Annual financial and budget planning is a challenge for many municipalities even in ordinary times. The as yet unforeseeable consequences of the COVID 19 pandemic now make it even more difficult. In the Loanboox webinar, the most important basics and examples for a solid financial management of municipalities were shown. The most important insight: The magic word is “holistic”.
The guide produced by the Fachhoschule Graubünden at the request of the Swiss Association of Municipalities shows how it is done: Mission statement, strategy and legislative plan, plus integrated task and financial planning (IAFP) and finally liquidity planning. Dominik Just, professor of finance and accounting at the University of Applied Sciences Graubünden, explains the individual steps. Click on the image to learn more.
Integrated task and finance plan makes it easier
“There are municipalities that don’t have all that,” he explains, referring to the Swiss militia system and the many small municipalities where financial administration is done on a part-time basis. These municipalities have a much harder time with long-term and sustainable planning of larger projects, Just says. That is why at least the minimal version of the IAFP is recommended – and relatively easy to implement with the guide. “You have to look at financial management as a holistic issue,” says Just.
“The IAFP shows what the impact is on us”.
Patricia Bär makes the theory clear with a case study. The head of the finance department of the city of Bern reports on the financial planning for the new 50-metre swimming hall. The cost was 75 million Swiss francs.
In the video she explains how the project was integrated into the budget planning.
Do not postpone investments
Patricia Bär admits that the city of Bern is also struggling with the issue of new debt: “But that doesn’t necessarily have to do with COVID-19.” Tax revenues were already lower than expected in 2020. The city has reacted with a package of savings measures, but this does not affect planned investments – such as new school buildings or the renovation of sports and water facilities. This makes it all the more important to draw up financial and budget plans that are as accurate as possible.
Andi Burri, Co-Founder and Managing Director Loanboox Switzerland, also feels the uncertainties in daily conversations with financial managers. In addition to Corona-related additional expenditures and lower tax revenues, negative interest rates and the threat of a loss of creditworthiness are a concern for municipalities. “We try to support and advise them with our expertise,” says Burri.