Eight of every 10 financial managers polled in a survey of state government chief financial officers and their peers say recent and future budget cuts will produce new kinds of risks.

The Association of Government Accountants issued the report in conjunction with consulting firm Grant Thornton LLP of Chicago. It was a talking point at this week’s National Association of State Auditors, Comptrollers and Treasurers annual conference in Burlington, Vt.

“Any time you have budget cuts at any level — and most states are making cuts — you’re putting risk into your operation. When you cut the budget, risk levels rise,” Robert Childree, a director with Grant Thornton and Alabama’s state comptroller for 22 years, said in a phone interview after speaking at the conference.

“Risk management and internal control are becoming even more important than in the past because of shrinking budgets,” he said.

Among other concerns, survey respondents cited the need to preserve a triple-A bond rating to save borrowing costs. The survey polled 40 state and territorial financial executives and 393 managers, and some Canadian financial officials. It focused on risk management, budget cuts, managing state debt, and retirement and health care for public employees.

The report urged effective pension plan management, but added: “Despite alarmist headlines, public pension plans are not causing a crisis right now.”

Pensions have drawn national attention in the bankruptcy filing of Central Falls, R.I., which faces an $80 million pension liability. On Wednesday, Fitch Ratings cited New Jersey’s pension obligations, among other factors, in lowering the Garden State’s general obligation bond rating to AA-minus from AA.

Standard & Poor’s and Moody’s Investors Service had downgraded the state’s credit earlier this year, Standard & Poor’s to AA-minus and Moody’s to Aa3.

“You have to look at these things and realize that pension plans are long term. New York State’s pension plan, for example, has been in existence for 90 years and will continue for another 90 years,” Childree said. “You could take a quick snapshot and say what you want to say, but if you look at the long-term spreads, most pension plans are well-run.”

One respondent expressed frustration with a decentralized debt issuance system, saying: “Each issuing state agency has to learn the entire process from scratch and is at the mercy of the private sector debt-issuance professionals, such as bond lawyers, disclosure counsel, financial analysts [and] underwriters.”

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