus group meetings and conducted a
community survey that asked participants
for their opinions on city programs and
services, priorities for the city council, and
suggestions for improving the city and its
operations.
This is an example of defining why
the audience has been assembled. They
are to (1) provide information about city
services and programs, (2) provide their
perspective on the city’s priorities, and
(3) make suggestions about improving
operations. Isn’t this redundant? Doesn’t
the city know what its services and
programs are? Hasn’t the city council done
its job and set city priorities? Aren’t the
program manager’s improving program
processes and operations? Yes and no.
From the perspective of city government
and administration, they are doing, or
have done, each of these tasks. What is
missing is how residents and businesses
understand the city’s programs. For
example, citizen comments included:
• Where is the traffic signal at the
intersection of the main road and side
street leading to our local elementary
school?
• Why does it take so d#!n long to get the
city to repair a traffic light?
• I called the police department months
ago and told them the streetlight on my
block wasn’t working and it still hasn’t
been fixed!
• I called the police yesterday about the
vagrant asleep in front of my store. The
vagrant left after the police came but
he is back again today. Why haven’t the
police kept him away?
The residents’ experiences with the
program or processes of city government
in these cases are substantively different
from the experiences of the city’s staff,
public safety officers, and administrator.
There are longstanding processes and
rationale for how the city operates, but the
reason for the focus group meeting was to
46

©2023 MICHAEL AUSTIN C/O THEISPOT.COM
understand the public’s perspective,
not to rationalize or justify city practices.
The surveys and focus groups were to
educate and inform the finance staff,
not the public.
This brings us to our next observation.
What exactly is a focus group, what survey
was conducted, by which city employees,
and of which residents? How might a
city spokesperson respond to a resident’s
concern that “no one asked me”?
WE NEED MORE TOOLS
The need for and use of qualitative and
quantitative means of measuring public
opinion is not something the public
sector has fully embraced. Rarely do
texts in public administration or public
finance raise the issue of marketing
public services and programs. In part,
marketing and public services are two
concepts that are rarely found in the
same sentence. In addition, legislators
have largely served as the liaison
between the public and government
entities. The idea that finance staff
should be out among the residents
engaged in focus groups or surveys has
not been embraced, and finance staff
often say this is not their job. No doubt.
But writing a document that informs
the public about how its money is
being used is the job of financial
administrators and their staff.
The mandate to communicate
with legislators and members of the
public demands a broader array of
tools. Public finance analysts need to
be skilled communicators who have
an understanding of psychology,
marketing, language, and cultural
diversity. Beside spreadsheets, public
finance staff need to be skilled in writing
narratives, developing professional
presentations, and drawing persons into
conversations rather than talking at the
audience and providing “expertise.”
Getting the data about the public’s
perception is part of the challenge.
Interpreting what the data means and
how it identifies gaps in understanding
is the more important element of
sharing budgets with those who are
generally “budget-illiterate.” Once
there is evidence of where the gaps in
understanding are, there needs to be a
strategy for narrowing them.
Public finance analysts need to be skilled communicators
who have an understanding of psychology, marketing,
language, and cultural diversity.
This means training and educating
the community, and it also means
having finance experts learn to
communicate to the public in a manner
that is best geared to what citizens want
to know. Too often the response to the
public’s lack of knowledge is to educate
them to be amateur finance analysts.
Typically, this approach does not end
well. This means that how one has a
conversation about the local budget is
more critical for including the public
than focusing on the conversation
about revenues and expenditures.
Finally, the specialized language and
math employed in the budget need to be
simplified and summarized so it can be
better understood. We have spent time
in more than one class explaining how
a tax (Social Security, Medicare) can
be labeled in a budget as a benefit. The
students assume that either they don’t
understand what is meant by “benefit”
or that we don’t understand what a “tax”
is. To an expert in finance, this is so
obvious that it is not worth mentioning,
but it is just this gap in understanding
that confounds meaningful inclusion
of the public in budget discussions. One
should not assume that these gaps are
limited to students. We have watched new
mayors and presidents of universities with
advanced degrees trying to navigate their
organizations’ budget documents. The
need for a focus on communicating spans
wide sectors of the populations we seek
to serve.
CONCLUSION
We conclude where we began, by
recognizing the need for public
administrators and staff to be armed with
a broader range of skills. The new demands
of those entering public service include
an understanding of governmental
operations and cultural diversity, and
how to communicate to audiences
with significant different interests and
understanding of the public budget.
Sandra Emerson is a professor in the
political science department at California
State Polytechnic University and coauthor
of The Public Administrator's Companion:
A Practical Guide.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 47

Start Start Your
Start Your Cerrficaaon
Your Cerrficaaon
Cerrficaaon
Process Process Today
Process Today Today
GFOA’s redesigned Cerrfied Public Finance Officers (CPFO)
Start Start Your Your Start Start Cerrficaaon
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Process Process Process Process Today Today Today Today
program GFOA’s redesigned prepares individuals Cerrfied Public for leadership Finance posiions Officers (CPFO) in state
program and GFOA’s local prepares governments redesigned individuals Cerrfied by enhancing for Public leadership fundamental Finance posiions Officers skills in (CPFO) and state
and increasing program local governments knowledge prepares individuals of by best enhancing praccces for leadership fundamental and standards posiions skills in in and public state
finance. increasing and local knowledge governments of best by enhancing praccces and fundamental standards skills in public and
finance. increasing knowledge of best praccces and standards in public
finance.
New Exams
New Exams
Accounnng New Exams and Financial Reporrng
GFOA’s redesigned Cerrfied Public Finance Officers (CPFO)
program prepares individuals for leadership posiions in state
GFOA’s redesigned Cerrfied Public Finance Officers (CPFO)
program prepares individuals for leadership posiions in state
GFOA’s redesigned Cerrfied Public GFOA’s Finance redesigned Officers Cerrfied (CPFO) Public Finance Officers (CPFO)
program and local prepares governments individuals by enhancing for program and leadership local fundamental prepares governments posiions individuals skills by and state enhancing for leadership fundamental posiions skills in and state
and increasing local governments knowledge of by best enhancing praccces and increasing local fundamental and governments knowledge standards skills of in by best and public enhancing praccces fundamental and standards skills in and public
finance. increasing knowledge of best praccces finance. increasing and knowledge standards of in best public praccces and standards in public
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Treasury and Investment Management
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Planning and Budgeeng
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Debt Management
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Treasury and Investment Management Treasury and Investment Management
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Compensaaon and Benefits
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Risk Management
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Procurement
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48

In Practice
FINANCE | ACCOUNTING | PERSPECTIVES | INTERVIEWS
FINANCE
CITY OF THOUSAND OAKS, CALIFORNIA
It’s Our Team
BY KATIE LUDWIG
Early in his career with the City
of Thousand Oaks, California,
Senior Financial Analyst
Ryan Roman, who works in
the Finance Department,
asked Deputy Public Works Director
Nader Heydari if his team could help with
a project. Nader quickly responded, “It’s
not your department and my department.
It’s our team. It’s the city.”
These words had a significant impact
on Ryan as a new employee, and they
exemplify the collaborative culture that
Thousand Oaks staff consider to be one of
the keys to their success.
“We don’t use the word ‘can’t’ very
often. It’s ‘how,’” said Cliff Finley, director
of the Public Works Department. “We
work together because we’re trying
to solve problems. We discuss what
we’re trying to accomplish and why
we’re trying to do it. If we all agree that
the intended results make sense, we
discuss how to accomplish the task.
Every staff member, regardless of their
role in our departments, feels like they
need to figure out how to accomplish
their work more efficiently. That’s how
an organization empowers its staff and
becomes more efficient.”
Jaime Boscarino is the city’s finance
director. “Our biggest customer is Public
Works because they spend the most
money at the city. We work with them
a lot throughout the year—with all the
department heads, really—as things pop
up that they hadn’t accounted for in the
budget, or as laws change, as we have
additional projects that we need to add to
the budget,” she said. “They’re working
with Finance throughout the year to
identify funding sources and to figure
out if we have capacity to do certain
things. We lead the budget for the whole
city, but it truly is a team effort.”
“We spend a lot of money, so we work
very, very closely with the Finance
Department to be able to execute
Above, from left: Alexandra South,
Nader Heydari, Ryan Roman, Cliff Finley,
Jaime Boscarino and Brent Sakaida
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 49

IN PRACTICE | FINANCE
our work,” added Cliff. “It’s a great
relationship. They do a great job of
helping us get work done,” he said.
Cliff explained that when he first
arrived at the city in 2012, the working
relationship between Public Works
and Finance wasn’t as close. “The
Public Works Department had its own
purchasing group. We took care of all
our own facilities and IT. We didn’t
get—and didn’t want—any help with the
budget. We were oftentimes at odds with
the Finance Department,” he said.
Cliff’s experience of working
for another local government had
shown him the value of having a
close working relationship with the
Finance Department. He worked on
convincing his colleagues in Public
Works that Finance should be their
“best friend” and he, with the support
of the departmental directors at the
time, cultivated relationships with his
colleagues in the Finance Department.
“Jaime and I were both deputies at
that time,” Cliff said. “We worked hard to
develop a relationship, and all of those
barriers just started to come down. It
starts at the top. Once the leadership and
the organization decide we’re not going
to tolerate silos anymore, and we’re going
to work together and find solutions,
change starts to happen. It does take
a while, but the organization ends up
getting to where we are today.”
Ryan explained that his position
is a result of the close collaboration
between the two departments. “Public
Works and Finance got together and
said, ‘how can we make this position
work for both of us?’” Jaime said that
she and Cliff both had a need for a
staff person to assist with developing,
monitoring, and managing the Public
Works budget. “We decided to work
together and create this position
that’ll impact and benefit both of our
departments. By trial and error, just
throwing things at Ryan, we’ve been
able to make it work, and he’s provided
real value for both of our departments,”
she said.
In his role, Ryan works closely with
the Public Works Department to help
with developing the operating budget,
Once you start to build
a team, the ideas start
to flow, and the end
product is just better.”
RYAN ROMAN
SENIOR FINANCIAL ANALYST
the capital improvement budget,
setting user fees, and expanding the
asset management program. “I view
collaboration as sharing ideas and using
the strengths of our team members to
work toward the common goal. I think
it’s incredibly important not just for
having success on a project, but also for
enjoying your job,” said Ryan.
The close collaboration between
Finance and Public Works recently led
to the city being able to move forward on
a solar installation and battery backup
microgrids at city-owned facilities.
The Finance Department handles
facilities management for the city, and
Public Works manages the engineering
team and the sustainability team. The
city’s sustainability manager came to
Finance and recommended that the
city move forward on the planned solar
installation and microgrids sooner
rather than later so we could take
advantage of significant financing
incentives. “By working together, we
were able to advance the projects
more quickly than would have occurred
otherwise. It was about figuring out
how we can make this work together,”
Jaime said.
“It doesn’t stop. It’s not like, ‘Okay,
we took on their facilities and now
the work is done.’ We have to continue
that collaboration between our two
departments. It’s a work in progress.
I’m not going to say it’s perfect and
that there are never any complaints,
but we continue having that open
communication,” Jaime added.
Ryan gave an example to show
what the commitment to open
communication looks like in practice.
“Sometimes finance folks and project
managers speak a different language.
We may use the same term, but it may
mean something different to someone
else, like fund balance. When a project
manager hears ‘fund balance’ they may
think about how much money they have
left for their project, whereas Finance
staff is referring to how much is left
in the fund,” he said. To address this,
the accounting team in the Finance
Department set up a training session
to go over charts of account strings,
fund balance, and related topics. “We
recognized there was some frustration
there, and it wasn’t personal. It was
because we weren’t speaking the same
language.”
The city’s collaborative culture has
also influenced the way it develops
its biennial budget. Brent Sakaida
is the city’s budget officer, and he
works with all the city’s departments.
“Collaboration is just basically pulling
everyone’s strengths together, making
sure that you have that common goal.
The main factor is the communication.
You have to keep the communication
channels open, and we do a great job of
that. Everyone is talking to everybody
else and offering their best ideas to get
the best product out,” he said.
Alexandra South is the city’s
strategic communications and public
affairs director. She oversees the
digital and print communications
the city issues, as well as internal
communications. Her team of three
people works with every department to
make the community aware of the city’s
programs and initiatives.
Alexandra explained how the
pandemic has challenged the city’s
public engagement efforts. “My first
time working on the budget, we were
in the depths of a pandemic and so we
had to do a complete pivot away from
anything that had traditionally been
done and start from the ground up,” she
said. “That has led to this year’s cycle,
which is a robust effort because now
we’re able to integrate all the digital
50

materials we really worked hard to
develop during the pandemic, when we
had no other choice. Now combining
those with the in-person engagement,
it’s a much more dynamic effort.”
“I started in this position in the
middle of the pandemic budget
engagement, and I was just
immediately comfortable with Alex
because she was open to anything,”
said Ryan. “The focus was ‘let’s figure
this out.’ It helped us come up with a
good solution, something that I think
was an entertaining and engaging
product, because we were open to
different ways of doing things. It wasn’t
just ‘we have to do it this way.’”
“We are not creative people
necessarily. We know the numbers. We
wouldn’t get the public engagement
outreach campaign we have if we
didn’t work with Alex and her team,”
said Jaime. “They come in with all
these great ideas that we would never
even think of.”
“You just don’t know everything.
One person just doesn’t know it all,”
said Brent. “The more people that you
include, the more you’re bringing
in different experiences, different
knowledge. Once you start to build a
team, the ideas just start to flow, and
the end product is typically just better.”
The city has embraced technology
to enhance budget collaboration. “We
did our operating budget kickoff last
Friday. We recorded that meeting for
anybody who couldn’t attend and
posted it on a site called iEvolve,”
Jaime said. “We post all our training to
that site so any staff members can go
on and watch the recording afterward.”
Brent agreed and explained how
technology has helped the city adapt.
“When we went into COVID, there was
a lot of communication about what we
could put online and what we could
do virtually,” said Brent. “We have so
many forms now that are basically
online. We’re not shuffling paper. That
is because of the discussions that the
city has about how do we make this
better? How do we improve?”
The city has adopted hybrid work
schedules—meaning staff can work
Close collaboration between the city’s Finance Department and the Public Works Department
made it possible to move forward on a solar installation and battery backup microgrids at cityowned
facilities.
from home a few days each week—and
has found that this has not impeded their
ability to collaborate. “Staff is generally
very happy with some flexibility in
where they’re working and when they’re
working, and I think that happy staff are
more engaged, and, in my opinion, more
productive,” Cliff said.
Alexandra agreed. “In my opinion,
having a hybrid work environment
has increased our ability to reach out
to people quickly, but also not have to
cancel meetings. We have all been
able to just keep going, in whatever
capacity and wherever we are. Not like
grind culture or anything, but we are
able to stay focused and do anything
from anywhere. We’ve worked hard
to facilitate that and make sure that
everybody has what they need to make it
happen, and frankly, it’s as productive as
before, if not more, because it’s so easy
to do pretty much anything you need to
every day, no matter where you are.”
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 51

IN PRACTICE | FINANCE
“I’ll just plug our IT Division, which
is within Finance,” Ryan added. “They
make this possible for us. They’re just
so on top of every new technology. As
challenging as COVID was, they made
it so seamless for us.”
The Thousand Oaks team offered
some advice to other local governments
that are working on becoming more
collaborative.
“Collaboration takes leadership.
People need to create a team and
then create a culture of trust and
collaboration within that team. That
empowers the team members, and
pretty soon your team gets stronger
and stronger,” said Cliff. “Then
that strength builds through the
organization and provides results,
leading to success. And when people
are successful, they love what they do.”
Brent added that while it helps for
collaboration to come from the top, it
doesn’t have to be the very top of the
organization. Team leaders throughout
the organization can create a culture
of trust and collaboration within their
teams at all levels.
“To me a key is building those
relationships with your peers and with
We don’t use the
word ‘can’t’ very
often. It’s ‘how.’”
CLIFF FINLEY
DIRECTOR OF PUBLIC WORKS
your coworkers because then you get
more comfortable with bringing things
up to each other,” Jaime said.
Ryan stressed that staff should
create opportunities to collaborate.
“Schedule a meeting, just start talking
with other departments,” he said.
“We have a bimonthly CIP coordination
meeting with Public Works and
Finance to review projects, but the floor
is open to other items. And through
those meetings, you break down
barriers, you answer questions, you
alleviate frustration, and you build
relationships.”
Finance and Public Works also have a
quarterly meeting to touch base on more
general issues. “So many topics come up
in those meetings that probably never
would otherwise,” he added. “So, look
for those opportunities. Ask where do
we have areas that maybe need some
improvement or better communication?
It’s so much easier now, with the virtual
environment to set up a meeting and get
those conversations happening.”
Ryan added that an additional
benefit of collaboration is that it
leads to a better work experience for
employees. “I’ve been in my new role
for a year, and I’ve had the opportunity
to work with Alex and her team, with
folks at the Municipal Service Center,
the wastewater treatment plant, and
our engineering team, and these are
people that I probably wouldn’t have
worked with in a normal financial desk
position,” he explained. “I’ve learned
so much just from the interactions with
them—from not only their technical
abilities, but also their approach to their
work. With collaboration, you break
down the silos, but you also build those
relationships, and it’s made my network
bigger and my job so much more
rewarding.”
Katie Ludwig is director of resource
development for GFOA.
52

Policies
Policies
Manual
Manual
Does anyone have a a comprehensive
Does anyone have comprehensive
policies and procedures manual they
policies and procedures manual they
would be be willing to to share?
would be be willing to to share?
19 19 replies
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General Fund
General Fund
What What is your is your general fund fund
reserve What What is policy? your is your general fund fund
reserve policy?
32 32 replies
32 32 replies
Financial Package
Financial Package
If If your ennty prepares a a monthly
If If your ennty prepares monthly
financial package, can can you you share?
financial package, can can you you share?
I’m I’m looking for for examples and and
I’m I’m looking for for examples and and
ideas.
ideas.
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FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 53

IN PRACTICE | ACCOUNTING
ACCOUNTING
Attention Required…STAT!
BY MICHELE MARK LEVINE
As most readers know,
annual comprehensive
financial reports
(ACFRs) are composed
of at least three sections:
an introductory section, a financial
section, and a statistical section, often
referred to (affectionately, of course)
as the “stat” section. The requirements
for a statistical section are found
in the Governmental Accounting
Standards Board (GASB) Codification
of Governmental Accounting Standards
Section 2800, “Statistical Section.” 1 The
codification identifies the objectives
of a statistical section as providing
“… additional historical perspective,
context, and detail to assist in using the
information in the financial statements,
notes to financial statements, and
required supplementary information to
understand and assess a government’s
economic condition.” 2 Codification
Section 2800 is interesting in that
it constitutes generally accepted
accounting principles (GAAP) that
must be followed by governments
“…that prepare a statistical section
that accompanies the basic financial
statements,” even governments that
don’t prepare a full ACFR—although
GAAP don’t require governments to
prepare a statistical section in the
first place!
Independent auditors generally
disclaim an opinion on a government’s
statistical section, which may lead
some to treat it as a low, or at least
lower, priority. 3 Also, as many of the
section’s tables include information
extracted from the basic financial
statements (BFS), they cannot be
finalized before those statements
are finalized, perhaps resulting
in less-than-thorough reviews. If
last-minute adjustments are made
to BFS, governments may forget to
make the corresponding changes in
the statistical section. Whatever the
reasons, there are at least a half dozen
errors that we see fairly frequently in
the statistical section of ACFRs, many
of which GFOA has been seeing since
the implementation of the current
financial reporting model more
than 20 years ago! 4 So, let’s take the
opportunity to refresh our memories
on these old topics, and—so we’re not
always going to be playing catch-up—
let’s also plan for the effects that some
recent GASB pronouncements will
have on amounts reported in statistical
sections in the very near future.
©2023 JOEY GUIDONE C/O THEISPOT.COM
54

The most frequent
discrepancies
between the financial
and statistical
sections occur when
the amounts reported
in financial statements
and note disclosures
for outstanding debt
don’t agree with the
amounts in the debt
capacity tables.
The statistical section includes
information on the reporting
government’s:
• Financial trends—how financial
position has changed over time.
• Revenue capacity—ability to generate
own-source revenue.
• Debt capacity—level of debt burden
on taxpayers and the ability to issue
additional debt.
• Demographics and economics—
how socioeconomic condition and
financial information have changed
over time.
• Operating and capital asset trends. 5
In the ACFRs submitted with
applications to GFOA’s Certificate
of Achievement for Excellence in
Financial Reporting Award Program
(COA), we see a variety of errors
throughout the statistical section, but
most frequently we see disagreement
between the amounts included in the
statistical section and those reported
in financial statements and note
disclosures. Of course, we see some
numerical inconsistencies even within
the financial section, but they are
especially numerous between the two
sections.
The most frequent discrepancies
between the financial and statistical
sections occur when the amounts
reported in financial statements and
note disclosures for outstanding debt
don’t agree with the amounts in the
debt capacity tables. Governments
often accurately include unamortized
original issue premiums and properly
net out unamortized original issue
discounts in the financial section but
fail to make the same adjustments to
amounts shown in the debt capacity
schedules. Additionally, the liability for
the accreted interest on deep-discount
(also known as “zero-coupon” or
“capital appreciation”) bonds should be
included as a liability in the statistical
section as it is in the financial section. 6
Also, with regard to debt capacity,
in the information on direct and
overlapping debt, governments often
fail to include all types of debt, which
include bonds and notes payable, bank
loans, certificates of participation,
lease liabilities, and, very soon, publicprivate
and public-public partnership
(PPP) liabilities and subscriptionbased
information technology
arrangement (SBITA) liabilities. The
total direct debt reported on this table
should equal the total debt reported in
governmental activities. Finally, the
calculation of net bonded debt requires
governments to deduct amounts legally
restricted for their payment from total
bonded debt, but governments often
deduct amounts that are (mysteriously)
greater than the amount of net position
restricted for debt service shown on
their statements of net position—so one
or the other must be in error.
In the financial trends information,
governments that prepare statistical
sections are required to provide
information about changes in
governmental fund balances, including
ratios of total debt service to noncapital
expenditures. The debt service used
as the numerator for this ratio should
be the total of principal and interest
expenditures for the year, and costs of
debt issuance should not be included.
The calculation of the denominator
of this fraction is the more frequent
source of errors. The amount of
capital expenditures that should be
deducted from total expenditures to
arrive at noncapital expenditures is
not necessarily the amount of capital
outlays reported in the governmental
funds statement of revenues,
expenditures, and changes in fund
balance; it must be the amount of the
year’s expenditures that were actually
capitalized. By capitalized, we mean
that they were included in increases to
general governmental capital assets
in the conversion to governmental
activities reported in government-wide
financial statements. 7 This amount
will be a reconciling item between
the governmental funds statement of
revenues, expenditures and changes
in fund balance, and the governmental
activities in the government-wide
statement of activities, and that
reconciliation should be the source
for the amount deducted to arrive at
the denominator for this ratio in the
financial trends table.
Looking ahead, in addition to the
effects of including lease and PPP and
SBITA liabilities as outstanding debt
in the statistical section, there are
statistical section implications of GASB
Statement No. 100, Accounting Changes
and Error Corrections (GASB 100). 8 In
that statement, which will become
effective for fiscal years beginning after
June 15, 2023, and all reporting periods
thereafter, 9 GASB provides guidance
on how accounting changes and error
corrections should be treated in both
required supplementary information
(RSI) and other supplementary
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 55

IN PRACTICE | ACCOUNTING
information (SI), the latter of which
includes the statistical section. 10 For
those fiscal years included in the
basic financial statements, RSI and
SI should be reported at amounts
consistent with the amounts reported
in the statements. Earlier periods
also included in RSI and SI should not
be restated for accounting changes;
however, they should be restated
for all prior years, if practicable, for
error corrections. And, as always, we
are reminded that being difficult
or inconvenient does not make a
restatement “not practicable.”
1
GASB Codification of Governmental Accounting
Standards, 2022-2023 edition (Cod.).
2
Cod. Section (Sec.) 2800, “Statistical Section,”
paragraph .104.
3
Independent auditors do read the stat section of
an ACFR to make sure that, as other information
in annual financial reports, it is consistent with the
audited financial statements.
4
Generally, over time, we see governments become
more familiar with new GAAP standards and see
a marked decrease in related errors, but this does
not seem to be the case for errors discussed in this
article. We also have continued to see errors in the
calculation of net investment in capital assets over
this same extended period of time, as discussed in
the February 2022 GFR article “From Confusing to
Cringe-worthy: Errors Made in the Calculation of
Net Investment in Capital Assets.”
5
GASB Codification of Governmental Accounting
Standards 2022-2023, Section 2800, “Statistical
Section,” paragraph .105
6
Accreted interest on capital debt is not, however,
considered to be a capital liability when calculating
net investment in capital assets, as only the principal
amount of such debt was used to acquire, construct,
develop, or improve on capital assets.
7
Governments often use the caption capital outlays
only in connection with capital project expenditures
made from capital projects funds, while routine
capitalized expenditures may be reported as current
period expenditures by function. Some costs of
capital projects that ultimately do not get capitalized
(e.g., amounts below the government’s capitalization
threshold) may also be reported in capital outlays,
so differences can go in both directions.
8
See the August 2022 GFR article, “GASB 101. Literally.”
9
Earlier application is encouraged.
10
GASB Cod. Sec. 2800.101.
It’s Time for Timeliness
The purpose of GFOA’s Certificate
of Achievement for Excellence in
Financial Reporting Award Program
(COA) is to encourage and assist state
and local governments in going beyond
the minimum requirements of generally
accepted accounting principles
to prepare annual comprehensive
financial reports (ACFRs) that evidence
the spirit of transparency and full
disclosure, and then to recognize
individual governments that succeed in
achieving that goal.
For financial reporting to be
effective, the information in the
reports must be understandable,
reliable, relevant, timely, consistent,
and comparable. 1 The COA program
requirements incorporate each of these
characteristics. The characteristic of
timeliness is incorporated by requiring
submission of applications and annual
comprehensive financial reports
(ACFRs) within six months of the end of
the fiscal year covered by the ACFR.
The COA’s longstanding policy has
been that governments could apply for
an extension of one month when they
experience extenuating circumstances,
and this extension could be granted
by GFOA staff. In certain cases,
governments were permitted additional
one-month extensions, up to a total
of six extensions for a single year if
circumstance warranted. With the
extenuating circumstances caused by
the COVID-19 pandemic, however, GFOA
unofficially increased the maximum to
12 one-month extensions, meaning that
with a COVID-19-related justification, a
government could be eligible to win the
award for an ACFR issued up to 18 months
after the end of the subject fiscal year.
More than two and a half years after
the start of the pandemic, however, GFOA
needed to consider whether ACFRs that
are made public a year or more after the
financial statement date can reasonably
be considered examples of excellence
in financial reporting. While highly
sympathetic to the many governments that
continue to struggle with staff turnover
and shortages 2 or that have had their audits
delayed by CPA firms or government audit
offices suffering from similar issues, the
COA Special Review Executive Committee,
which guides the award program,
recently acted to reaffirm the importance
of timeliness in financial reporting.
They voted to formalize the six-month
submission deadline and enforce stricter
limits on extensions, while providing
applicants the possibility to appeal to the
SREC under certain circumstances. 3
The extension policy and instructions
for applying for an extension can be found
on GFOA’s website at gfoa.org/coa-award.
Michele Mark Levine is the director of
GFOA’s Technical Services Center.
1
Governmental Accounting Standards Board Concepts
Statement No. 1, Objectives of Financial Reporting.
2
GFOA continues to devote substantial resources toward
helping address the ongoing shortages of qualified
public finance professionals. See GFOA’s “Meeting
Demand for State and Local Public Finance Jobs” report
at www.gfoa.org/meeting-demand-public-finance.
3
Please note that previously approved extensions will not
be affected.
©2023 JOEY GUIDONE C/O THEISPOT.COM
56

Starrng your
Starrng your
career journey
career journey
in public finance?
in public finance?
GFOA’s Fundamentals Virtual Forum is a week-long virtual event
designed for new government finance staff featuring courses that
GFOA’s cover topics Fundamentals from GFOA’s Virtual Cerrfied Forum Public is a week-long Finance Officers virtual (CPFO) event
designed program. for Content new government includes accounnng finance staff and financial featuring reporrng,
courses that
cover compensaaon topics from and GFOA’s benefits, Cerrfied debt management, Public Finance planning Officers and
(CPFO)
program. budgeeng, Content procurement, includes risk accounnng assessment, and and financial treasury reporrng, and
compensaaon investment management. and benefits, debt management, planning and
budgeeng, procurement, risk assessment, and treasury and
investment management.
Save the date!
Save the date!
July 10-14
July 10-14
Registraaon opening soon
Registraaon gfoa.org/fvf
opening soon
gfoa.org/fvf
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 57

IN PRACTICE | PERSPECTIVE
PERSPECTIVE
Process Improvement
Saving time, money and stress
BY KATHERINE BARRETT AND RICHARD GREENE
Until recently, Fort Collins,
Colorado, Senior Accounting
Coordinator Renee Reeves
was frustrated by the
amount of time it took her to
reconcile the city’s credit receipts with
its bank records. But after a summerlong
improvement project in the city’s
Financial Services Division, she was able
to celebrate a dramatic decrease from an
average of 100 hours a month spent on
this activity to only 65 hours in October
2022. The goal is to reduce the number of
hours even further.
“The primary issue was inconsistent
processes, manual processes, and
submissions that were often delayed or
missed,” Reeves said. Having addressed
many of these issues, Reeves found
herself with more time to get her work
done, and “this definitely decreased my
stress,” she says.
Fort Collins is a prime example of an
effort that is taking place in a number of
cities and states to improve the smooth
flow of their processes. At the state
level, the National Association of State
Chief Administrators (NASCA) listed
operational excellence and process
improvement among the top ten core
strategies for state chief administrators
for fiscal 2023. It held its first summit
on the topic last fall.
Current notions of improving and
simplifying business and government
processes stem from manufacturing
innovations in the middle years of the
20th century when the seeds of Lean
Process Improvement methods were
planted. But the effort to get at the root
causes of inefficient approaches to
work “has been in existence since the
beginning of time,” said Sheila Montney,
an alderperson in Bloomington, Illinois.
©2023 MICHAEL AUSTIN C/O THEISPOT.COM
58

Montney used process improvement at
State Farm Insurance before retiring in
May 2021 and starting a company called
Win Together, to help governments “build
cultures of performance excellence.”
Why the acceleration in activity now?
With critical staff shortages, the pressure
is on to reduce unnecessary steps that
eat up employee time. What’s more, as
technology becomes central to a growing
number of governmental operations,
it’s important to redesign and improve a
process before you try to automate it. Or,
as Montney says, “When you automate
a process mess, you get an automated
mess.”
Core principles of continuous
improvement
While Lean methods of process
improvement currently dominate,
governments often borrow from a variety
of approaches—sometimes holding with
almost religious fervor to the tools and
jargon of Lean, although many places
avoid the language of any one method.
“It’s ideal if you don’t call it anything,”
Montney said. “There is value in a
common language for improvement
methods, though. It makes it easier to
collaborate and learn from each other.”
Whatever approach is used, one key
is chronicling the steps that go into
government work to puzzle out what
may be unnecessary. Practitioners are
taught to avoid “jumping to a fix,” in the
words of one expert. Instead, the idea is
to follow a deliberate “walk through the
process,” with a lot of attention paid to
the observations of the individuals who
have that job.
Projects often focus on the time it
takes to complete a task, or the number
of instances in which an employee
“touches” that task. But time is only
one factor. Continuous improvement
requires an engineering mindset and is
a skill learned by study and application.
The goal is to make work easier, better,
and faster, which results in lower costs,
Montney said.
The way governments progress in
these efforts often evolves over time.
Like many places, Snohomish County,
Washington, began its venture into
process improvement using basic Lean
methodology and principles—how
to identify problems, use root cause
analysis, and spot and remove waste.
After three years, it moved into using
more advanced Lean tools and created
a training program to generate Lean
leaders. Still, it follows the path of many
other organizations in shying away from
too much jargon in order to keep language
accessible to all staff and leaders.
One important point that seems to
stretch across governments that are
engaged in operational excellence
programs is that improvements are not
imposed from above, instead focusing
heavily on the input of employees
who are familiar with what they can
see needs changing—because they’ve
experienced it themselves through their
own job duties. “The frontline worker
knows what does and doesn’t work,” said
Kristi Hoagland, director of Operational
Excellence in Snohomish County.
Impediments to success
Over decades, a consistent pitfall for
performance management programs in
general has been the difficulty of getting
staff buy-in. Staffers can see extra work
added and resist something that can
sound like the management fad of the
week. There’s sometimes also a fear that
reducing work steps will also potentially
reduce jobs. “But that’s far from the
truth,” Hoagland said, adding that jobs
may be changing, but not necessarily
diminishing in number.
Another sticking point stems from
the ability of busy, understaffed
departments to set aside time for the
analysis that is inherent in process
improvement. Departments will often
engage in the first step of a process
improvement effort—brainstorming
about problems. “But then we’d hear
that people didn’t have dedicated time
or that managers weren’t supportive
of process improvement,” said Cate
Eckenrode, Fort Collins process
improvement specialist. “We’d
brainstorm ideas and hand the ball
over, but they wouldn’t take the ball
and run with it.”
A closer look at Fort Collins
financial pilot
Fort Collins is as good an example
as any of a city that has thoroughly
bought into the notion of process
improvement. It started funding these
efforts back in 2016 and expanded
most recently with a new pilot
launched in the Financial Services
Department in 2021 to embed the
techniques of process improvement
throughout one entire department.
The idea was to help make these
concepts part of the fabric of doing
business rather than a sporadic effort
that comes and goes, based on the
passions of individual proponents.
The City of Fort Collins, Colorado has made notable improvements in process efficiency through
their pilot program, FC Lean.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 59

IN PRACTICE | PERSPECTIVE
Continuous improvement
requires an engineering
mindset and is a skill
learned by study and
application. The goal is to
make work easier, better,
and faster, which results
in lower costs.
Eckenrode explained that FC Lean,
as the city calls its effort, seeks to
reduce unnecessary time on a project,
along with error rates and hard costs.
Recently, the city has also included
sustainability factors—the impact on
the environment—or inequity.
The first step in Fort Collin’s
pilot project involved training all
50 members of the city’s finance
staff in basic principles of process
improvement, with managers offered
more advanced training so they could
be mentors to their employees.
Adhering to the tenets of FC Lean,
Reeves wasn’t going to guess at
potential solutions. Her summer
journey began with intense research,
asking, in typical process improvement
style, the “five whys”—questions that
would help point out the “failure points”
in the credit reconciliation system.
As Reeves recalls, “We went around to
each department gathering data. What
is the system that you’re using? What’s
your software? Do you have a backup
person if you’re the only one doing it?
Does your system interface with our
financial system?”
Devoting the time to talk with
individuals on the other side of the
monthly credit reconciliation activity
helped Reeves map and understand
the flaws of the current system, which
included lax attention to deadlines and
other problems that stemmed, in some
cases, from a lack of departmental
employee understanding about the
reconciliation process. “The feedback
I received was that some folks just
didn’t even know how to review their
variances,” she said.
The solution came in two parts. “We
needed to establish a standard process
meeting the varied requirements of
stakeholders, as opposed to working
around all that variability,” said the
city’s controller, Randy Bailey. From
there, providing adequate training and
support such as on-demand videos that
Reeves created increased consistency
significantly across the city.
With that improved understanding
and communication, and a tighter
schedule for submitting credit revenue
information, the Fort Collins accounting
department was not only able to show
a decline in the hours Reeves spent
each month, but also dramatic drop in
the number of reconciliation problems
that needed serious attention from an
average of 100 in previous months to
10 in October 2022.
These kinds of projects, some big
and some very small—“Just Do Its” in
FC Lean vernacular—are occurring
throughout the Financial Services
Division. The department-wide
approach has had multiple payoffs,
including the kind of ongoing support
that Reeves received from the controller.
Well-trained Financial Services
Division directors and managers
not only help their staffs, but also
each other. “That drives a lot of good
discussions,” Bailey said. “It’s very
helpful that a broader community is
speaking the same language and having
some of the same struggles.”
Katherine Barrett and Richard Greene
are principals of Barrett and Greene, Inc
(greenebarrett.com). and are co-authors of
the recently released Making Government
Work: The Promises and Pitfalls of
Performance-Informed Management.
©2023 MICHAEL AUSTIN C/O THEISPOT.COM
60

IN PRACTICE | PERSPECTIVE
PERSPECTIVE
Reallocate the Police?
A case of new financial innovation
BY JUSTIN MARLOWE
Financial innovation” can
be a genteel way of saying
“a technical solution to a
political problem.” Large
projected budget gap and no
agreement on how to close it? A “scoop
and toss” debt refinancing can help.
Council wants a new fire truck but can’t
agree on how to pay for it? Make those
dollars appear with a mid-year budget
adjustment—and so forth. This type of
innovation can clear a path to political
agreement. But it can also allow elected
officials to ignore structural financial
problems that become exponentially
worse with time. Today’s state and
local finance officials continue to
grapple with the broader ethical and
policy questions that surround this
type of financial innovation.
But sometimes this chain of events
is turned inside out. In other words, the
political consensus presents a technical
financial problem. What happens when
a popular parks improvement can’t
be funded through a dedicated local
capital projects sales tax? Or that state
law won’t allow a particular type of
developer subsidy for a broadly agreed
on and badly needed investment in a
blighted, underserved neighborhood?
The answer is often “find a way.”
And it’s here that a different type of
financial innovation happens. A recent
experience with regional community
crisis response illustrates this type of
innovation in action, and how we might
replicate it elsewhere.
The defund the police movement
stoked some of the most contentious
local political debate in recent memory.
Leaders of and against that movement
disagreed on basically everything. But
they did agree on one key point: police
©2023 CARL WIENS C/O THEISPOT.COM
62

are too often dispatched to situations
they’re not equipped to manage. This is
especially true for emergencies rooted
in substance abuse, untreated mental
illness, developmental disabilities,
and behavioral health concerns.
An obvious solution is for social
workers to accompany police—known
as the “co-responder” model—or to
“respond instead of police” as part of a
“community responder” approach.
These alternatives to policing are
appealing, but they require scale
economies. Most municipal police
departments receive enough calls to
need co-/community responders, but
not enough to justify a fully staffed,
stand-alone responder team that offers
round-the-clock coverage. Experts also
point out that individual crises are
rarely confined to a single community.
All that suggests the community
responder model is an excellent
candidate for a regional approach.
That’s precisely how leaders in five
municipalities in greater Seattle—
Bothell, Kenmore, Kirkland, Lake Forest
Park, and Shoreline—saw it. After
a few months of local experiments,
they agreed to stand up a fully staffed
regional entity offering 24/7 coverage
across all five communities. The new
entity, known as the Regional Crisis
Response agency (RCR, or “Racer”),
will launch in early 2023 with a budget
of $5.4 million and 13 FTEs. RCR also
plans to add a crisis response facility
and community responder vehicles in
the near future.
Community responders were the
clear political solution. But to make
that happen, financial leaders in the
participating municipalities had to
address three interrelated technical
financial challenges. That’s where the
real innovation began.
An immediate challenge is that
this new model requires more
flexibility than a typical regional or
shared service. Much of that need
for flexibility is dictated by revenue
volatility. Local property taxes in the
State of Washington, like in many
other states, are subject to state caps
on annual growth. That means any
new investments in community
responders will likely come from
The RCR approach
shows how a new type
of financial innovation,
one that deliberately
blurs the lines between
nonprofit and local
government finance, can
help address one of the
most salient issues in
local government today.
sales taxes, a revenue stream that’s
inherently volatile. To deal with that
volatility, the authority needs the
flexibility to set aside and deploy
financial reserves, to adjust service
delivery expectations, and to dial up
or down the individual jurisdictions’
contributions, all in real time. Most
interlocal agreements don’t offer that
flexibility.
That’s why the RCR communities
agreed the best path forward was to
form a new independent nonprofit.
That new organization is governed
by a representative board appointed
from across the five jurisdictions. That
board is empowered to adjust policy on
the fly, rather than renegotiating the
parameters of an interlocal agreement.
It also has the flexibility to receive
many types of funding that might not
work with an interlocal agreement,
including general fund contributions
from each jurisdiction, state grants,
and in-kind contributions from local
healthcare providers, among others.
In an interview about the new entity,
Beth Goldberg, Kirkland deputy city
manager and a key figure in this
effort, characterized this emphasis
on flexibility as essential because “if
we’re seeing impacts and opportunities
to adjust allocations of funding, I’m
sure that both the nonprofit and the
individual jurisdictions will have
those discussions.”
This nonprofit structure also helps
optimize financial efficiency and
accountability. Kirkland serves as the
nonprofit’s fiscal agent for the time
being. In that role it is responsible for
finance, payroll, human resources,
and other back-office services. That
minimizes the new nonprofit’s
overhead and allows for a quick
scale-up. It also allows the nonprofit
to comingle general fund revenues
from five jurisdictions but still offer
the transparency of a traditional
independent financial audit. Interlocal
agreements may or may not allow that
kind of assurance.
A shift to community responders
also begs some challenging questions
about effectiveness and impact. How
will each partner know if community
responders protect public safety
more effectively than police? Does
this model prevent future behavioral
health crises? And perhaps the
biggest question: does it ultimately
save money? Proponents claim
the community response model
means those affected by mental and
behavioral health crises are more
likely to receive appropriate ongoing
treatment. That reduces crime,
eliminates expensive emergency room
trips, and assures that assistance for
housing and food security are more
effectively deployed. All this, the logic
suggests, will save money compared to
policing. Relative to a typical interlocal
agreement, a well-structured nonprofit
should be much better equipped to
facilitate careful analysis of these
questions.
The RCR approach shows how a new
type of financial innovation, one that
deliberately blurs the lines between
nonprofit and local government
finance, can help address one of the
most salient issues in local government
today. Local financial leaders
everywhere should consider applying
this approach to a range of other
challenges going forward.
Justin Marlowe is a research professor at
the University of Chicago, Harris School of
Public Policy, and a fellow of the National
Academy of Public Administration.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 63

IN PRACTICE | INTERVIEW
WITH JACK PELLEGRINO
Mike Mucha, GFOA’s deputy executive director, met up with Jack Pellegrino,
NIGP-CPP, CPPO, CPCM, the director of purchasing and contracting for the
County of San Diego, California, and past president of the California Association
for Public Procurement Officials (CAPPO). At the CAPPO 2023 conference,
Jack and Mike gave a presentation on the need for better coordination between
finance and procurement, and here they discuss the county’s approach to
customer service, the evolution of procurement, attracting new talent to the
profession, and the role of professional associations in developing employees.
Mike: I’ve heard you say that more than
$2 billion in purchasing transactions
flow through your office. Can you tell
us about the department and your role?
Jack: San Diego County is a large
organization with 48 departments,
more than 19,000 employees, and a
budget of approximately $7.3 billion.
The Department of Purchasing and
Contracting is a single-point shop
for all things procurement with the
county. We operate under a very
centralized model to support county
departments and have really stressed
client-focused procurement and being
able to provide good customer service
to assist with departments’ ability
to provide services. The Department
of Purchasing and Contracting has
an overall staff of 74 people, which
includes 64 procurement staff.
The procurement staff are aligned
to focus on county departments
by groups. Groups include health
and human services, FG3 (finance
and government), land use and
environment, and public safety.
Coming out of college, did you always
know you wanted to work in public
procurement?
I earned an economics major and
business minor from Benedictine
College and like most people
currently working in procurement,
I sort of fell into the profession. Out
of college, I started out working for
TRW Electronics and Defense in a
purchasing role. They were involved
in the aerospace industry and were a
supplier for the Department of Defense.
I was then able to further develop in
my career, moving up to higher-level
positions in procurement with two
other firms, Hughes Aircraft and
Science Applications International. I
really enjoyed how procurement was
able to play a critical strategic role
in the firm. We were involved in key
decisions because each of those firms
understood that our ability to deliver,
as a company, relied on our ability to
source materials and ensure a highquality
supply chain. Our ability to
compete for business was based on how
well our supply chain worked. For me,
I also liked that I had an opportunity
to get involved in both sides of a
deal—both securing new business
and helping to execute successfully.
What led you to switch to the public
sector and take a job with the county?
I really wanted to be connected to public
service. The county’s motto is “The
noblest good is the public good,” and
I can say that I find it more fulfilling
than just working for the business
bottom line.
What did you find was the biggest
difference in working in the public sector
versus the private sector?
The biggest change or thing to get
used to in moving from the private
sector to the public sector was the
level of transparency that exists in
local government procurement. Even
though we participated in procurement
processes for the federal government,
local government is different. In the
private sector, we were careful to treat
most of our information as proprietary
to protect our competitive advantages.
Our approach to projects, pricing, and
even suppliers was that what we were
using was all confidential information.
This is not appropriate for public
entities, where just about everything
becomes public record. I would say that
another big difference was the speed of
the procurement. Because there wasn’t
a focus on transparency, we were able
to move much faster and involve fewer
people, and therefore our processes and
procedures were not as robust.
I’ve heard many times that working in
the public sector is more difficult. Did
you find that to be true?
At times, it can be frustrating that we
aren’t able to complete procurements
faster, but I completely understand
the need for transparency and didn’t
find that to be difficult. What was
most challenging for me, coming in as
department director, was navigating
the intersection between politics,
policy, and operations. In the private
sector the CEO or other managers are
authorized to make most decisions,
or at least provide a vision for moving
forward—and so we could do so quickly.
64

In government, there are many more
stakeholders involved in decisionmaking,
and important issues need to
be looked at through a variety of lenses.
For example, what might be good for the
budget may not serve our citizens or
be the approach favored by our elected
officials. Similarly, stakeholders may
disagree on an approach, and it takes
time to navigate the process to reach a
final decision. Government often gets
a bad name because of rules and our
bureaucratic process, but that’s what
makes our governments run, and that
process is essential when you consider
who we serve. We have a fundamental
responsibility for fairness in the
process and need to be good stewards
of taxpayer funding.
One challenge that we know governments
are facing across all functional areas, but
especially in finance and procurement,
is recruiting more people like you to
leave the private sector and take a role
in the public sector. Do you have any
advice for how governments can be more
successful in recruiting talent away from
the private sector?
For me, it was a desire to serve the
public. At the county, we provide
services in so many areas that make a
difference in the lives of our citizens.
In procurement, we help play a role in
supporting departments across the
county. I really think governments
need to do a better job explaining our
work. Yes, if a new college graduate is
just comparing salaries, my guess is
that the private sector will likely still
be higher—and that might be important
if they have student loans to pay off.
However, I feel new hires may not
recognize that government procurement
careers can provide good salaries,
opportunities for career advancement,
strong benefits, and fulfilling work.
For anyone comparing the public and
private sectors, I would suggest they
look at the other benefits or professional
development opportunities that can
come with government. I have been
fortunate to be a part of the National
Institute of Governmental Procurement
(NIGP) and the California Association
for Public Procurement Officials, where
I can attend conferences and network
with leaders from other governments
who truly want to share their
innovations, ideas, and best practices.
I know I have been able to learn from this
network, and that largely doesn’t happen
in the private sector.
You mentioned that we need to focus on
the work. You’ve been at the county for
almost ten years. As you think about the
time you’ve put in there, what has been
the most rewarding experience?
Two things stand out. First, we were
able to focus the county purchasing
organization on “client service.” I like
to say this every chance I get. Our job in
procurement is to get the client what they
need, when they need it, and for a fair
price within the rules. We take seriously
our role to partner with departments and
help them find solutions. For example,
some departments may know what they
need but may not know how to define
it. In other cases, departments may not
be aware of the rules that apply to their
purchase. Our role is to be helpful. To
do this, we need to know how we are
performing. When I interviewed for the
job, I presented my idea for customer
service and committed to a regular
survey of clients so we could learn what
we need to improve. That is an important
part of service and the culture we have
in the department.
From a project perspective, I think
the Southeastern Live Well Center that
we are building here in the county
is a great example of how the county
and procurement can really serve the
community. The center is a $74 million
project in an underrepresented and
under-resourced part of the community.
When we negotiated the construction
contract, we included specific provisions
that required a set amount of spending in
the four zip codes around the center and
additional requirements for workforce
participation. In the contract, we
required $6 million in spending in the
community and at least 5 percent of the
workforce on the project coming from the
same area. Currently, based on the most
recent report, the project has already
delivered $8.2 million worth of spending
in the community and a community
workforce representation of 9.8 percent.
This is a project for the community, built
by the community!
Top: The Southeastern Live Well Center has already outperformed expectations for spending in the
community. The center is expected to employ approximately 238 people. Bottom Left: The SELWC
Contracting Team. Bottom Right: Jack Pellegrino signing the SELWC Toping Off Beam with
Abdur-Rahim Hameed, President /CEO National Black Contractors Association, of U.S.A., Inc.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 65

IN PRACTICE | INTERVIEW
From being involved in both GFOA and
NIGP, I understand the importance
of procurement working together
with finance to deliver high-quality
services to both internal and external
stakeholders. What is your approach to
ensuring that procurement and finance
work collaboratively?
I report to the county’s chief financial
officer, and purchasing is part of the
finance organization (finance and
government group). Fundamentally,
the role of purchasing is integrated with
finance, and we need to work together
each and every day. The role of finance
is more effective when they have
current data, and purchasing can help
with that. We can routinely provide
information to assist with forecasting
and budgeting. For example, we talk
all the time about our purchasing
staff knowing their portfolio. This
information is critical when pricing is
volatile in the inflationary period we
are in now. Changes in pricing for some
industries can make a big difference
in the county budget. I would think all
finance officers would want to know
that information, and procurement
officers should be in a position where
they can provide it.
When we speak at conferences, we
often hear about the siloed nature of
procurement and finance departments.
What makes the County of San Diego
different from other organizations,
where it seems that finance and
procurement are not as closely
integrated?
For one, I think our size makes a
difference. Procurement spending is
a sizable portion of the county budget.
For that reason, I think it is viewed a
bit more strategically. But I also think
that other governments don’t have
the same management philosophy.
I’ve seen managers not wanting to
give up control. In a way, the approach
we take in San Diego County is more
of the approach I was a part of in the
private sector, where the organization
recognizes that strategic decisions
require input from procurement. I also
think that purchasing departments
that focus too much on compliance risk
not being available to help customers
solve problems. Often, there isn’t the
necessary collaboration. I believe that
purchasing needs to evolve to become
more strategic, and partnering with
finance is an example of doing that.
Your department conducts a survey of
its customers to evaluate satisfaction
with the services you provide. How is the
survey conducted, and what do you do
with the results?
Each year, we survey our customer
departments on how well we are
meeting expectations and if we are
providing quality services. The survey
from last year contained only eight
questions, but it provided valuable
feedback on our ability to deliver
procurement services that departments
view as timely, professional, and
knowledgeable. And probably most
importantly, it asks about our ability
to clearly communicate the policies
and expectations in purchasing and
our alignment overall with the goals
of the department.
The County of San Diego’s Department
of Purchasing and Contracting customer
service survey is accessible to all county
employees and sent to contracting
officer representatives and departmental
contacts involved in purchasing. The
eight-question survey asks about the
following areas:
1. Understanding procurement needs
2. Questions are fully addressed
3. Timeliness
4. Knowledge
5. Clear communication
6. Consistent information provided
7. Functional threading with departments
8. Professionalism
Using the survey data from 2022,
the department identified areas for
improvement that included the need for
better consistency in process and service
levels, improved timeliness, and the need
to better communicate policies. Survey
results also recognized the county for
strong performance in professionalism,
a willingness to partner and help seek
solutions, general industry knowledge,
and an excellent approach to training and
work culture.
I have been fortunate to
attend conferences and
network with leaders
from other governments
who truly want to share
their innovations, ideas,
and best practices.
If San Diego County is serving as a leader
in recognizing the value of purchasing
becoming more strategic, how else do you
see the profession changing?
Technology has really had an impact and
I expect that to continue. When I started,
we were using typewriters to send out
bids. Now, not only do we have virtual
platforms to help with the process, but
we’ve also been able to eliminate much
of the paper. In our organization, prior
to COVID, all contracts were signed
manually. Now we use Adobe Sign, and
everything is electronic. We’ve become
much more efficient now that we don’t
have papers to file. In the future, I
see technology becoming even more
important, and I’m excited to see what
artificial intelligence can do. Beyond
technology, procurement needs to be
more solution-focused, and we need
to be able to add value by bringing
more options and potential solutions
to the table. There is definitely a huge
opportunity to learn from vendors, create
a bigger network, and be able to use that
network in providing better services.
66

As the profession changes, how do we
prepare staff to meet the challenges they
will face in the future?
I do think there are opportunities to
better teach public procurement at
colleges and universities. Ideally, much
more would be done in an academic
setting to prepare newer staff. I recently
joined the staff at the Supply Chain
Management Institute affiliated
with the Knauss School of Business
at the University of San Diego. In the
past, the program has been focused
on manufacturing for commercial
industries and developing students to
succeed at commercial sector firms but
not public entities who are the biggest
buyers of goods and services.
Building a bridge to a public
administration focus area will also help,
but in most other programs, you can
get a Master of Public Administration
degree and never take a class in
public procurement. Because of this,
I don’t think that strategies focused
on higher education alone will work.
Organizations like GFOA, NIGP, and
CAPPO really have a role in advancing
procurement to meet needs in the future.
These organizations were formed to
share best practices and the experiences
of practitioners, and I think meeting
the challenges of the future depends on
having strong associations that can offer
networking, mentoring, and guidance on
how to navigate the profession.
Which professional associations are
you involved with, and do you have any
recommendations for someone who may
be looking to get involved?
I’ve been a member of the National
Contract Management Association
ever since I started in procurement and
have been able to learn a lot through the
training they offer. When I started at
the county in 2013, I joined CAPPO and
NIGP. With CAPPO, I was interested in
building relationships, so I joined the
board soon after getting involved with a
role focused on education. I later moved
into their leadership cycle and just
completed a term as past president.
Each professional organization
offers something different. For
example, CAPPO is a California focused
organization and I’ve used connections
to build relationships within the state.
The organization focuses on education
and some of the unique ways we do
business in California. With NIGP,
they provide a much broader focus
and a big umbrella to contain best
practices for the United States and
Canada. I enjoy being involved in
both. When I come to a CAPPO event,
I can connect with colleagues here.
I’ve also been able to build
relationships with procurement
officials who represent organizations
that are similar to the county. For
example, through NIGP, I’ve met people
like Jennifer Olzinger, with City of
Pittsburgh, Pennsylvania; Sean Carrol,
from the State of New York; and Cathy
Muse, from Fairfax County, Virginia.
I’ve really learned a lot from them.
More recently, I’ve attended a few
events from GFOA and look forward
to attending more. Organizations like
GFOA can provide a broader perspective
about how procurement fits into
large finance organizations and how
having more procurement staff
involved would likely allow for greater
movement of staff between roles in
finance, procurement, and budget.
Looking back, is there anything that
you would have done differently?
Any regrets that you haven’t pursued
a role as a finance officer?
I really don’t think I would do anything
differently. Throughout my career,
I’ve looked out for opportunities where
I can take on new responsibilities
and make decisions based on what
I thought was best for my family and
my professional growth. I love my job
and career!
Throughout the interview, you’ve made
a strong case for how rewarding it can
be to work in public procurement, but if
you’re looking out for new opportunities,
is there a job out there that might tempt
you to leave the public sector?
I’ve been fortunate to work in two
industries in which procurement can
really make a difference, so I’m not sure
there is. On second thought, I would love
to be the chief procurement officer for the
San Diego Padres. Think of the logistics
involved in that role. Not only would you
have procurement responsibilities for
sourcing the equipment, supplies,
and vendors to operate Petco Park,
but you’d also be facing the constant
challenges of supporting your team
of players, coaches, and staff as they
travel all over the country.
Mike Mucha is the deputy executive
director of GFOA.
About CAPPO
The California Association for Public
Procurement Officials (CAPPO)
was formed in 1915 as a nonprofit
organization dedicated to maintaining
the highest standards of professional
behavior and ethical conduct in public
procurement. As the oldest public
procurement association in the United
States, CAPPO works to provide tools
to buyers in the public sector that will
help them develop their professional
skills for their benefit and the benefit
of their agencies. CAPPO helps cities,
counties, schools, colleges, universities,
special districts, and the State of
California build and strengthen fully
effective procurement departments.
CAPPO's ongoing educational programs
and high ethical standards have
provided substantial benefits to these
entities. Good government and good
procurement are mutually beneficial,
and CAPPO is dedicated to both. For
more information or to get involved in
CAPPO, please visit cappo.org.
About NIGP
The Institute for Public Procurement
(NIGP) has been developing, supporting,
and promoting the public procurement
profession through premier educational
and research programs, professional
support, technical services, and
advocacy initiatives that benefit
members and other important
stakeholders since 1944. NIGP’s Certified
Procurement Professional designation
(NIGP-CPP) targets current and aspiring
leaders in the public procurement
profession. NIGP has developed a
strategic partnership with GFOA and
GFOA has relied on the organization’s
professional expertise to help develop
our certification content area and the
educational curriculum offered through
GFOA on procurement topics. GFOA
looks forward to continuing to build
on this relationship as we advocate
for greater procurement and finance
partnership. For more information on
NIGP, please visit nigp.org.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 67

IN PRACTICE | INTERVIEW
AN INTERVIEW WITH
Harpreet
Hora
EXECUTIVE DIRECTOR OF BUDGET SERVICES
FOR ATLANTA PUBLIC SCHOOLS
BY MIKE MUCHA
Mike Mucha, GFOA’s deputy
executive director, spoke with
Harpreet Hora, the executive
director of budget services
for Atlanta Public Schools,
about her experience working
in local government, the role
of a leader in public finance,
the value of relationships, and
her involvement in GFOA’s
Rethinking Budgeting initiative.
Atlanta Public
Schools (APS)
educates more
than 50,000
students,
employs more
than 5,000
teachers across
91 schools and programs, and has an
overall budget exceeding $1.4 billion. At
APS, the budget does not simply outline
revenue and expenditures—it sets the
direction for the district and is designed
to increase equity, instructional quality,
and efficiency while assuring that the
district reaches the mission to graduate
every child, prepared for college and
career. Since September 2021, Harpreet
Hora has been responsible for managing
the development of the annual budget
and implementing the district’s strategic
goals. As the executive director for
budget services, she also works with
the other executive directors in finance
to ensure seamless communication of
internal processes.
APS is recognized as a leader in
school district budgeting—under a
previous executive director, it won
GFOA’s Award for Best Practices in
School Budgeting. The award recognized
the district’s adherence to GFOA best
practices in school budgeting that
focused on strategic alignment and
allocation of resources, collaboration
between finance and other parts of the
organization, and communication.
When Harpreet took on the role of
executive director for budget services,
APS represented a new and bigger
challenge from her previous role as the
budget manager for the City of Roswell,
a much smaller organization that serves
approximately 90,000 people in suburban
Atlanta, Georgia. The APS budget was
almost ten times the size of Roswell’s.
But Harpreet was well-prepared for this
opportunity by her previous experiences
at Roswell and, before that, working for the
City of Atlanta, and in the private sector.
Harpreet said: “To take on any new role,
you draw from experiences you’ve had
in the past. When I started at APS, I felt
prepared based on my past positions, and
also by what I was able to learn pursuing a
few certifications and from the colleagues
I’d had prior.” In fact, the biggest difference
Harpreet noted between APS and the City
of Roswell was that more people were
involved because there are many more
departments and communications among
all the various stakeholders, which could
be challenging. “I didn’t know everyone,”
Harpreet said. “It was harder to get
information and important that I develop
relationships.”
ROLE OF RELATIONSHIPS
Harpreet credits her ability to build
relationships as the most critical skill
she’s relied on. “When I started my
career, I focused on technical skills—
but as I was able to move up the career
ladder, the ability to build relationships,
68

communicate, and build trust became
more important,” she noted. Now,
Harpreet realizes that at every point
in her career, it was important to build
strong relationships both internally
and externally.
Harpreet encourages each of the
seven members of the APS budget
staff to reach out to colleagues. “For
staff in the budget office, having a
strong relationship means that you
can have a tough conversation with a
department and even say no. When you
do say no,” she added, “you also need to
explain why and communicate how the
department can better align with APS
priorities.”
Internal relationships also mean
the APS budget staff can deal with
the complexity of budget issues.
Harpreet noted the importance of
being able to collaborate with human
resources as they both jointly manage
the position budgeting process for
the district. “There is a lot going on
and many opportunities to make a
mistake,” Harpreet noted. “We need to
rely on those relationships, trust our
colleagues, and communicate.”
To better align with new priorities
related to equity in budgeting, APS also
recently created an Office of Equity
and Social Justice. The district has put
equity at the core of its current strategic
plan and uses it to guide budget work.
According to APS, “equity means the
quality or ideal of being just and fair,
regardless of economic, social, cultural,
and human differences among
and between persons.” APS further
defines the concept as “requiring
strategic-decision making to remedy
opportunities and learning gaps and
create a barrier-free environment.”
To help determine how to allocate
resources more equitably, APS uses a
student weighted formula called the
Student Success Funding (SSF) to
distribute resources to schools. The
district is also implementing academic
return on investment (A-ROI), a concept
of evaluating the cost effectiveness of
programs and using that information to
guide decision-making. These changes
will require APS to modernize, and
Harpreet is working with staff across the
district to lead the optimization of cloud
technologies to save time during the
budget process. The district is working to
implement new budget software for use
in central offices and looks forward to
the future when individual school sites
will no longer budget using a series of
Microsoft Excel templates.
APPLYING CAREER EXPERIENCES
TO RETHINK BUDGETING
As Harpreet works to improve the
efficiency of the APS budget process,
she is also participating in GFOA’s
Rethinking Budgeting initiative.
As a member of the project team for
Rethinking Budgeting, Harpreet has been
involved in working with peers to develop
new ideas for how governments can
transform the entire budget function.
About Academic Return on Investment (A-ROI)
When asked about what needs to
change with the way governments
currently do budgeting, Harpreet said
more collaboration and engagement
was necessary with both departments
outside of finance and with the
community. She added that the budget
team needs to be able to explain why,
answer questions, and be transparent
about budget decisions.
Harpreet acknowledged that
departments can be frustrated when
requests don’t result in funding, but “I
think there can be a general view that the
budget department is made up of nerdy
people who only care about numbers.
That is not true. Most people don’t realize
all that goes into preparing a budget
and how difficult it can be to balance
multiple programs with limited funding.”
Harpreet also recognizes the role that
budget staff often play in answering
finance questions from non-financially
focused stakeholders. Before her roles
Academic return on investment (A-ROI) is the practice of scientifically
evaluating the cost-effectiveness of academic programs and then
deciding where to allocate resources accordingly. The rationale for
A-ROI is simple enough: by comparing the learning gains students
have achieved from a program with the cost of that program, school
districts can get the most bang for the buck with their budgets and do
the most good for the greatest number of children.
For more information on A-ROI, GFOA offers a research report that
reviews A-ROI foundations and smart practices. Learn about the
experiences of practitioners who have implemented A-ROI and steps
to put it into practice.
Download the report at gfoa.org/materials/aroi.
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 69

IN PRACTICE | INTERVIEW
BY THE NUMBERS
50,000+
STUDENTS
5,000+
TEACHERS
91
SCHOOLS & PROGRAMS
$1.4 billion
OVERALL BUDGET
58
NEIGHBORHOOD SCHOOLS
19
CHARTER SCHOOLS
5
PARTNER SCHOOLS
5
ALTERNATIVE PROGRAMS
PHOTOS COURTESY OF ATLANTA PUBLIC SCHOOLS
70

leading the budget process for APS
and the City of Roswell, Harpreet was
a senior financial analyst for the City
of Atlanta. And before that, she earned
her CPA (Canada) and worked as an
accountant in several private-sector
positions in the United States, Canada,
Germany, and India. In fact, coming
out of college, Harpreet did not intend
to work for government, focusing
instead on corporate finance. But when
she took a job with the City of Atlanta,
she realized that she really enjoyed
working in the public sector and saw an
opportunity to make an impact. Now she
understands how being well-versed in a
variety of finance areas provides a huge
advantage to the departments that she
serves. While accounting and budgeting
are inherently different, she noted,
both are interdependent. “Many times,
our budget team will get accounting
questions from departments because
of the relationships that we’ve built.”
Pulling from her experience as a cost
accountant and CPA, she is in a better
position to answer the question and
enhance the relationship as a trusted
resource.
THE FUTURE OF BUDGETING
It comes as no surprise that Harpreet
describes the future success of local
government budgeting as encouraging
all governments to break down internal
silos, emphasize the building of trust,
and ensure that departments are
working toward the same set of goals.
She also recognizes the need to continue
developing staff so they’re able to
take on challenges—to be successful
with concepts such as A-ROI or to be
comfortable working in the new cloudbased
budget software, all staff will
need a mix of analytic skills and people
skills. Increased automation and use
of cloud technology to make processes
efficient and save staff time so they can
focus on analyzing data. Use of data
to drive decision-making will change
budgeting in the future. Governments
will have to learn to harness the benefits
of technology if they want to continue
to provide the level of service that they
currently are.
Harpreet added that governments
need to be able to put staff members
“Many people have a perception that government
employees do not work hard enough. I work in
government, and I see staff and leadership work
very hard to provide services for their community.”
in positions where they can be
successful. For some positions,
Harpreet noted, governments may
need to be creative in where they look
for talent. For school districts, for
example, finding staff with experience
in a school setting is helpful for
budgeting because they understand
the terminology and can excel at
building trusting relationships.
Harpreet is also encouraged by
peers she is serving with on the
Rethinking Budget project team
and recognizes the role that GFOA
can play in transforming budget
practices. “Some concepts do take
time to implement,” she noted, but
overall, she’s encouraged by the
quality of information available
and the motivation to improve our
communities. “Government is such
a great place to work,” Harpreet said.
“Many people have a perception that
government employees do not work
hard enough. I work in government,
and I see staff and leadership work
very hard to provide services for
their community.”
Mike Mucha is the deputy executive
director of GFOA.
ABOUT RETHINKING
BUDGETING
The Rethinking Budgeting initiative
is a collaborative effort between
GFOA, the International City/
County Management Association,
and National League of Cities.
This initiative will raise new and
interesting ideas for how local
government budget systems can
be adapted to today’s needs.
For more information, visit
gfoa.org/rethinking-budgeting
FEBRUARY 2023 | GOVERNMENT FINANCE REVIEW 71

TO ENSURE YOU WON’T RECRUIT
THE TALENT YOU NEED
Governments need to be able to successfully recruit talent, but some have a reputation for making it harder than it has to be.
The following not Top 10 list includes common mistakes governments have made, based on the reported experiences of a few
recent job applicants in a survey by GFOA.
Read all our findings in GFOA’s recent research report, “Meeting Demand for State and Local Public Finance Jobs,” which
provides more information about the scale of the challenge and some specific challenges facing the public finance industry.
Read the full report at gfoa.org/meeting-demand-public-finance
1
Following a long hiring process
with no clear timeline. The
hiring process in state and local
public finance can take as long as six
months, compared to 21 days for private
sector finance.
2
Making
the application process
unnecessarily tedious. For
example, some governments
require applicants to reformat or rewrite
their resumes to comply with the
requirements of their recruiting system.
3
Failing
to communicate about
benefits or expectations
of the position. Governments
should use job postings to attract
candidates and include information about
benefits, career paths, work hours, and
scheduling practices.
4
Providing no flexibility on
remote work. While remote
work may not fit as a permanent
strategy for every government, there are
some opportunities where remote work
may be necessary in the short term.
Governments need to provide some
flexibility to allow staff to be productive.
5
Not advertising the salary in
the job listing and/or offering a
salary that’s too low. Outside of
some entry-level positions the salaries are
typically lower in government finance than
in comparable jobs in the public sector.
Governments should provide information
on both salary and other benefits that
would make up total compensation.
6
Creating
strict and unnecessary
eligibility requirements. Degree
or certification requirements
that aren’t strictly necessary reduce the
size of the talent pool.
7
Advertising
jobs as entry-level
when they aren’t. Job postings
should accurately target the
level of experience required to do the job.
8
Assuming
that candidates
will look at the governments
website and apply. Hiring
managers should aim to recruit a
diverse applicant pool. This may require
advertising the position on popular
job boards, through local universities,
or at non-profit or community-based
associations.
9
Not focusing enough on
adjacent talent pools.
Private-sector
employment is increasing, and in
many sectors, it has surpassed its
pre-COVID-19 heights. Finance
employment, in particular, has been
growing steadily for more than a
decade. Government finance can tap
into this talent pool, especially in
entry-level positions, where
governments often offer better
salaries than the private sector.
10
Only look at
candidates with
public sector
experience. Governments need to
recruit outside of government. Total
employment for finance positions in
the private sector has been
increasing. Private-sector finance
professionals can be successful in
public-sector positions. Government
is unique, but GFOA is here to teach
public-sector best practices, and we
would love to help with onboarding
and professional development for
your new hires.
72

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Register by March 17 to save.
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Register by March 17 to save.
gfoa.org/conference | #GFOA2023