ABSTRACT
In the wake of the New York City experience, financial institutions that hold municipal bonds, accounting and finance professionals, state and federal legislators, and citizens throughout the country have asked themselves whether what happened in New York could also happen to their local governments. This chapter examines how the financing and financial practices of a local government affects its performance. For this purpose, financing and financial practices are defined as the way in which local governments obtain financial resources and restrict, record, and account for their use. The chapter explains how the Flint's Retirement Fund obligations and contributions had increased rapidly. The analysis of financial practices within Flint’s city government highlights two improvement opportunities that are beyond the control of city-government officials: the development and implementation of standard accounting and auditing principles and the elimination of restrictive financial requirements imposed by the state of Michigan and the federal government.
