By Kristin Donald, MBA, Finance Manager at Apex Park and Recreation District
While the beginning of new fiscal year has everyone looking forward, public sectors accountants stay behind wrapping up the past year. In the private sector, accountants are busy filing taxes and determining the bottom line. Public sector accountants are focused on completing the Comprehensive Annual Financial Report (also known as the CAFR). During this time, you might find an accountant complaining about not having enough time or expressing frustration towards auditors.
The readership of the CAFR dwarfs the more popular budget document. Beyond the auditors and accountants who work on the CAFR, the reading audience for the CAFR is minuscule. The length of the CAFR is much shorter than the budget document. Despite that, citizens, interest groups, and others look toward the budget document for answers to everything from the number of FTE to spending priorities.
I am writing to tell you to ignore the trendy, more flashy budget document and give the CAFR a chance. Here is my plea for you to read about the financials where you live or you can even read mine!
Beginning — Flashy Tables
The first part of the CAFR is the introduction section. The transmittal letter explains the governmental organization and frames the CAFR. You will then find organizational charts and the names of the elected officials.
The Management Discussion and Analysis (MD&A) is the “meat and potatoes” of the document. The discussion includes tables and charts explaining the information.
Middle — Reconciliation (Not For the Faint of Heart)
The middle contains the actual financials. In government, we have funds that make our financials a bit interesting and involve reconciliations. This section is not for the faint of heart. You will find notes that help explain the details and questions that you may have. Fund financials and budget schedules follow with even more detail.
End – A Surprising Plot Twist?
The final CAFR section is the statistical section. This section is, by far the most interesting, because it gives you ten years of data. Do not worry, it is not all financials. Demographic information, such as top employers, population, medium income and performance measures, is included. You will also learn about the financial state of an organization in the statistical section.
Go Ahead….Make My Day
I have audited CAFRs and I have helped developed CAFRs, but this year was my first time as the project lead on the CAFR. I closed out 2014, when starting my job, and this year I was tasked with modernizing the CAFR. It was a labor of love to show what our District has done with the citizens’ funds. I was amazed by their resourcefulness.
Often residents complain, without looking at the complete picture, about their government services and spending. Local governments are fighting inflation while trying to deliver the same services without additional revenue. The CAFR shows you where the funds went and the expenses needed to provide services.
Yes, the budget is fun with its cool predictions and flashy graphs but the CAFR is the real story. You can learn if new buildings were built and what funds, debts or grants were used. You can learn if the economy is improving by looking at whether the government entity is trending back toward where they were before the economic downtown. You might find out that your local government has a recreation center with a pool near your house just in time for summer!
Read your local government’s story for the last year, or mine (Apex Park and Recreation District CAFR) for the year ended December 31, 2014. You will make an accountant’s day and you will find out what happened during the year by the numbers! And really isn’t it all about the bottom line?