1. How To Communicate Financial Information to Elected Officials (or anyone else that doesn’t think accounting is cool) Brad Harris, CPA, CMFO, CCW (see below) Finance and Accounting Consultant – MTAS Former Finance Director – City of Athens, TN Former Financial Director – Rhea County, TN Rhea County 2014 Chili Cookoff Winner!!

2. What’s this class all about?

3. Sometimes things are not always as they seem!!

4. What’s this class all about?

6. Too much PAPERWORK! Too DIFFICULT to understand! RESULT: no comprehension of our current financial condition

7. Key Decision Makers Need… Information that is… easy to read flows logically leads to a conclusion quickly They come away knowing they are informed Accountability

8. Two Words: Your BFFs Timeliness Accuracy

9. Timeliness is essential How often do you prepare and give management and elected officials financial reports? Are they for the previous month or quarter? If not: WHY?? How can they make important decisions without timely financial data?

10. Accuracy – no substitute! Are the numbers right?? Does it look sensible?? How can they make important decisions if the information you give them is not reliable??

11. THINGS YOU MUST DO EVERY MONTH: 1)Reconcile EVERY bank statement!!!!!!!!!!!!

12. 2)Review your trial balance Balance sheet assets / liabilities Do the assets have debit balances? Do the liabilities have credit balances? Do the fund balances/net position match the previous year audit?

13. 2) Income statement revenues / expenditures Do revenues have credit balances? Do expenditures/expenses have debit balances Does the trial balance equal -0- at the end? (In other words, do debits = credits?)

14. 3)Close the month out once you are comfortable with the account balances August should not be your “current month” when the dogwood trees start blooming!! (Uh, Houston, we have a problem!)

15. Once you are happy with the trial balance numbers, go ahead a close the month and prepare financial information for those that need it. How to you avoid “information overload”? Give them what they want AND what they need

16. A SIMPLE Spreadsheet  EASY to understand  NOT complicated  HELPS to see the financial picture

21. A SIMPLE Narrative General Fund Total revenues stand at 50.10% of budget, while total expenditures stand at 45.84%. This 4.36% difference indicates that while revenues are on pace to meet budget, expenditures may finish the fiscal year below budget. Through December we have collected $87,612 more in revenue than we have spent in expenditures. Total revenues have increased over December 2012, by $145,433, but the percentage of total revenues to budget is down slightly (2.0%). We have collected more in property tax due to the increase in rate. However, property tax as a percentage of budget is slightly lower than last year. Local sales tax is lower than last year by about $19,600. Court fines and costs have also seen a substantial increase over the prior year. Total revenues are slightly above 50%, due primarily to the property tax increase and the insurance settlement from the flood. Last year we finished the fiscal year at 102.69% of budgeted revenues – we should approximate 100% this year.

22. PLEASE NOTE: on the financial spreadsheet that accompanies this report, at the top you will see General Fund revenues. I have only broken out major sources of revenue such as property taxes and sales taxes. The “total revenues” amount includes smaller items that I did not show in detail. A complete listing of all revenue accounts can be found on your computer-generated report titled “”Statement of Actual and Estimated Revenues”. Expenditures and encumbrances for this year are $13,482 more than this time last year, showing 45.84% this year compared to 53.94% last year. The Legislative line has increased because $10,000 in contingency funds has been spent through December because of the hosting of the National League of Cities Conference. Also, City Hall Buildings line has increased because last year we paid for the municipal code update and dues and registration fees were higher. The fire department has seen a decrease due to the chief’s retirement. State street aid has decreased because a new employee was hired with the first paycheck being posted to August and no retirement posted for this year. Operating transfers has shown a large percentage decrease from the prior year because the transfers were not budgeted in December.

23. Keys to Effective Communication of Financial Results 1)Keep it SIMPLE 2)It doesn’t require detailed thought or analysis 3)EASY to read 4)Gives them a logical conclusion 5)Shows them an accurate and timely snapshot of where the city stands financially

25. Some GREAT websites http://www.mtas.tennessee.edu/web2012.nsf/ Finances http://www.mtas.tennessee.edu/web2012.nsf/ Finances http://www.comptroller.tn.gov/la/ReportsAudit s.asp http://www.gfoa.org/best-practices http://www.comptroller.tn.gov/sl/index.asp

26. If I can help you further: Brad Harrisbrad.harris@tennessee.edubrad.harris@tennessee.edu 423-718-0797