Source: Jon Johnson and Chris Fabian, Public Management, Vol. 91 no. 9, October 2009
The current fiscal reality for most if not all local governments is challenging and bleak, to say the least. Declining revenues, slower if not stagnant growth, and depleted reserves are factors forcing the local government manager to become more involved as a partner with the finance officer in order to identify the symptoms and causes of the organization’s fiscal distress. Working together this way, they can use the diagnostic analysis performed to correctly prescribe and apply the most appropriate and effective treatments.
By asking a series of basic diagnostic questions, the manager is able to gain a better understanding of the organization’s fiscal health. It isn’t enough, however, to simply pose the questions to the finance officer. It’s also necessary to follow up with another question: Can you show me? Without documented and demonstrated analysis supporting the answer, the manager may be relying on inaccurate assumptions or unsubstantiated conclusions that don’t treat the real symptoms.