GFOA releases new resource for recovering from financial distress.

The Government Finance Officers Association (GFOA) has just released an online resource to help public officials cope with budgetary difficulties and ultimately improve the financial health of their governments. The new Web site is available at www.gfoa.org/financialrecovery

The site walks you through a 12-step process for dealing with financial distress. The process is categorized into three major stages. The first stage starts with establishing your jurisdiction's financial condition and communicating it to others in order to create a shared understanding of the situation and a common basis for taking action. No single public official can carry out recovery alone, so this stage--called the bridge stage--includes forming a leadership team to guide the recovery process. The bridge stage also covers stabilizing financial condition with short-term retrenchment or fiscal first aid tactics to give stakeholders confidence that something is being done and to buy time to develop more strategic, longer-term solutions. The bridge stage concludes with developing a short-term recovery plan.

The goal of the second stage--the reform stage--is to carry out the recovery plan and to further develop and implement long-term recovery strategies. In this stage, the organization should also start developing a long-term financial plan to guide a consistent, multi-year approach to improving financial health and to institutionalize good financial management practices.

The goal of the third stage--the transformation stage--is to institutionalize long-term financial planning and to become more adaptable to changing conditions, more resistant to financial distress, and better able to regenerate in the face of...