Financial policies can provide a solid foundation for sound public agency fiscal practices.

Adopted by the governing body, such policies provide:

• A means through which the governing body can communicate its collective policy judgments and goals to staff, the public and others.
• Direction to staff and standards against which
  • Current practices can be measured and
  • Proposals for changes in practices can be evaluated.

Ratings agencies (who assess local agencies’ credit for borrowing) also look at local agencies’ financial policies; well crafted polices can mean higher rating grades which can translate into lower borrowing costs.

For more information, including questions to ask about financial policies, see information at right.