The Keys to a Healthy City Finance Department With Shayne Kavanagh
Mar 24, 2025
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Shayne Kavanagh, a Senior Manager of Research for the Government Finance Officers Association, shares valuable insights on local government finance. He discusses the crucial role of finance officers as 'decision architects' and offers innovative strategies for effective budgeting and financial reporting. The conversation delves into balancing short-term demands with long-term planning, the importance of bond ratings, and understanding complex financial reporting issues. Kavanagh emphasizes collaboration and transparency as key to enhancing city fiscal health.
Finance officers are evolving into 'decision architects' by actively shaping the decision-making processes in local governments beyond traditional accounting.
The GFOA's rethinking budgeting initiative promotes innovative strategies like target-based budgeting to enhance local government fiscal health and accountability.
Long-term financial planning is essential for sustainability, requiring clear frameworks that empower finance officers to align community needs with fiscal responsibility.
Deep dives
Strong Towns Accelerator Program
The Strong Towns Accelerator program encourages community engagement in housing reform, set to commence in April. This six-course series targets individuals eager to drive change in their cities, providing essential insights into best practices for creating strong towns. Interested participants are directed to sign up through the Strong Towns website, with support available via email from staff. The program emphasizes hands-on involvement and aims to equip individuals with the necessary tools to implement change effectively.
Understanding GFOA's Role
The Government Finance Officers Association (GFOA) represents finance officials at local and state levels, aiding in budgeting and financial reporting. Established in 1906, GFOA provides essential training and resources for finance officers, promoting professional standards to foster accountable financial management in communities. Their mission includes reviewing and awarding achievements in fiscal reporting and budgeting, thereby encouraging best practices among professionals. This support enhances the overall effectiveness of local government financial operations.
Rethinking Budgeting Strategy
The GFOA's rethinking budgeting initiative addresses the issues surrounding local government financial management by offering innovative strategies. This approach likens the government budget to a common resource, exploring the challenges of competing interests and resource sharing among various stakeholders. Key concepts within this initiative include target-based budgeting, which empowers departments to allocate resources effectively without overspending, thereby reducing budget padding. By implementing these strategies, local governments can transform their financial practices and improve overall fiscal health.
The Evolving Role of Finance Officers
Finance officers are increasingly seen as decision architects rather than mere bean counters, tasked with shaping the decision-making environment within local governments. Their responsibilities extend beyond traditional financial reporting; they must provide thoughtful analyses and innovative solutions that help elected officials navigate complex financial landscapes. This shift in perception emphasizes the importance of finance officers in facilitating informed decisions rather than simply enforcing compliance. By fostering trust and communication, finance officers can enhance their collaborative relationships with elected officials and contribute effectively to community planning.
Long-term Financial Planning
Long-term financial planning is crucial for sustainable local government operations, with the GFOA advocating for comprehensive strategies to manage fiscal health. Currently, a significant percentage of local governments engage in some form of long-term planning, reflecting progress in this area. Effective planning requires clear definitions of a balanced budget, adaptable policies for managing one-time revenues, and reserve regulations. These frameworks empower finance officers to make decisions that align with community needs while ensuring fiscal responsibility over time.
This week, Chuck is joined by Shayne Kavanagh, senior manager of research for the Government Finance Officers Association (GFOA). The GFOA provides training and resources to city finance officers. In his role, Kavanagh develops new approaches to budgeting, financial reporting and revenue that can better address the problems local governments are trying to solve.
Chuck and Kavanagh discuss the role of finance officers as “decision architects.” Kavanagh gives a closer look at the world of local government finance and shares some tactics that finance officers can use to improve their processes.
