The City of Somerville has earned the highest form of recognition in governmental accounting and financial reporting for its comprehensive annual financial report (CAFR), which demonstrated a spirit of full disclosure and motivated people to read the report, according to awarding nonprofit Government Finance Officers Association of the United States and Canada.
The nonprofit awarded the city the Certificate of Achievement for Excellence in Financial Reporting, its highest recognition, after an impartial panel judged the City’s CAFR as meeting the high standards of the program, specifically the spirit of transparency and full disclosure that is a core value of City Hall under Mayor Joseph A. Curtatone.
The program’s high standards mandate that, among other requirements, the CAFR includes an independent auditor’s report on the City’s financial statements. Discussion and analysis in the CAFR must describe the relationship between the city’s financial statements and the data reported for governmental activities, with analysis focusing on the reasons for changes in the city’s financial statements, rather than only the amount of change. The city must also clearly distinguish expenses by function rather than object of expenditure, instead of lumping all expenses together in a line item, making it clear to readers what exactly is being spent and where, among the other 220-plus requirements included on Government Finance Officers Association’s checklist.
“I am thrilled that Somerville is recognized for its commitment to transparency, accountability and open government, a commitment demonstrated in our CAFR,” said Mayor Curtatone. “Taxpayers deserve to know exactly how their money is being managed by the city, and the CAFR does that while helping everyone from City Hall to residents assess the level of services we can provide and our ability to meet our financial obligations. We are also committed to smart cost savings and efficient delivery of services, and the CAFR helps us achieve all of that, as recognized by this independent panel of governmental finance experts.”
In January, the city compiled the CAFR, presenting a complete accounting of all government funds, investments and operating activities. The CAFR complements the annual city budget by providing more detailed demographic and statistical information, as well as annual budget comparisons to help the reader better understand the financial condition of the City. The CAFR also has the potential to improve the city’s bond rating, which would reduce the cost of interest payments for the city over time.
The 120-page city document, available at www.somervillema.gov/departments/finance, includes three sections: (1) Introduction, including a summary and transmittal letter; (2) Financial, including an independent auditor’s report, management discussion and analysis, financial statements and notes; and (3) Statistical, including additional financial, economic, and demographic information.