What does GFOA recommend governments utilize for the safekeeping of their investments?

The Government Finance Officers Association (GFOA) recommends that governments utilize an independent third-party custodian for the safekeeping of their investments. This recommendation is rooted in the need for enhanced security and oversight in the management of public funds.

Using an independent third-party custodian helps ensure that the assets are safeguarded in a way that minimizes potential conflicts of interest and increases accountability. An independent custodian is not involved in the investment management process, which allows for greater transparency and reduces the risk of misappropriation or mismanagement of funds.

This practice aligns with best practices in public finance and promotes confidence among stakeholders, including taxpayers and government officials, about the prudent management of public resources. By requiring the use of a third-party custodian, governments can better protect their investments from internal and external risks.