Key Takeaways
- Government financial statements are built to meet technical and legal standards, which can make them hard for nonfinancial readers to follow.
- Leading with a plain-language answer about financial condition, then showing the evidence, makes board conversations more productive.
- Five simple questions can anchor every discussion about financial health.
- Summaries like the MD&A and a Popular Annual Financial Report (PAFR), along with charts and dashboards, help residents and officials see the story behind the numbers.
Every year, finance officers across Ohio produce financial statements that are accurate, complete, and compliant with GASB standards. That is no small accomplishment. The challenge is that the people who rely on those statements most often aren’t trained to read them. These readers include council members, trustees, board members, and residents.
An Annual Comprehensive Financial Report (ACFR) is written to satisfy auditors, analysts, rating agencies, and oversight bodies. It is long, highly detailed, and technical by design. Accurate doesn’t always mean accessible. Closing that gap is one of the most valuable things a finance team can do for public trust.
A Quick Map of What’s Inside
It helps to know what each piece of the financial statements is meant to tell readers:
- Management’s Discussion & Analysis (MD&A): Required by GASB and meant to be readable. It explains what changed and why, including financial trends, major events, and future challenges.
- Government-wide statements: A long-term, organization-wide view that includes all assets and liabilities. The Statement of Net Position shows what the government owns, what it owes, and the difference. The Statement of Activities shows what services cost, how they’re funded, and the net cost to taxpayers.
- Fund statements: A shorter-term, detailed view organized by purpose, such as the General Fund, special revenue, capital projects, and debt service funds. They focus on spendable resources and on budget and legal compliance.
- Budget vs. actual: Compares what was planned with what happened and is a strong indicator of financial discipline.
- Notes: Accounting policies, debt and pension information, risks, and commitments.
ACFR vs. PAFR
The ACFR is the detailed, audited report. A PAFR is a simplified, reader-friendly summary that highlights key financial information for residents and taxpayers. For most boards and members of the public, less really is more. A PAFR or a separate annual report can make your financial story far easier to share.
Lead With the Answer
Board members want to know where things stand before they want to know why. Start with a short summary of overall condition. For example, it might say that finances remain stable, recurring revenues covered services, reserves provide flexibility, and long-term obligations are manageable, while cost growth and capital needs deserve continued attention. Then show the evidence.
Five Questions Every Board Should Answer
A simple scorecard keeps the conversation focused on meaning rather than line items:
- Are we financially stronger than last year?
- Did recurring revenues cover service costs?
- Are reserves adequate for uncertainty?
- Are debt and long-term obligations manageable?
- Are future risks identified and planned for?
Rating each one as “stable,” “watch,” or “action needed” gives officials a clear starting point.
Show Trends, Not Just Numbers
A single year’s net position doesn’t say much on its own. A five-year chart showing steady growth, paired with a sentence on what changed and why it matters, tells a story anyone can follow. Comparisons such as budget vs. actual and year over year also give numbers context.
Technology is also changing how people take in financial information. Many governments are creating transparency portals and data hubs with interactive spending and revenue data, public dashboards, and downloadable financial reports. Done well, these tools improve both transparency and accessibility, and they give residents a way to explore the numbers on their own.
Transparency Builds Trust
Government financial statements are growing more complex, and nonfinancial readers need different information than auditors do. Meeting your board and community where they are strengthens decision-making and public confidence.
Want help telling your financial story? Rea’s Government Services team works with Ohio communities on financial reporting, PAFRs, and board communication. Connect with an advisor
About the Author
Danny Sklenicka, CPA, is Rea’s Government Industry Leader. He works with Ohio governments to strengthen financial reporting and communicate results clearly to the officials and residents they serve. Reach Danny at Danny.Sklenicka@reaadvisory.com or 614-553-5232.
