Volatile Economic Times Calls for Quarterly Financial Reporting.
Mid-Year Budget Reviews are no longer adequate to keep local governments on track financially, especially since the audit of the prior-year’s Budget and financial statements will take over 6 months to prepare and present to the City Council.
City governments, nonprofit organizations, and businesses, all recognize how uncertain and volatile the economy is right now.
This is why Annual or Mid-Year Financial Reports are no longer acceptable to governing bodies or board of directors as they recognize the growing concern over the looming economic downturn.
It is only through Quarterly Financial Reporting that an organization can proactively identify “trends” and make adjustments in their Budget, spending, and Investments.
Financial Reporting includes a review and analysis of Budgets and Balance Sheets. The Budget reviews Revenues and Expenses, while the Balance Sheet reviews Assets and Liabilities of the organization.
Interest rates are fluctuating wildly right now. Inflation is supposedly coming down, yet it is still over 6% higher than last year.
The Federal Reserve Bank, the US Treasury, and the White House are all working overtime right now to find a way to achieve a “soft landing” of the economy, which is now headed for a recession that is scaring investor confidence, especially bank depositors.
Please consider obligating yourself as CFO or municipal finance officer and bring forward a Budget Review every 3 months, rather than just in January.
And look to move idle cash from non-interest earning bank accounts and invest those monies into safer investments with the US Treasury, Agencies, and even a government investment pool like LAIF.
All for now,
John Herrera, CPA
MuniTemps – Municipal Staffing
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