Author: Whitney Afonso (page 1 of 4)

One Working Capital Management Strategic Tool: Interfund Transfers

By Michelle Lofton and Mikhail Ivonchyk

Working capital management is a managerial strategy that monitors and uses current assets (e.g., cash, accounts receivable, and inventory) and current liabilities (e.g., accounts payable and notes payable) to ensure smooth operations. The purpose is to maintain cash flows for liquidity to meet short-term operating expenses and obligations. This integral part of sound financial management uses a variety of strategic tools to manage cash flows. These can include the use of unrestricted cash, savings, interfund borrowing, interfund transfers, delaying payments, receivables, a line of credit, direct lending arraignments, and short-term debt. Yet, little academic research on governments has evaluated the process for selecting different tools, the policies governments have in place to implement them, and the consequences of using one tool over another.

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GiveUNC 2022

SUPPORT the UNC SCHOOL OF GOVERNMENT

When Dean Mike Smith asked me to join the UNC School of Government Foundation Board in 2014, I was honored to have the opportunity to work in support of an institution that has done so much for my home state of North Carolina. I also feel fortunate, however, to have had the opportunity to do this work alongside Mike.

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In this post I will be answering some common questions regarding the Certified Local Government Budget Officers Program or CLGBO.  To be clear this is what had been referred to as the CBEO (Certified Budget and Evaluation Officers) Program.

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So, Your Jurisdiction is Thinking of Starting a Revenue Manual…

Consulting and updating your revenue manual is the first step of the administrative process for revenue forecasting.  At least, that is what I say when I teach revenue forecasting.  Of course, when I then turn to the course participants and ask how many of them have revenue manuals in their jurisdiction only one or two raise their hands.  In fact, there are some years when no one raises their hand.

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Fiscal Impacts from COVID-19–Revenue Structure Matters

Guest Contributors: Hai (David) Guo and Can Chen

What is the most significant fiscal challenge for the municipal governments facing the unexpected outbreak of the COVID-19 pandemic? It is no surprise that Florida city managers placed the forecasts for the pandemic’s impact on local revenues as the top priority, as local governments are revenue-driven entities. The tradeoff between revenue growth and stability has always been a concern for local governments. With procyclical fiscal policy, local governments usually face abrupt revenue shortfalls and high demand for public service during economic recession. The COVID-19 pandemic-induced recession is no exception. Furthermore, there is tremendous uncertainty regarding the duration of the pandemic, the magnitude and requirement of federal government aid, and the public’s behavioral change.
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GiveUNC

Today is GiveUNC, the annual university-wide day of giving at UNC-Chapel Hill. Support from this event has a tremendous impact on the School of Government’s ability to continue providing advising, education, and support to North Carolina public officials. Gifts of all sizes make a meaningful difference. We hope you will consider making a gift today.

And as many of you know, David Ammons is set to retire at the end of the spring. David has been a critical resource to the state and to the NCLGBA – teaching important programs around performance measurement and management, doing sessions at our conferences, and consulting with individual communities.  A scholarship honoring David’s commitment and service to the state and UNC MPA has been established. If you would like to donate to support this scholarship, you can do so here.
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On Demand Webinar from UNC’s Tax Center on State Response to the Pandemic

Recently I participated in a webinar for Kenan Flagler’s Tax Center.  It covers state responses to the pandemic and policies being considered.  While it is not focused on North Carolina or local governments, I think there is still much in there that is likely of interest to you all.  Especially because we all know that what happens at the state level impacts the local level.

And my co-presenters (their bios are at the bottom) were amazing!  One was named “The Most Influential Person on the Planet in State and Local Tax” by State Tax Notes and the other was identified by State Tax Notes as the “single most influential person in state taxation” and named as the publication’s inaugural Person of the Year.

The webinar is available here.
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Sales Tax Considerations During the Pandemic

I have been having a great deal of conversations with folks across the state about what is going on with their sales taxes (and occupancy and food and beverage taxes).  What has happened versus what was expected for FY21 and what they are thinking about for FY22 now that local governments are starting to begin their budget processes.  I thought it might be useful to share some of the questions I have been getting and my answers to them and some of my broader thoughts about sales taxes and the pandemic, though it is no crystal ball.  I am going to structure it like a q&a.  I am not covering everything here and please reach out if there is more than I can help with.

 

  • Q: Our sales taxes are recovering quickly, what are you seeing other places in the state?
  • A: We are seeing that sales taxes have recovered more quickly than most people anticipated. That is great news, but I think a dose of caution should accompany it.  First, we see a bump starting in in the June collections (so sales for the month of May) where it went from down 13.3% year-over-year to down 4% year-over-year and then by July (so June sales) it was up year-over-year by 10.75%.  So that is all really promising, but we have to keep a few things in mind.  1) That is right when the state moved into Phase 2 and there may have been pent up demand. 2) That is when we have more generous unemployment benefits and federal stimulus, so people had more disposable income than they might otherwise have had.  3) Some people were deferring payments on rent and/or utilities, so they had less income than it looked like from their spending in that period.  Also, that trend is not universal.  Some areas are doing much better and others are having a slower recovery.

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Update: The Impact of the COVID-19 Crisis on Local Government Budgets for FY21

In a previous blog post, The COVID-19 Crisis and How North Carolina Local Governments are Budgeting for It, I laid out the results of a survey that the NCLM and the NCLGBA had conducted to counties and municipalities across the state in April.  In this week’s blog post I am going to provide an overview of an updated survey that was send out in May.  This survey had fewer respondents, but also provides more up-to-date information about the strategies and plans that local governments in North Carolina have, with another full months of information and better understanding of how COVID-19 is impacting their jurisdiction.
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Webinar: Budgeting in the Pandemic

As governments are nearing the end of budget season in these uncertain times we want to make sure you all are aware of some of the resources available from the School of Government and our partners.  There are many COVID-19 resources at the UNC SOG dedicated Microsite.

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