Does GFOA recommend that governments use one bank to perform all of their banking services?

The correct answer identifies that governments may prefer to engage different vendors for various banking services rather than relying on a single bank for all their needs. This approach allows governments to take advantage of specialized services that can be tailored to their specific requirements. For instance, traditional banking services may be best provided by one financial institution, while credit card processing could be handled more effectively by another that specializes in that area.

By engaging multiple vendors, governments can enhance the efficiency and effectiveness of their banking operations. It allows them to choose providers who demonstrate expertise in specific areas, potentially leading to better service and more favorable terms. Additionally, by diversifying their banking relationships, governments can mitigate risks associated with dependence on a single financial institution.

This answer reflects the GFOA's guidance on optimizing banking services for governmental entities by recognizing the benefits of specialization and competitive advantages rather than adhering to a one-size-fits-all approach.