The CAFR Program's long checklists contain myriad requirements and recommendations that pave the road to excellence, illustrating that much is involved in meeting the highest standards of transparency and accountability.
GFOA established the Certificate of Achievement for Excellence in Financial Reporting Program (CAFR Program) more than 70 years ago, in 1945. The program's purpose is to help and encourage state and local governments to go beyond the minimum requirements of generally accepted accounting principles (GAAP) to prepare comprehensive annual financial reports (CAFRs) that evidence the spirit of transparency and full disclosure, and then to recognize individual governments that succeed in achieving that goal.
But what defines "excellence in financial reporting" for governments? The foundation of the CAFR Program is GFOA's best practice, GAAP Financial Reporting as the Base Line for State and Local Governments (all best practices are available at gfoa. org), which puts GFOA on record as advocating that governments prepare financial statements in accordance with GAAP and include them in CAFRs. Other best practices inform CAFR Program requirements.
All of the CAFR Program requirements are contained in checklists. While designed to be used by preparer governments and the cadre of volunteer CAFR reviewers who serve as judges, checklists are available freely to all on GFOA's website. The most widely applicable is a checklist for general purpose governments (https://www.gfoa.org/sites/default/files/GFOAGeneralPurposeChecklist.pdf). GFOA recently updated the checklist and believes the approach taken will make the checklist a less daunting resource for governments going forward.
Previously, the review checklist was what might be termed a "laundry list," as it included lengthy explanations and exhaustive lists of all GAAP requirements, potentially burying readers under a mountain of inapplicable requirements. Instead, we think the checklist can be an invaluable tool if it helps users determine that their circumstances necessitate disclosures and point directly to the detailed disclosure requirements, without replicating all of the extensive detail. Based on a blueprint provided by Stephen Gauthier, the previous director of GFOA's Technical Services Center, the new checklist has been significantly streamlined and reorganized. (1)
The revised checklist contains robust explanations of new, complex standards such as those on pensions and other...