Measuring and evaluating the financial condition of local government

Turnkey solutions to measuring and evaluating the financial condition of local government do not exist. The contextual diversity between local jurisdictions precludes a one-size-fits-all approach; however, there are more similarities than differences. While many impediments, (lack of normative standards, lack of empirical evidence, and perceived ambiguities regarding the efficacy of various approaches, shifting intergovernmental relationships, and lack of control over revenue generating capacity) present, techniques, tools, and methodologies do exist. The key lies in developing jurisdiction-specific analytical models to routinely monitor, assess, and identify potential issues early enough to avoid and mitigate fiscal vulnerabilities. Developing such a framework requires intimate contextual and domain knowledge, as well as awareness of the multi-causal relationships that exist between a jurisdiction's external environment, its internal finances, and its management practices.