Issuing Financial Statements Faster: Preparing financial statements takes time, but these tips can help governments speed up the process.

• Author: Buikema, Todd
• Position: FASTER FINANCIAL STATEMENTS

GFOA has long advocated for state and local governments to prepare their financial statements in accordance with generally accepted accounting principles [GAAP]. (1) While GAAP-compliant financial statements present useful information to the reader, they do not on their own provide a comprehensive financial picture of the government. The Governmental Accounting Standards Board [GASB], the GAAP standard-setting body for governments, encourages governments to also prepare annual comprehensive financial reports [ACFR]. (2,3) [See Exhibit 1.]

The ACFRs of approximately 4,400 governments participating in GFOA's Certificate of Achievement for Excellence in Financial Reporting program [COA program] are awarded a certificate for substantially meeting the program criteria. One of the requirements is that the government must submit its ACFR to GFOA within six months of its fiscal year-end. To identify standouts for timely reporting, GFOA reviewed submission times for award-winning ACFRs for the fiscal years ended 2018 to 2020. For that timeframe, we received an average of 13 ACFRs within a period of 100 days or fewer--that's 0.3 percent. GFOA reached out to officials at three governments that did so for all three of the fiscal years--Marni Hall, director of financial reporting for the City of Columbus, Ohio; Cory Gall, associate vice president of administrative services at Carl Sandburg College in Galesburg, Illinois; and Dawn T. Donovan, town comptroller for the Town of Eastchester, New York--to find out what they are doing to produce their reports so quickly. Based on those interviews, we have compiled a list of the actions they took that may help other governments issue more timely financial statements.

It takes time to prepare a government's financial statements, and GFOA is aware of the challenges governments face in issuing their financial statements in a timely manner. Several factors contribute to the timing of when a government can issue its annual financial statements, either a GAAP-financial statements-only report or an ACFR. Many of these factors were addressed in a December 2019 GFR article titled "A Timeless Question about the Timeliness of Financial Reporting," written in response to concerns raised by the Securities and Exchange Commission and others about the timeliness of governments' financial statements [atgfoa.org/ materials/timeless-question-gfrl219]. However, these issues can usually be overcome through targeted efforts based on forethought and planning.

In this article, we will explore how governments that achieve considerably more timely publication of their ACFRs are able to do so.

Have a plan

Issuing a report in fewer than 100 days from your fiscal year-end requires planning. Numerous tasks must be completed before financial statements can be prepared and audited, and even the most experienced people forget to do something. Governments should therefore create a schedule of tasks, including when the task needs to be completed and the position/ person responsible for completing it. This schedule should not only include tasks specific to preparing the financial statements, but also for all steps necessary for year-end closing. Preparing financial statements takes time, and if numbers change, even by as little as $1 in just one account, the financial statements may also need to change--which means that the general ledger needs to be finalized.

EXHIBIT 1 | ANNUAL COMPREHENSIVE FINANCIAL REPORT OVERVIEW An annual comprehensive financial report (ACFR) provides the financial statements required by GAAP, plus the following, for a general-purpose government: * Introductory information. The ACFR offers background on the structure of the government, the environment in which it operates, and the types of services it provides. It also provides a forum for management to offer a more subjective and forwardlooking analysis of the government's financial situation than would be appropriate for the basic financial statements and required supplementary information. * Information on individual funds and discretely presented component units. The basic financial statements provide information on individual governmental and enterprise funds only for major funds, and for other fund types (internal service funds, each type of fiduciary funds) in aggregate. An ACFR provides individual fund data for nonmajor funds and other fund types, and for nonmajor discretely presented component units as well. * Schedules necessary to demonstrate compliance with finance-related legal and contractual provisions. The ACFR offers a means for management to provide any additional schedules that may be needed to demonstrate finance-related legal compliance. * Statistical data. The ACFR includes a statistical section that offers multiyear trend information, along with relevant economic and demographic information. (GASB Cod. Sec. 2200.101.) * Optional sections. Governments also have the option to include additional sections in an ACFR; many include the federal funds single audit report. The schedule should be detailed. Tasks can range from specific yearend journal entries that need to be completed, such as pension and other postemployment benefit [OPEB] liability adjustments, each of the notes, and the financial statements. [See Exhibit 2 for an example.]

To meet the required deadlines, all parties involved need to review the proposed deadlines to ensure that they agree. A member of the financial reporting team should maintain the schedule, which should be reviewed each day to ensure that deadlines are being met. It can be useful to use a tickler system such as calendar reminders--with sufficient advance notice--for the parties responsible for each assignment, especially regarding sections of an...