Why Are PAFR's So Popular?

Why Are PAFR’s So Popular?

Summary

The Government Finance Officers Association (GFOA) established the Popular Annual Financial Report (PAFR) Program in 1991 to encourage state and local governments to adapt information from their Comprehensive Annual Financial Reports (CAFRs) to a report that is readily accessible and easily understandable to the general public and other interested parties who do not have a background in public finance. The GFOA then recognizes individual governments that are successful in achieving that goal. Is your organization interested in participating in this program? Below are some best practices to follow if you are looking to issue a PAFR.

Eligibility Requirements for Submitting a PAFR

• An organization must first submit a CAFR.
• Submit the PAFR along with a completed application.
• The submission deadline is six months following the government’s fiscal year end.
• A one-month extension may be requested.
• The PAFR must clearly advise readers of the availability of the CAFR.
• The government must disclose if the PAFR contains information from only selected funds or if it does not include all component units.
• Financial information included in the PAFR must be derived from (Generally Accepted Accounting Principles) GAAP data in the CAFR.
• The PAFR must include some form of narrative or graphic analysis to explain areas of interest or concern.

How to Communicate Dense Information

Some suggested tools to communicate the more complex, technical financial information in a PAFR include the use of clear written language, use of charts, graphs and pictures to illustrate financial information, and the inclusion of information that is meaningful to your audience and that can lead to a better understanding of your local government.

Judging Process

Reviews of PAFR’s are conducted by volunteers and GFOA staff. The applicant will receive a list of specific comments and suggestions for improvement. The reviews are then combined and a final vote is determined. Below is an outline of the judging ranking system:

Reader Appeal (10%)

• Short enough to maintain user interest.
• Format is logical and easy to understand.
• Typography is easy to read and appealing.
• Photos, charts, graphs enhance the report’s appeal.

Understandability (25%)

• Avoids jargon and technical language.
• Makes good use of charts and graphs to help users understand financial data.
• Uses narratives to explain financial data and to highlight significant items.
• Financial data is provided in proper context and provides information on past trends.
• Minimizes the potential for misinterpreting information that is presented.

Distribution (7.5%)

• The number of reports distributed is appropriate for the target audience.
• The mode of distribution is appropriate for the target audience.

Other (7.5%)

• The report was an especially notable achievement for a government of its type and size.
• The report was especially innovative or creative in form or content.
• If I were a user of the entity’s services, this report would be useful to me.
• If I were a member of a legislative/oversight body, this report would be useful to me.
• The report makes the entity more attractive to interested parties.

The above categories make up 50% of the score. An overall 1 to 5 rating is also given, which makes up the other 50%.

How to Get Started

• Start somewhere!
• What do you want to communicate?
• What is your budget?
• Consider your resources.

Listed below are examples of PAFRs we encourage you to review for an idea of what this report entails:

• Kenai Peninsula Borough, AK
• Cuyahoga Community College, OH
• Cottonwood Heights, Utah
• Town of Frisco, Colorado
• City of New York, New York
• City of Greenville, North Carolina
• City of Portland, Oregon
• City of El Dorado, Kansas

The preceding article is an abstract from a seminar conducted by Katie L. Yates, CPA, Manager, on behalf of GFOA-PA. Please contact the presenter for additional information:

To read more about the PAFR Program click here.