The first step toward achieving fiscal stability is gaining an understanding of your local government's fiscal condition. This can be done by closely monitoring actual revenues and expenditures against those projected in the budget, understanding reserve levels and the consequences of drawing these down to cover ongoing budget shortfalls and knowing your cash flow situation throughout the year. The next step is to get a sense of how these factors will play out over time, affecting your fiscal condition in the next few years. A multiyear plan allows you to see what stresses await your local government, and allows you to address these by setting priorities of what services will be funded with anticipated revenues over the long-term
The questions in this self-assessment should help you assess whether you have the necessary information to evaluate the state of your municipality's financial condition now and in the future.