using fit to tell your government’s story
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How FIT Financial Health Indicators Tell Your Story
Niles Kostick and Duane WalzCenter for Government Innovation
IACC Annual ConferenceOctober 20, 2021
Using FIT to Tell Your Government’s Story
Presenter introductions
Duane WalzData & Business Systems SpecialistSAO’s Center for Government Innovation
Niles KostickFinancial Management & Data Tools SpecialistSAO’s Center for Government Innovation
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About the Center
• Customized Lean facilitations
• Team-building and leadership workshops
• Best practices resources & checklists
• Cybersecurity resources
• Technical advice and training videos
• FIT
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What is FIT?
RCW 43.09.230
• Requires local governments to submit annual fiscal report to SAO
• Requires SAO to publish the data from the annual report and make it available to the public.
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Who’s using FIT?
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Today’s agenda
• The five indicators in FIT• Cash balance sufficiency• Changes in cash position• Governmental funds sustainability• Debt load• Enterprise self-sufficiency
• Building the story
• FIT training
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Understanding the indicators
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Indicators aren’t scorecards
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Tips for local governments
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• Understand why your data looks the way it does
• Ensure the data is correct
• Consider the factors that led to the data
• Compare the current year to your financial statements
• Utilize SAO’s financial checklists
Cash balance sufficiency
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Meaning:The number of days a fund(s) could operate based solely on its ending cash and investments balance
Benchmark: At least 60 days
Importance:Ensures the government has enough cash on hand to operate, as well as deal with unexpected costs or emergencies
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Change in cash position
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Meaning:The percent change in ending cash and investments compared to the prior year
Benchmark: Greater than 0%
Importance:Demonstrates whether the government has the ability to build reserves or if they’re using up their savings
Governmental funds sustainability
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Meaning:Spending is in line with the revenue received (includes expenditures and debt service)
Benchmark: Greater than 0%
Importance:
Demonstrates if the government is living within its means. Greater than zero indicates the government has funds for capital improvements or to build reserves
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Debt load
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Meaning:How much of the government’s revenues are being used to make debt payments
Benchmark: Less than 12%
Importance:Issuing debt is not uncommon to finance capital improvements; however, at certain levels it can reduce financial flexibility and potentially become a burden.
Enterprise self-sufficiency
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Meaning:Enterprise funds are generating enough revenues to cover costs to operate and pay debt service each year
Benchmark: Greater than or equal to 0%
Importance:
A ratio greater than 0 indicated that enterprise funds are recovering expenditures and debt service through rates. A ratio less than 0 indicates the enterprise funds had to borrow from the past or the future or be subsidized by other means
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Let’s go live
Building the whole story
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Building the whole story
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Building the whole story
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Building the whole story
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How to get FIT
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Questions
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Niles KostickFinancial Management & Data Tools Specialist
For more information:• Phone: 564-999-0818• Email: [email protected]• Website: sao.wa.gov
Contact Information
Duane WalzData & Business Systems Specialist