Chapter 8. Post-Issuance Debt Management Requirements
This chapter focuses on best practices regarding the development and administration of guidelines, policies, procedures, and plans to track and report on the use of bond funds in compliance with federal tax law and other requirements and obligations, including the terms and conditions of the borrowing, compliance with accounting and expenditure rules, and reporting and transparency. For purposes of this discussion, bond funds encompass not only the proceeds received from the sale of the bonds and the accounts into which the proceeds are deposited but also those funds dedicated to the repayment of debt service on the bonds and associated reserves and interest earnings (referred to in this chapter collectively as “bond funds”).
Through organizations such as the California State Controller’s Office, U.S. Government Accountability Office (GAO), and the Committee of Sponsoring Organizations of the Treadway Commission (COSO), abundant resources provide guidance on the development of financial and fiscal control, including internal control systems. When applied consistently and correctly these controls can provide both the agency and the public an assurance that government funds are being properly managed and accounted for. Internal control practices designed to oversee a public agency’s administration of general operational funds should also include the disbursement of bond funds. To incur debt, keep records, and report on expenditures of bond funds, however, may require processes different from those set up to administer other governmental funds.