APWA Book Review
A PUBLIC FINANCE PRIMER FOR PUBLIC WORKS PROFESSIONALS: What You Need to Know But Didn't Know How to Ask
46 pp * 2004 * APWA * Lynda M. Dennis
Financial administration does not take place in a vacuum. Nowhere is this truer than in the relationship between the finance and public works functions in a local government environment. As such, this book identifies, discusses, and explains the numerous ways in which the public works and finance functions interact. It also explains the importance of cooperation and teamwork between these two functions in such mission-critical areas as planning of the acquisition, construction, and financing of long-term capital improvement or facilities. Additionally, the concerns, issues and goals of the local government finance and public works professional are described in this book.
This book is designed for the newly-promoted public works manager or director of the public works professional wishing to one day rise to these ranks. It is intended to provide a general overview of the finance function at the local government level as well as give insight into the challenges and issues local government finance officials face on a daily basis. Readers of this book will find that it provides the basics of public finance administration at the local government level. The unique governance, demographic, and operating characteristics of each local government should be superimposed on the concepts discussed in this book for optimal understanding.
The publication, divided into four chapters, focuses on:
Chapter 1: Overview of Public Finance...So, that's why finance professionals are so inflexible! This chapter discusses some of the basic personality traits of the typical local government finance professional as well as the pressure that external financial reporting places on them. It also looks at the various types of audits, why they are needed, and the audit process and how it disrupts the finance function. Readers will also find that it addresses the conundrum the finance professional faces trying to balance the need for adequate quality services with limited financial resources.
Chapter 2: Accounting and Reporting...A place for everything and everything in its place. Financial condition and the role accounting principles and auditing standards play in it are outlined in this chapter. The primary purpose of external financial reports is discussed in terms of providing information for decision-making and demonstrating public accountability. This chapter also focuses on the main concepts of fund accounting in the context of the local government organization. Accounting standards, the standard setting process, and the importance and impact of governmental accounting standards is explained.
Chapter 3: Relationship of the CIP, Capital Budget, and Strategic Plan...What can be dreamed, can be achieved. The relationship of the capital improvement plan and capital budget to a governmental organization's strategic plan is the focus of this chapter. Ways in which the public could be involved in the capital improvement planning process are identified and discussed. Also addressed are a number of analytical and quantitative evaluation techniques used by finance professionals.
Chapter 4: Relationship of the CIP and Capital Budget to Debt and Cash Management...Putting your money where your mouth is. How debt and cash management is impacted by the capital improvement plan and the capital budget is discussed. An overview of financing strategies for capital improvements and facilities is given and the concept of intergenerational (or inter-period) equity is introduced. Chapter 4 also defines and explains a number of technical terms related to longer term bonded debt and the debt issuance process. The relationship of accurate project cost estimates and the projected payment timeline to the amount of bonds issues is also explained.
This book provides an overview of the finance function and is intended to assist the newly-promoted public works manager or director (or those aspiring to that level) in understanding the role they play in it. Also, the book attempts to explain why finance professionals act the way they do and to identify some of the external pressures under which they operate. A number of areas where it is essential for the finance and public works professional to work together are identified and discussed. Hopefully after reading this book, public works professionals will be in a better position to effectively work with the finance professionals in their local governments. Who knows, maybe sometime in the near future someone reading this book will write its equivalent for local government finance professionals!
For more information on purchasing this book and other American Public Works Association books, please visit the APWA Bookstore online at www.apwa.net/bookstore or call the Member Services Hotline at (800) 848-APWA, ext. 5254.