How to Create an Excellent Popular Financial Report.

Author:Herrmann, Keith R.
 
FREE EXCERPT

The popular financial report plays an important role in making information accessible to residents. An excellent report is honest, attractive, informative, and focused. This article contains 10 tips (plus a bonus) that can help your jurisdiction better communicate with residents. The article also describes the approach taken by the City of Durham, North Carolina, and the reception the 2018 report has received from the public.

Although the popular financial report is not a required document, it is considered a best practice, and it meets an important need: presenting the highlights of the budget and financial statements in a user-friendly format that simplifies complex data. Most local governments are required to produce a budget document and annual financial statements or reports. These documents provide important information to select audiences, which may include participants (such as residents, taxpayers, or pension plan members), legislative or oversight bodies, and credit analysts and other regulators. For those without an accounting background, these documents can be very complex, making it difficult for residents to find and interpret the data they seek. To further enhance transparency, many state and local governments also produce a popular annual financial report (PAFR), which is, ideally, logical, easy to understand, and short enough to maintain user interest.

A jurisdiction's PAFR can make it more attractive to interested parties, including new businesses and residents. If it is organized and presented well, the PAFR can become a key means of communication and help create a favorable brand for the jurisdiction. At its best, the PAFR can be more useful to residents than either the budget or comprehensive annual financial report (CAFR). GFOA established its PAFR Awards program in 1991 to encourage and assist state and local governments in extracting information from their CAFRs to produce high-quality PAFRs, which are designed to inform residents of financial and other significant activity in a simplified, easy-to-read manner. They are deliberately made short and concise. (More information about the PAFR Awards program is available on the GFOA's website at www.gfoa.org.)

10 TIPS

Many governments do not produce a PAFR, or if they do, their efforts are lackluster. That doesn't have to be the case. These 10 tips can help in producing an excellent popular financial report.

Have a Theme. The theme should be stated on the cover of the report, and it should be designed to draw readers into the report and to demand readership. Do not give your report a generic title such as "Popular Annual Financial Report." Instead, develop a well-conceived theme statement with a discernible point of view.

As an example, Exhibit 1 shows the cover of the PAFR that the City of Durham, North Carolina, produced for the fiscal year ended June 30, 2018. The theme, "Dear Durham," is woven throughout the report, which provides the following explanation: "The theme for this year is Dear Durham ... We asked residents and local organizations to add their voices...

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