McHenry Times

The Government Finance Officers Association of the United States and Canada (GFOA) again has recognized the city of Crystal Lake for its financial stewardship.

For the 26th year in a row, Crystal Lake has been presented with the Certificate of Achievement for Excellence in Financial Reporting for its comprehensive annual financial report. The certificate is the highest form of recognition in governmental accounting and financial reporting.

The award, which is presented to the individuals, department or agency responsible for preparing the award-winning report, was presented to George Koczwara, Crystal Lake's finance director.

“(The program) has been in place since 1945 and the idea was ‘how do you encourage governments to be more transparent in financials?’” GFOA Director of Technical Services Stephen Gauthier told the McHenry Times. “... What we do in the program is the minimum requirements are generally accepted accounting principal. So the minimum requires that people follow those and get a clean opinion from their auditor. But we have three ways we go way beyond that. That is where the comprehensive comes from comprehensive financial report.”

Founded in 1906, the GFOA is a nonprofit professional association for federal, state/provincial and local finance officials. The association, which has offices in Chicago and Washington, D.C., aims to promote the professional management of governmental financial resources by developing and advancing fiscal strategies, policies and practices for the public benefit.

“The first way (is) that the governments you fund should be accountable,” Gauthier said. “The money you fund can’t just be spent. There is not a mountain of money you can just spend from government. Grant money needs to be spent for grant purposes. If you borrow money from bonds, you have to spend it for the bond contract.”

Gauthier said although generally accepted accounting principles only require financial reports to show the  major funds, it is more ideal for people to be able to find information on any fund.

“If you were doing a story, for instance, on the highway fund, you should be able to get information on that fund even if it is not a major fund,” Gauthier said. “So the first thing we require is a subsection that gives information on every individual fund."

Context is another aspect of accounting that should be provided in financial reports, Gauthier said.

“For example, if I told you we spent $6 million on police last year, after nodding your head, you’d say, ‘Is that good or bad? How would I know?’" Gauthier said. "Typically the only way you can know is by having information, for example, what have we been spending? Is this going up? Is this going down? How is this in comparison to what we are spending on other things in the government, etc.? So we have a section called the statistical section that (gives) a lot of trend data so that you can actually have some sort of context or reference point for figuring out what those numbers mean this year."

Overall, the goal of the program is to promote transparency in governmental accounting and financial reporting, and to provide individuals and departments responsible for preparing such reports with the tools they need to succeed.

“The full purpose of the program (is) we want everyone to issue these kinds of reports," Gauthier said. "And what we do in the program is when people think they’ve done that, we have a peer review that nominates them. They actually turn in the report; and we have people who review them and say, ‘Yes, this does in fact follow this requirement,’ and we recognize them with a certificate. The program tries to encourage them to issue more transparent financial reporting, not just the basic financial statements."