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GFOA Newsletter
June 15, 2017
EMPLOYMENT ADS  |  TRAINING  |  BEST PRACTICES
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Understanding P3 Opportunities

There’s been a lot of talk about using public-private partnerships (P3s) to build, repair, and manage U.S. infrastructure. And while there can be short-term advantages in giving the private sector a stake in public-sector infrastructure projects, there are questions about the extent to which they create better long-term performance. P3s are the right choice for some endeavors, but if care isn’t taken, taxpayers can wind up bearing more of the cost than they should.

“Taxpayers or users are going to need to pay for private infrastructure just as they need to pay for public infrastructure. You’re going to need to get revenues from somewhere,” a New York Times DealBook article states. “Whether through fees like parking meters and tolls on a road, or through government payments to the contractors, such projects are ultimately supported by taxpayers.”

In situations where governments essentially guarantee substantial payments to their private partners for leases that extend beyond the life of the project, P3s sometimes “divert extra revenue from the public sector to the private sector,” according to the article.

P3 deals are used to finance infrastructure in Canada, Australia, and Europe more than in the United States. “There is a reason for that,” the article says. “America is one of the few nations that exempt the interest on local and state bonds from federal taxes. As a result, the nation’s municipal bond market is bigger and more developed than in most other countries, and that makes public financing of infrastructure much more attractive, lessening the need for private partnerships.”

“There is a significant misunderstanding of the way public-private partnerships actually work,” the article noted. GFOA recommends that governments make sure they understand what is at stake and make informed, strategic decisions on whether or not to pursue P3 opportunities. Finance officers should be involved throughout the process of a public entity’s consideration of potential P3 opportunities. And before deciding to enter into a P3 agreement, governments should analyze it carefully, including all financial impacts. GFOA’s Public-Private Partnerships advisory provides a list of key considerations to help financial officers decide whether a P3 is right for their governments.

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Association News
BE AWARE: Governments Being Hit by Sophisticated Electronic Fraud Scams 

All governments should be aware of recent electronic fraud and other sophisticated measures being used to access banking account and other payables information. These schemes include sending extremely realistic e-mails from fake or hacked e-mails disguised as known vendors, including banks. Governments should exercise caution in their handling of e-mails announcing changes to a vendor’s ACH or other account information, or from vendors requesting the government’s account information. GFOA is cautioning governments to be aware and put safeguards in place to prevent fraud.

At GFOA’s annual conference last month in Denver, the Addressing Fraud in Electronic Payments session focused on this topic. Speakers provided their own tales of how their governments’ accounts had been or were nearly breached by sophisticated fraud attempts. Slides from the presentation, which are available on the GFOA website, provide valuable information about establishing policies and procedures to prevent and react to this type of fraud, as well as details about how it is executed.

Some key elements to help governments avoid being the victim of fraud include the following recommendations:

  • Do not make any changes to vendor information, particularly payment addresses and/or bank account information, without carefully reviewing the information provided and corroborating the change through other sources. 
  • Do not use e-mail to confirm changes to vendor payment information—if the government or vendor has been recently hacked, you will likely be contacting the fraudster rather than the vendor. Verify changes by phone or regular mail, using information from existing vendor records.
  • Revise the government’s forms to require that vendors provide both the old and new bank routing and account numbers or billing addresses when requesting a banking change or a payment mailing change.
  • Remove vendor change forms from the government’s website to help avoid this kind of scam. Instead, ask vendors to contact staff directly for these forms.
  • Communicate with staff and outside departments about the importance of prioritizing outstanding balance inquiries from vendors and resolving them quickly. Payment questions need to be addressed as quickly as possible because they may uncover vendor or payment fraud. Again, insist that staff use telephones, faxes, or the postal service for correspondence rather than e-mail to address issues with vendors.

If you are aware of fraudulent account routing and numbers, notify your bank and law enforcement. They may already be involved in a related investigation and might be able to help.

Download the slides from the GFOA conference

Become a Standing Committee Member

Applications to become a GFOA standing committee member are being accepted through July 28, 2017. Serving on a standing committee is an excellent opportunity for GFOA members to contribute their experience and knowledge to the entire membership. 

GFOA’s seven standing committees meet twice each year and develop best practices, advisories, and policy statements for the approval of the Executive Board and membership.  GFOA associate members from the private sector can also apply to be advisors to one of the committees.

GFOA’s seven standing committees are: Accounting, Auditing and Financial Reporting; Canadian Issues; Economic Development and Capital Planning; Governmental Budgeting and Fiscal Policy; Governmental Debt Management; Retirement and Benefits Administration; and Treasury and Investment Management.

  • Complete the application here.
  • If you are a current GFOA committee member please complete the application for re-appointment here.
  • If you're interested in serving on GFOA's Committee on Canadian Issues, contact Jim Phillips.

If you have any questions about the committee application, please contact Emily Brock.

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Seven Opportunities to Increase Your Knowledge of Accounting, Budgeting, and Technology

Don’t miss a chance to sign up for GFOA’s following training seminars in California at the Hyatt Regency Sacramento:

Save 10% on the registration fee when you sign up and pay in full by July 21. If you register with three or more colleagues for the same seminar, you will receive 10% off each registration fee. (To receive the group discount, registrations must be received and paid together. This discount cannot be applied to online training registrations.) 
Register today! (Registration form / Online)

A block of rooms has been reserved for GFOA attendees at the Hyatt Regency Sacramento. Based on availability, GFOA’s group rate is valid until June 30. Click here for more information about available rates.

To learn about activities for your stay, go to Visit Sacramento. If you have any questions about GFOA’s training seminars, contact GFOA.

For additional training opportunities, go to GFOA’s training schedule

Jurisdictions Win Popular Annual Financial Reporting Award for First Time

GFOA would like to congratulate the following jurisdictions for receiving GFOA’s Popular Annual Financial Reporting Award for the first time: Town of Wickenburg, AZ; Napa Sanitation District, CA; San Bernardino County Employees' Retirement Association, CA; City of Greenville, NC; County of Los Alamos, NM; Xenia Community School District, OH; City of Portland, OR; Pennsylvania Public School Employees' Retirement System, PA; Virginia Retirement System, VA.

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News Links
Improving the Lessons Learned Meeting

We’ve all heard many times that we need to schedule a “lessons learned” meeting at the end of a big project to improve our strategies in the future. There are those, however, who feel that this reinforces a mindset of fixing rather than creating, according to SmartBrief. Whether you agree or feel that statement is overly broad, the article offers some ideas you might want to consider:

  • “The idea that a variable—among hundreds—is uniquely responsible for a mistake is simplistic and misleading, as action happens in a context and many forces are at play.” Ignoring this can lead to creating a list of do’s and don’ts that won’t really help improve the organization’s next project.
  • “Deep learning can’t just be about observable actions. It’s about reflection, understanding the big picture, doubting.”
  • “Identifying errors and committing not to repeat them is an ineffective way to change.” The points identified in lessons learned meetings are often misunderstood or forgotten, the article says. “People don’t remember how to apply lessons from a project that happened long ago to a new one. Even assuming that an efficient knowledge system exists to preserve findings, situations change and grant different priorities or prescriptions for success.”

“Real change comes from a deeper understanding of reality, not from a superficial commitment to avoiding past mistakes,” according to the article. To avoid these issues, the author suggests trying the following:

  • Do a pre-mortem instead of post-mortem. “Imagine that the project has already happened and we are examining the issues encountered. This is powerful because it allows you to take measures early enough to deal with the predictable snafu you will find on your way.
  • Institutionalize 30-minute learning sessions during the project, not at the end.
  • “As some inevitable contextual issue will emerge, deal with them at a higher level through an early agreement with key stakeholders.”
  • Develop your team’s ability to be comfortable with ambiguity.Cultivating this capacity will equip your team with key skills to successfully operate in organizations in general.”
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Getting Better at the Art of Persuasion

Persuasion isn’t about winning a war of ideas, FastCompany notes. If you try to convince someone that their ideas are wrong, they tend to get defensive—it’s human nature. Persuasion is about making the other party feel that you’re both on the same side, and it requires an acknowledgement about what you already agree on, “and how your difference of opinion starts from a shared premise.”

You’ll also need to really listen and make others believe that they’re being heard. “One simple way to let others know that they’re being heard is simply to repeat back or paraphrase something you’ve just heard them say, then ask for clarification.” In a similar vein, let others talk more than you do, and listen for opportunities to agree with them. Follow that up by praising anything about the other person’s argument that you appreciated. The trick is that it must be sincere.

Also, try to make others think that your idea was actually theirs the whole time. This one isn’t always possible, but the idea is to “make suggestions, framing your ideas as possibilities. It’s all about leaving the other person feeling empowered enough to make their mind up themselves.”

Finally, make sure you come across as confident and knowledgeable, since “we’re predisposed to put our faith in people who sound confident and appear to know what they’re talking about.”

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Editor: Marcy Boggs  |  Executive Director/CEO: Jeffrey Esser

The GFOA Newsletter (ISSN 1051-6964) is published weekly by
the Government Finance Officers Association of the United States and Canada.
Correspondence regarding editorial and/or business matters should be sent to
GFOA, 203 N. LaSalle St., Suite 2700, Chicago, IL 60601-1210. Phone - 312/977-9700 FAX - 312/977-4806.

 


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