The AGA Weblog

The Trailblazer Grant: A Valuable Tool

By: Rebekah Stephens, Planning and Performance Coordinator, Metropolitan Government of Nashville and Davidson County

The deadline is rapidly approaching for governments to submit their application for the Trailblazer Grant. In light of that fact, I would like to share with you what an incredible opportunity the Trailblazer Grant has afforded the Metropolitan Government of Nashville and Davidson County.

The Trailblazer Grant has allowed Metro to promote its performance for fiscal years FY06 and FY07 in innovative ways that would have otherwise been very difficult to accomplish. We have been able to, and will continue, to reach a broad range of citizens, from school children to college students, from Rotary Clubs to Parent-Teacher Organizations through the funds awarded through this grant.

To provide a bit of history, in January of 2007 the Metropolitan Government of Nashville and Davidson County published its first performance report in more than 30 years. The report highlighted the performance of several departments and agencies within Metro for fiscal year 2006. Earlier this year we released the FY07 version of the report and we are currently working on the FY08 report, expected to be released this summer.

However, it is our accomplishments in community outreach regarding the FY06 report as well as the efforts planned for the FY07 and FY08 report that I will focus on for the purpose of this blog. In order to meet the community outreach and feedback requirements of the Trailblazer Grant we used a two-pronged approach. We took advantage of the wide reaches of the Internet and also met face-to-face with citizens.

In addition to the approximately 200 printed copies of the FY06 performance report, we also created the Citizen’s Guide to Metro’s Performance website that houses not only the FY06 and FY07 Performance Reports, but also supplemental information regarding Metro departments’ strategic plans and budgets. You can access the Citizen’s Guide and both performance reports at www.nashville.gov/performance. Since the website was first launched in October 2007 there have been more than 14,900 unique visitors to the site.

The Citizen’s Guide served not only to inform the public about Metro Government’s performance it also provided citizens an opportunity to offer feedback about the FY06 Performance Report. It was through this feedback mechanism, as well as through numerous community meetings, that we were able to gather valuable information as to what improvements citizens would like to see in the FY07 Performance Report.

In addition to the community meetings, Metro also sponsored an art contest open to all children in grades kindergarten through fifth grade in Metro Public Schools. The theme of the art contest was “My Favorite Thing about Nashville.” Information about the contest was distributed to all of the art teachers in Nashville and we had an absolutely overwhelming response. Five hundred children from 19 schools participated by drawing a picture of and writing a sentence about their favorite thing about Nashville. You can see the top two selections from each grade featured in the FY07 Performance Report.

In addition to being featured in the report, the winners were also awarded a prize. The Trailblazer Grant was utilized and made it possible to award prizes to the top two artists in each grade and their art teachers. It was through these award presentations that we were able to spread the word about the performance reports and engage the decision-makers of tomorrow in their city’s government in a uniquely interesting and fun way.

The community outreach piece for the FY08 performance report will reach an even broader range of citizens. The Trailblazer Grant will enable us to print approximately 20,000 Citizen-Centric Reports, which we plan to use during our talks with high school civics classes, college government classes, civic groups, schools, Parent Teacher Organizations, Rotary clubs and Neighborhood Associations.

We look forward to the exciting outreach opportunities that lie ahead and would encourage governments to take advantage of the Trailblazer Grant for government reporting.

What are other ways that your government is reporting its performance to citizens?

Find additional information about the Trailblazer Grant online.

 

 

2009 AGA Government Finance Case Challenge Results

By: Jennifer I. Curtin, MPA

Jennifer I. Curtin, MPA, is AGA’s Director of Public Affairs.

AGA would like to congratulate The University of North Carolina at Pembroke as the top award recipient in AGA’s Second Government Finance Case Challenge. The Pembroke team, along with the other finalist, the University of Nebraska at Omaha, made 25-minute presentations last week at the National Leadership Conference on designing a Citizen-Centric Report for a fictitious city in North Carolina. A panel of judges chose team members Brenda Eldridge, Sean Deruntz and Jeremiah Wyler as making an outstanding presentation. They receive a free one-year membership to AGA and cash prizes.

The best undergraduate accounting/financial management/business students in the country were invited to compete in the challenge beginning in October 2008. Student teams collaboratively analyzed and constructed a four-page, Citizen-Centric Report. Members of the two highest-scoring teams received a scholarship to attend AGA's National Leadership Conference (NLC), held last Thursday and Friday in Washington, D.C.

The experience challenged students' moral reasoning, raised their awareness of the importance of government accountability and may have opened their minds to a future career in government. Since only a handful of colleges and universities in the U.S. offer governmental accounting courses that aren’t confined to just one chapter of a book, AGA wanted to find a way to reach out to students. Seventeen schools registered and submitted responses to the case this year and a dozen other schools asked if the case could be used as a teaching example.

Federal, state and local governments are facing enormous challenges. The students from the two finalist teams were able to learn about the government financial management community’s responsibilities and challenges while attending the NLC. It was also refreshing to witness the students from the two teams demonstrate their newfound knowledge about performance reporting. They learned that it is not always about the numbers. It is about communicating the meaning of the numbers to the populous.

Using AGA’s citizen-centric reporting template, the teams went outside of their accounting comfort zone to take a body of financial information and present it in a four-page template that the average taxpayer would understand. Members of both teams remarked that they learned a lot and that they have a newfound respect for the enormity of the tasks that government financial managers must perform.

The timing of the case finals was remarkable because President Obama had just signed the American Recovery and Investment Act. As a result, the students were able to see and hear from a variety of federal, state and local government leaders, who must now figure out how to monitor, distribute and report on $575 billion quickly.

AGA’s Case Challenge continues to receive positive feedback from educators and student participants. We have partnered with the honors accounting society, Beta Alpha Psi, to promote the competition, but we’re always looking for additional ways to spread the word to schools across the country. Do you have any suggestions for AGA? This challenge has the potential to make new connections between accounting students and the government financial management community. How should we move forward?

Takin’ Care of Business Or If You’ve Got the PAR, We’ve Got the Time—Participate in the CEAR Program

By: Evie Barry

Evie Barry is AGA’s director of performance reporting.

The Certificate of Excellence in Accountability Reporting (CEAR) Program is starting its 11^th year. When AGA’s CEAR Program started reviewing federal Performance and Accountability Reports (PARs) in early 1998, only six FY97 reports were submitted for review and no certificates were awarded. Last year, the CEAR Program received 24 FY07 reports and 17 agencies received the Certificate of Excellence in Accountability Reporting. Our program has proven to be a major factor in the steady improvement of the reports, thus resulting in a record number of award recipients.

Last year, the U.S. Office of Management and Budget (OMB), desiring that performance and accountability be even more meaningful and transparent to the public, initiated a Pilot Program. The Pilot Program allowed agencies to explore different formats that would allow them to tailor their financial and performance reporting to their constituencies, enhance the presentation and yet comply with all statutory requirements. The CEAR Program reviewed five “pilots” and two received the Certificate.

For the FY08 PARs, 20 of the 24 CFO Act agencies received a “clean” audit opinion and the number of material weaknesses decreased from 39 to 32. Also the U.S. Army Corps of Engineers, a Department of Defense component, received a clean audit opinion for the first time, while the Department of Transportation received not only a clean audit opinion, but had no material weaknesses. Now that’s progress!

New for FY08 reports, in addition to requiring agencies participating in the pilot to prepare a Citizens’ Report (the new name for the Highlights Report), OMB is encouraging the other CFO Act agencies to do likewise. The Citizens’ Report is limited to 25 pages and should identify the relationship with the PAR. In addition, the Citizens’ Report should also include a two-page “snapshot” that would provide key takeaway points on the agency’s mission and organization; budget overview; cost of operations; performance on high-priority outcomes; future challenges; and financial results. Sound familiar? Yes, those components are very similar to what AGA recommends be included in a Citizen-Centric Report.

As I was reading Ken Bresnahan’s blog on Monday, it occurred to me that the federal government is recognizing that being transparent is fundamental to trust in government. If reporting is integral to building trust, then providing practical, understandable and useful information to accurately assess the government’s financial position must go beyond financial statements. Government’s activities must be identified in terms of measures with efficiency and effectiveness information included. 

So why submit to the CEAR Program? Because the teams of reviewers take an objective and candid look at the PAR or Pilot Program Reports and offer recommendations to improve their quality using the AGA Guidelines, which are revised each year to reflect the statutory and regulatory requirements. These reports are the most important vehicle for explaining what agency dollars are buying and how its programs are being managed. Now, with the Citizens’ Report and snapshot, the agencies are offering easy-to-read documentation of the agency’s affairs.

As Steve Fisher, CFO of the Federal Trade Commission (an FY07 award recipient) stated, “Although we did not receive a CEAR award for our FY 2006 PAR, we used the CEAR review team comments to maximize the benefit of the evaluation. The PAR team used the comments received from the reviewers to improve the presentation of information and make the report more useful to the reader. AGA’s CEAR review is extremely valuable. The independent observations of the experienced and independent members of the review team have proven to be very beneficial.”

What are your thoughts on the program?

Why Service Efforts and Accomplishments and Citizen-Centric Reporting Are So Important

By: Eric S. Berman, CPA

Eric S. Berman, CPA, a member of AGA’s Greater Boston Chapter, is a deputy comptroller of the Commonwealth of Massachusetts. He is AGA’s representative to the Governmental Accounting Standards Advisory Council to GASB (GASAC) and a member of the Financial Management Standards Board.

I am proud to be your representative to GASAC, and I encourage you to give me your feedback.

On Friday, Nov. 7, I participated in a GASB user’s forum discussing Service Efforts and Accomplishments reporting. Using the request for response (RFR) released from GASB that AGA gave comment, I put myself in some of your shoes and gave your thoughts to the board. You may be an auditor, or a federal inspector general, or an educator but you are all part of AGA. During my testimony, I realized why AGA is unlike any other governmental entity. Accountability crosses so many aspects of governmental operations. We can give a perspective unlike any other peer organization.

On Friday, Nov. 14, 2008, I will give oral testimony on how AGA feels about GASB’s request for responses on Service Efforts and Accomplishments (SEA) reporting. By and large, we should feel good about the RFR. The RFR discusses many of the aspects of AGA’s Citizen-Centric Reporting program. The major points in the RFR are below.

The Four Essential Components of SEA reporting, including:

·      A section on the report’s purpose and scope—the knowledge of why the information is being reported and to which portion of a government the information relates. In other words, what is being reported and what is your audience?

·      A section on the government’s major goals and objectives—the basis for determining which measures to use for that explain the government’s mission and most important operations.

·      Key measures of SEA performance—these focus the key calculations that are most important to report users.

·      A discussion and analysis of the results of those measures and challenges facing those measures, including what has been achieved and what changed the level of achievement.

Qualitative Characteristics of the information in an SEA report, including:

·      Relevance—are the measures germane to the aspect being reported on?

·      Understandability—are the measures easily understood?

·      Comparability—are they comparable within the government and with peers?

·      Timeliness—are they presented at a time when they are useful?

·      Consistency—are the measures easily replicated from period to period?

·      Reliability—can the measurements be verified without bias?

Sounds familiar? Many of these aspects are hallmarks of AGA’s Citizen-Centric program.

I will report on behalf of you that overall, the Financial Management Standards Board of AGA is pleased with these guidelines. Like any other proposal, we have some questions and suggestions.

However, one thing is for certain—we spend a lot of time as auditors, educators, financial managers and reporters rationalizing the efficacy of a footnote, or an accounting treatment. Granted, these are very important to stakeholders like rating agencies, public interest advocacy groups and bondholders. I am about to commit blasphemy to some of you, but do the Joe the Plumbers of the world really care about what is in a securities lending footnote? I believe that at the very least, SEA reporting and especially Citizen-Centric reporting is the future of a good portion of financial reporting, maybe even as the primary vehicle to reach out to citizens, leaving traditional financial reporting as a secondary vehicle.

A recent AGA survey shows that the vast majority of the respondents, 89 percent, said that, as taxpayers, they are entitled to transparent financial management information, and 57 percent said that government has an obligation to provide it. They further indicated that government is failing to meet its financial management reporting needs, and that poor performance has created a problem of trust between residents and their governments. The survey showed that governments need new innovative means of communication to overcome those challenges. At the very least, Citizen-Centric is extremely effective at reporting short- and medium-term inter-period equity, thereby meeting some of that challenge. Maybe longer period equity could be reported using a subset of the current presentation.

In Massachusetts, our citizens just overwhelmingly voted down an initiative to eliminate the state’s income tax. In my view, it’s a sign that citizens realize that the necessities and initiatives of government cost money. But there’s always a back story to any action. In return for their increasingly hard-earned tax dollars over the next few years, as the AGA survey shows, citizens will demand information in a timely manner that they can easily understand. What better vehicle than SEA reporting, especially citizen-centric reporting? 

Tell me what you think about SEA reporting.

A final word—AGA should be especially proud that AGA member Lisa Parker, former finance director of Saco, Maine is now leading GASB’s SEA project. You’re doing a great job Lisa!

City of Saco, Maine’s Experience with Citizen Centric Reporting

By: Lisa Parker, CPA

Lisa Parker, CPA, a member of AGA’s Maine Chapter, is a project manager with the Governmental Accounting Standards Board (GASB). Until recently she was the finance director for the City of Saco, Maine.

The City of Saco, Maine issued its first performance report, Delivery of City Services—Fiscal Year 2004, in January of 2005. This 94-page report measured the performance of all 11 city departments and omitted only the performance of the school department, which is governed by a separately elected Board of Education. Due to the size of the report, the performance information provided was not being fully utilized by a wide range of citizens in Saco to assess governmental accountability and to enhance their ability to make economic, social and political decisions. The performance information was, however, being used by department heads in the management of their departments in order to improve internal performance, and during budget deliberations with the city council to justify their requests for additional funding to enhance existing service levels. As a result, the city recognized that an additional communication mechanism would be needed to more effectively communicate performance information to its citizens and other potential users.

To accompany the city’s second annual performance report, Delivery of City Services—Fiscal Year 2005, the city also prepared a shorter handout version of the report that included the executive summary, one measure from each of the 11 departments, and the website address where the entire report could be reviewed. These handouts were distributed locally at city hall, the public library and major grocery stores. The city simultaneously began issuing a digital monthly newsletter, which highlighted the performance measurement information of one city department each month. However, the citizen satisfaction survey results were still not reflecting higher levels of satisfaction for the effective communication of governmental accountability.

In December of 2006, with the release of the city’s third annual performance report, Delivery of City Services—Fiscal Year 2006, the City of Saco, Maine, supplemented that report by becoming the first in the country to issue a Citizen-Centric Report following AGA’s recommended model. The four-page report was published in the local newspaper and a press conference was held to alert all media sources of this important release. Mayor Mark Johnston so eloquently stated, “We know that governments have a reputation for being good at collecting taxes but not necessarily as good at being accountable for how those tax dollars are spent. Saco wants to change that. This report has both the good and the bad. And while I’m glad to say there’s more ‘good’ to report in Saco these days, this report is chock full of challenges coming down the pike. We’re hoping to inform a thoughtful debate on these issues.”

The concise, four-page document is intended to engage citizens and spark their interest to learn more about city services delivered, policies established and how well the organization is achieving its goals and objectives. Charts and graphs aid in making the information visually aesthetic and easier to understand for those who do not care for the monotony of pages filled with text. Each page of Saco’s report covers specific information and has a reference to the city’s website where the entire volume of the comprehensive annual financial report, the distinguished budget document and the annual performance report can be reviewed for more detailed information. The Citizen-Centric Report will provide for comparability from one year to the next or with similar organizations if prepared consistently with the same type of information on each page. The contents of each page within the City of Saco report are as follows:
➢ Page 1: Strategic objectives and demographics
➢ Page 2: Notable accomplishments
➢ Page 3: Revenues and expenses for city operations
➢ Page 4: Challenges moving forward/future issues

This same format was used again with the dissemination of the city’s second Citizen-Centric Report in 2007. For complete copies of the city’s four AGA award-winning performance reports (Certificates of Excellence in Service Efforts and Accomplishments Reporting) and the two released Citizen-Centric Reports, please visit the city’s website at www.sacomaine.org. The three completed citizen satisfaction surveys can also be reviewed at this website, displaying an increase in citizen satisfaction with the city’s communication efforts between the second and the third surveys. Due to the fact that the second survey was conducted prior to the release of the 2006 Citizen Centric Report and the third survey was conducted after its release, the city has concluded that the increase in satisfaction can be attributable to this effort.

What types of citizen centric communication documents do your governments currently use to disseminate financial, budget and performance information? Do they engage citizens in assessing government accountability and in making economic, social and political decisions?

TOMORROW: Mike Kristek, CGFM, recently retired from the U.S. Department of Energy, on "Are the IGs and Other Federal Auditors Doing Enough to Improve Government Accountability?"

Questions on posting comments or wish to subscribe to the feed that sends blogs right to your e-mail? Find instructions here. Want to be our guest on the Blog? Contact Marie Force, AGA communications director, at mforce@cox.net.

What About Small Governments?

By: Penelope S. Wardlow, Ph.D., CGFM

Penelope S. Wardlow, Ph.D., CGFM, is an at-large member of AGA. She is currently a consultant with FASAB and SEC. Previously she was the senior research manager for GASB following service on the faculties of the University of Maryland and George Mason University. Opinions expressed here are her own.

“Governments exist to serve their citizens. Citizens have the right to an understanding of how their government operates and if their tax dollars are being spent efficiently and effectively. And governments have a responsibility to provide that information in an easily understandable way.” (Introduction to AGA’s Citizen-Centric Reporting Program)

This excellent statement reminds us of the functions and obligations of governments and encourages all governments to do a better job of communicating with the citizens. I’d like to see it prominently posted at meetings of government officials, especially those open to the public.

The idea of providing user-friendly reports to citizens—sometimes called “popular reporting” —is not, of course, new. I recall that in 1992 GASB published a research report by Frances Carpenter and Florence Sharp about local government “reports to the citizenry.” The report contained illustrations and do’s and don’ts for governments interested in popular reporting. Some of the ideas resulted from the Government Finance Officers Association’s efforts to promote popular reports through its Popular Annual Financial Reporting Program. AGA’s initiative is a welcome addition not only because it provides useful report content and design guidelines, but because it encourages Citizen-Centric Reporting by federal agencies, as well as state and local governments. I look forward to a time when most governments at all levels will provide reports that are truly useful—and used—by the citizenry.

However, I have two concerns that I have not seen addressed either in Association publications or in articles by those encouraging Citizen-Centric Reports. Both concerns involve small governments, especially counties, cities, towns and other forms of municipalities with fewer than 30,000 citizens, and even more so those with 10,000–15,000 population or less. There must be thousands of these governments spread across the 50 states, especially in rural areas, and their populations add up to a large number.

First, how can small governments prepare Citizen-Centric Reports that will be useful and informative to their citizens? Many small governments have very few employees. Most (sometimes all) of them have little or no knowledge or experience in accounting, finance or financial management and many are part-time employees. Frequently these governments can barely function without continual advice and assistance from agencies of their state government, and from CPAs and others in the community who volunteer their time. These governments do not have the time, resources or ability to summarize financial data, collect statistics about their communities and about the inputs, outputs and outcomes of their services, and present it all in a user-friendly form to the citizens. Yet their citizens’ information needs are just as great as those of citizens of larger governments.

Secondly, what can be done to change the attitude of managers of small governments who do not wish to communicate with the citizens, much less prepare Citizen-Centric Reports? From survey results (including AGA’s) and my personal experience living in a rural county (population 13,000), managers and councilors or commissioners do not want to provide information to the citizens and they do not like questions or input from them. They have little sense of accountability to the public. They tend to hold their positions for many years and they resist change. They view questions from citizens as an intrusion. AGA’s survey respondents must have been referring to my county among other governments when they described an “expectations gap” and “a problem of trust between citizens and their governments” and when they said that ways to improve accountability include “better reporting (open disclosure, easy-to-read reports)” and “a change in attitude in communications (honesty and transparency).”

How can we encourage and help small governments to be more transparent about their activities and to provide Citizen-Centric Reports to the public?

MONDAY: Sheila A. Weinberg, CEO and Founder, Institute for Truth in Accounting

Questions on posting comments or wish to subscribe to the feed that sends blogs right to your e-mail? Find instructions here. Want to be our guest on the Blog? Contact Marie Force, AGA communications director, at mforce@cox.net.

Can Government Just Give Us the Facts?

By: Craig C. Hall, MPA

Craig C. Hall, MPA, is a member AGA’s Greater Boston Chapter, and associate faculty for the College of Business and Management for the University of Phoenix. He’s the chief financial officer for the Massachusetts Developmental Disabilities Council, the first state agency and first governmental entity in Massachusetts to complete a Citizen-Centric Report, as well as first Developmental Disabilities Council in the nation to complete the report.

Can government just give people the facts about how good a job they are doing with your tax dollars? A few governments have the magic formula—using a Citizen-Centric Reporting model.

A January 2008 Harris Interactive poll confirms, “deep dissatisfaction among the American public with both the availability of government financial information and the way it is delivered to the people.” Relmond P. Van Daniker, AGA executive director, in commissioning the poll, said the dissatisfaction with government is “at all levels” and is “failing to meet the needs of its citizens with regard to financial management reporting.” Van Danker added that, “There is a large `expectations gap,’ with the public overwhelmingly believing that government has the obligation to report and explain how it generates and spends its money, and government’s perceived failure to meet reporting expectations.”

Has anyone not been frustrated or confused with information they have received about how well their government is working and spending their tax dollars? I have, and I’m in the business of public finance. My government agency tried out the Citizen-Centric Report model and is happy with the recognition the report has received because we were the first governmental entity in Massachusetts to complete the report, and also because the initiative coincides with Governor Patrick’s key priority around civic engagement.

The Citizen-Centric Report model is now being used by government leaders across the country to communicate the facts about how government is operating in a clear, concise and complete manner using a simple four page summary, not the typical government document full of bureaucratic jargon incomprehensible to the citizen on the street.

The Citizen-Centric Report came about through a grant from the Sloan Foundation “to provide understandable information to citizens.” AGA is leading the initiative as part of its campaign to advance government accountability. The idea is that governments can use this model to “publish ‘state of the government’ reports.” What is refreshing about the Citizen-Centric Report is that it’s designed to be visually appealing, providing understandable information about the financial condition and performance of their government.

The public fumes when hearing about government spending on frivolous pork-barrel projects. At the same time taxpayers hear local and state officials lament over budget concerns and the need to cut back on programs and services. What are taxpayers to believe? The obstacles and barriers to meeting citizen needs can be surmounted by modeling a report that includes the mission of the government, performance goals, where the money comes from and how it is spent. The information should be illustrated to include trends and talk about unforeseeable events that the government may have to deal with, affecting budgets and operations.

The timing of the implementation of the Citizen-Centric Report is good, too. A report by the Pew Research Center for the People and the Press in March 2007 investigating trends and core attitudes of voters found that barely a third of Americans believed that elected officials cared about what they thought. As governments at all levels begin using the Citizen-Centric Report, citizens and government officials can begin to discuss and understand one another’s priorities and find common ground.

The League of Women Voters, a public interest group interested in civic engagement, good government, transparency and accountability is supportive of the initiative and believes the Citizen-Centric Report can connect citizens and government. Citizens and taxpayers, once their government adopts the Citizen-Centric Report, can finally have easy to understand information on how their government is performing and make informed judgments on the use of their tax dollars.

Governments today are simply not communicating and engaging citizens in the operation of government. Government leaders should investigate the Citizen-Centric Report and resources offered by AGA at www.agacgfm.org. Citizens should expect more from their governments and demand accountability and transparency of government performance and spending of tax dollars. “We believe that accountability and transparency are essential to a healthy democracy and should be priorities for every elected official,” said Van Daniker.

The Citizen-Centric Report is a step in the right direction. Is your government considering a Citizen-Centric Report? If you’ve already done one, how was it received? Will you do it again next year?

Editor’s Note: This article first appeared in the Weymouth News as an op-ed piece.

TOMORROW: Joe Kull, CGFM, director, PricewaterhouseCoopers LLC on transparency in government.

Questions on posting comments or wish to subscribe to the feed that sends blogs right to your e-mail? Find instructions here. Want to be our guest on the Blog? Contact Marie Force, AGA communications director, at mforce@cox.net.