FIT Data Stories: What does FIT tell us about Cash balances in Cash-basis cities

Cash is the heartbeat of government operations, especially for smaller cash basis governments. For better or worse, without cash there is no government spending. And without spending, there are no government services. As the old saying goes – cash is king! So how much cash is needed to keep a cash –basis government's operations humming? The proper amount of “cash balance sufficiency” (CBS) for a government depends on each government's spending priorities and what it hopes to accomplish for its citizens. There is no one right number, but industry best practice recommends no less than two months of average spending be held as a cash balance at a minimum. Simply put, CBS shows the number of days a fund could operate based solely on its ending cash and investment balance. To meet the benchmark, the number should be 60 or more. Did you know the statewide average CBS for all cash-basis cities and towns is well above the benchmark but some individually drop as low as 21 days? Interested in how the cash-basis governments in your area were doing with their CBS? Take a look with our interactive infographic based on the 2019 data from the Financial Intelligence Tool (FIT).