* Right of Center Square…
Illinois is the only state in America that has yet to release its official report from fiscal year 2018 and state officials don’t yet know when it will be released.
Every state, most cities, and other forms of government must have a comprehensive annual financial report, or CAFR, done as a way for not only citizens to better understand their local government finances, but also to give officials a better idea on the baseline costs for upcoming budgets.
Illinois is often one of the last states to finish its report and this year, state officials have yet to do it, making it the latest since 2011 when Comptroller-turned Deputy Gov. Dan Hynes released it on June 30, 2012, a full year after the fiscal year ended. […]
A 2011 report from the Governmental Accounting Standards Board, which dictates best practices for many functions in public governance, found the average amount of time it took for a state to release a CAFR was less than 7 months.
In surveys, GASB found that the information released via these reports “diminishes quickly” in value after six months. Bondholders often use the information found in CAFRs to gauge the creditworthiness of a unit of government before bidding on an offering, which Illinois plans to do soon.
According to the Auditor General’s office, the latest a CAFR was ever released was August 24, 2006, for the previous fiscal year that ended June 30, 2005. The CAFR for fiscal years 2008, 2009 and 2010 were all issued in July of the following years. So, as mentioned above, this isn’t new.
* Comptroller Mendoza…
State Comptroller Susana A. Mendoza Wednesday declared her continued displeasure with the pace of release of the State’s Comprehensive Annual Financial Report (CAFR). Monday marks the beginning of a new fiscal year, and we are still without the fiscal year 2018 CAFR.
The Illinois Office of Comptroller compiles the CAFR from reports submitted to the Office from individual state agencies that are required to be audited by the Illinois Auditor General. If any of those audits are not complete, the Comptroller cannot publish the CAFR.
The timeliness of the issuance of the CAFR has been an issue that spans back since fiscal year 1999, marking the last time the report met its reporting date. In six of the last 12 years, the CAFR has come out in June or later, a year after the end of the fiscal year. In 2009, it came out in July. The state appears on-track to match or beat that dubious record this year.
The lateness this year does not fall on the Comptroller’s Office, the Auditor General or the current leadership of the state agencies. It appears there are issues from this audit period dating from the previous administration’s management. The current administration and leadership of those agencies are working to resolve them and account for them in their reports to the Auditor General.
The Comptroller’s Office stands ready, as it has been since December, to publish the CAFR as soon as the remaining audits are completed.
“My first year in office, we got the CAFR out in February. Last year, the CAFR was issued in early March,” Mendoza said. “I am highly concerned and disappointed that this process is taking so long. My hands are tied until we get the final audited reports from the Auditor General.” [Emphasis added.]
CAFRs are hugely important, but Illinois, as usual, is so backwards that we lag behind the rest of the country. We are the only state that doesn’t have a single financial reporting system. And despite hundreds of millions of dollars spent on new systems, way too many agency systems are one-offs that can’t communicate with anyone else.
The auditor general has to put together an audited financial report by going through each individual agency, and if some big agencies are found not to be in compliance, that can really mess things up.
Auditor General Frank Mautino told me today that these problems are especially acute “when you have dysfunctional government, dysfunctional agencies.” He couldn’t be more specific because the audit process is confidential.