The purpose of this First 5 Financial Management Guide is to help commissions establish and refine their financial management policies and practices. The guide contains best practices, standard practices, and in some instances, emerging practices in governmental finance. The policies and procedures included in the Guide have been tailored where possible to the specific needs and environment of First 5 commissions.
The Association and the State Commission contracted with the Government Finance Officers Association of the United States and Canada (GFOA) to prepare the Guide and created the First 5 Fiscal Technical Assistance Leadership Committee, comprising local financial managers and executive directors as well as State Commission staff, to guide the effort. The revisions and additions to the second edition were guided by extensive reviews of the First 5 Fiscal Workgroup and research by the GFOA.
This guidance is provided as a resource to assist commissions in the development of their financial policies and practices and is not intended to be mandatory. To the greatest extent possible, the guide relies on practices that are required by Proposition 10 enabling legislation or other sections of the state statutes governing First 5 commissions, and those that have been established by nationally recognized sources such as the Governmental Accounting Standards Board (GASB) and the GFOA. The guide also builds on work previously commissioned by the First 5 Association, specifically in the areas of long-term financial planning, fund balance reporting, and accounting and financial reporting.
The guide has been developed in response to the First 5 Association's identification of priority areas, based in part on an assessment of commission financial management conducted by the GFOA in 2004. The areas of focus include: budgeting, accounting and financial reporting, investment management, contracting, and select items such as administrative costs definition and limits. Each chapter covers one topic and includes recommended policy statements, model procedures, references to model documents, examples from commissions, and additional resources. Additional chapters may be developed in the future, such as the Risk Management chapter added to the second edition. A specific focus throughout the process was to ensure that the guide contain financial management policies and practices applicable to all commissions, whether small or large, independent or county-affiliated.
The committee and the GFOA team met eight times during development of the guide to develop concepts and review and revise chapters. Committee members contributed significantly to the guide by providing numerous improvements to the text and examples of First 5 best practices from their commission operations. During the update of the guide, GFOA met twice in person with members of the Fiscal Workgroup and held numerous conference calls to review and revise chapters.
The final document is presented in electronic format so that readers can quickly access specific sections and click on links to definitions, model documents, examples, and other resources. The guide is a living document – it will be updated as required to reflect changes in the First 5 environment as well as in national best practices and financial management standards.