IDEAS home Printed from https://ideas.repec.org/a/bla/pbudge/v42y2022i2p171-195.html
   My bibliography  Save this article

Financial manager professionalism and use of interfund transfers: Evidence from Georgia counties

Author

Listed:
  • Michelle L. Lofton
  • Mikhail Ivonchyk

Abstract

Public managers strategically use resources to smooth out cash receipts and disbursements. As a cash flow management tool, managers can use interfund transfers, which are flows of assets without equivalent return flows and without repayment. This study asserts that managerial professionalism, in the form of a full‐time finance director, drives the likelihood of interfund transfers. Using 2010–2017 data from Georgia counties, hurdle model results indicate that full‐time finance directors are more likely to use interfund transfers and increase their level. This finding demonstrates the role of financial management expertise in increasing the strategic options available to manage cash flows. Applications for Practice Local governments with a full‐time finance director use more interfund transfers as one working capital management strategy to manage cash flows. Results from this study provide a justification for local governments to hire a full‐time finance director to improve the array of financial management strategies accessed. Local governments that increase tax base diversity have reduced engagement for General fund interfund transfers in, while higher levels of reported cash generate larger amounts of transfer activity.

Suggested Citation

  • Michelle L. Lofton & Mikhail Ivonchyk, 2022. "Financial manager professionalism and use of interfund transfers: Evidence from Georgia counties," Public Budgeting & Finance, Wiley Blackwell, vol. 42(2), pages 171-195, June.
  • Handle: RePEc:bla:pbudge:v:42:y:2022:i:2:p:171-195
    DOI: 10.1111/pbaf.12301
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/pbaf.12301
    Download Restriction: no

    File URL: https://libkey.io/10.1111/pbaf.12301?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Zachary Mohr & JoEllen V. Pope & Martha E. Kropf & Mary Jo Shepherd, 2019. "Strategic Spending: Does Politics Influence Election Administration Expenditure?," American Journal of Political Science, John Wiley & Sons, vol. 63(2), pages 427-438, April.
    2. Min Su & W. Bartley Hildreth, 2018. "Does Financial Slack Reduce Municipal Short†Term Borrowing?," Public Budgeting & Finance, Wiley Blackwell, vol. 38(1), pages 95-113, March.
    3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    4. Rebecca Hendrick & Jared Crawford, 2014. "Municipal Fiscal Policy Space and Fiscal Structure: Tools for Managing Spending Volatility," Public Budgeting & Finance, Wiley Blackwell, vol. 34(3), pages 24-50, September.
    5. Mr. Ian Lienert, 2009. "Modernizing Cash Management," IMF Technical Notes and Manuals 2009/003, International Monetary Fund.
    6. William Duncombe & Yilin Hou, 2014. "The Savings Behavior of Special Purpose Governments: A Panel Study of New York School Districts," Public Budgeting & Finance, Wiley Blackwell, vol. 34(3), pages 1-23, September.
    7. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    8. Yonghong Wu & Yu Shi, 2018. "How does intergovernmental fiscal environment affect general fund balances of major American cities?," Local Government Studies, Taylor & Francis Journals, vol. 44(6), pages 745-765, November.
    9. Ian Lienert, 2009. "Modernizing Cash Management," IMF Technical Notes and Manuals 09/03, International Monetary Fund.
    10. Kenneth J. Meier & Laurence J. O'Toole, 2002. "Public management and organizational performance: The effect of managerial quality," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(4), pages 629-643.
    11. Hai (David) Guo & Wen Wang, 2017. "A Spatial Analysis of Florida County Governments' Unreserved General Fund Balances," Public Budgeting & Finance, Wiley Blackwell, vol. 37(3), pages 71-88, September.
    12. Shu Wang & Eric Scorsone, 2020. "Economic resilience after the Great Recession: an examination of unreserved fund balance in Michigan counties," Local Government Studies, Taylor & Francis Journals, vol. 46(5), pages 716-733, September.
    13. Abhisekh Ghosh Moulick & Lori L. Taylor, 2017. "Fiscal slack, budget shocks, and performance in public organizations: evidence from public schools," Public Management Review, Taylor & Francis Journals, vol. 19(7), pages 990-1005, August.
    14. Theodore Arapis & Vincent Reitano & Earl Bruck, 2017. "The Fiscal Savings Behavior of Pennsylvania School Districts Through the Great Recession," Public Budgeting & Finance, Wiley Blackwell, vol. 37(3), pages 47-70, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michelle L. Lofton, 2022. "The impact of excess taxing capacity on short‐term resources," Public Budgeting & Finance, Wiley Blackwell, vol. 42(1), pages 3-27, March.
    2. Michelle L. Lofton & Sharon N. Kioko, 2021. "The use of short‐term debt by general‐purpose governments," Public Budgeting & Finance, Wiley Blackwell, vol. 41(4), pages 71-93, December.
    3. Kawika Pierson & Jon C. Thompson & Fred Thompson, 2022. "Accounting for the State Fixed Effect for Municipal Cash Reserves: The Role of Financial and Institutional Variables," Public Finance Review, , vol. 50(2), pages 169-205, March.
    4. Jensen, Kimberly L., 1995. "Fluid Milk Purchase Patterns In The South: Effects Of Use Of Nutrition Information And Household Characteristics," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(2), pages 1-14, December.
    5. Mullahy, John, 1998. "Much ado about two: reconsidering retransformation and the two-part model in health econometrics," Journal of Health Economics, Elsevier, vol. 17(3), pages 247-281, June.
    6. Ernest M. Zampelli & Steven T. Yen, 2017. "The Impact Of Tax Price Changes On Charitable Contributions To The Needy," Contemporary Economic Policy, Western Economic Association International, vol. 35(1), pages 113-124, January.
    7. Elmas Yaldiz Hanedar & Eleonora Broccardo & Flavio Bazzana, 2012. "Collateral Requirements of SMEs:The Evidence from Less–Developed Countries," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0034, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    8. Carson, Richard T. & Louviere, Jordan J., 2014. "Statistical properties of consideration sets," Journal of choice modelling, Elsevier, vol. 13(C), pages 37-48.
    9. Escanciano, Juan Carlos & Jacho-Chávez, David T. & Lewbel, Arthur, 2014. "Uniform convergence of weighted sums of non and semiparametric residuals for estimation and testing," Journal of Econometrics, Elsevier, vol. 178(P3), pages 426-443.
    10. Salmon, Claire & Tanguy, Jeremy, 2016. "Rural Electrification and Household Labor Supply: Evidence from Nigeria," World Development, Elsevier, vol. 82(C), pages 48-68.
    11. Oliver Schulte & Trung Thanh Nguyen & Ulrike Grote, 2022. "The Effect of Renting in Cropland on Livelihood Choices and Agricultural Commercialization: A Case Study from Rural Vietnam," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(6), pages 2878-2898, December.
    12. Seebens, Holger, 2009. "Child Welfare and Old-Age Security in Female Headed Households in Tanzania," IZA Discussion Papers 3929, Institute of Labor Economics (IZA).
    13. Hirokatsu Asano, 2010. "Estimating irreversible investment with financial constraints: an application of switching regression models," Applied Economics, Taylor & Francis Journals, vol. 42(2), pages 211-222.
    14. Peter Howley & Emma Dillon & Thia Hennessy, 2014. "It’s not all about the money: understanding farmers’ labor allocation choices," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 31(2), pages 261-271, June.
    15. Martijn van Hasselt, 2005. "Bayesian Sampling Algorithms for the Sample Selection and Two-Part Models," Computing in Economics and Finance 2005 241, Society for Computational Economics.
    16. Wongnaa, Camillus Abawiera & Kyei, Afrane Baffour & Apike, Isaac Akurugu & Awunyo-Vitor, Dadson & Dziwornu, Raymond K., 2021. "Perception and Adoption of Artificial Pollination Technology in Cocoa Production: Evidence from Ghana," 2021 Conference, August 17-31, 2021, Virtual 314939, International Association of Agricultural Economists.
    17. Glenn P. Jenkins & Hope Amala Anyabolu & Pejman Bahramian, 2019. "Family decision-making for educational expenditure: new evidence from survey data for Nigeria," Applied Economics, Taylor & Francis Journals, vol. 51(52), pages 5663-5673, November.
    18. Sergio Jimenez & José M. Labeaga, 1994. "Is it possible to reduce tobacco consumption via alcohol taxation?," Health Economics, John Wiley & Sons, Ltd., vol. 3(4), pages 231-241, July.
    19. Beltran, Jesusa C. & Pannell, David J. & Doole, Graeme J. & White, Benedict, 2011. "Factors that affect the use of herbicides in Philippine rice farming systems," Working Papers 108769, University of Western Australia, School of Agricultural and Resource Economics.
    20. Thordur Jonasson & Mr. Michael G. Papaioannou, 2018. "A Primer on Managing Sovereign Debt-Portfolio Risks," IMF Working Papers 2018/074, International Monetary Fund.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:pbudge:v:42:y:2022:i:2:p:171-195. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0275-1100 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.