How often does GFOA recommend that governments review their financial services contract?

The correct answer to how often governments should review their financial services contracts, according to the Government Finance Officers Association (GFOA), is every five years. This recommendation is grounded in the best practices that emphasize the need for regular evaluation of such contracts to ensure they remain competitive, relevant, and aligned with the evolving needs of the government entity.

Periodic reviews allow governments to assess the performance of the services rendered, verify compliance with the terms of the contract, and consider any necessary adjustments based on changes in the financial landscape or operational requirements. By aligning the review cycle to a five-year timeframe, governments facilitate a thorough examination that balances the need for stability in their financial operations with the necessity of ensuring they are maximizing value and efficiency.

The other suggested review frequencies do not align with GFOA's best practices for financial services contracts. The recommendations are designed to provide ample time for governments to assess service delivery and market conditions while avoiding the inefficiencies that could arise from more frequent reviews, which might not yield significant new insights or improvements. Additionally, the absence of a specific recommendation indicates a recognition that while regular reviews are important, the specifics can vary widely based on individual circumstances and needs.