COA Program: Timely Financial Reporting

To be truly excellent, financial reporting must be timely. GFOA's Certificate of Achievement for Excellence in Financial Reporting (COA) award program’s policy is that annual comprehensive financial reports (ACFRs) must be submitted no later than six months after the last day of the reporting period covered by the ACFR.

The pandemic fundamentally changed how and where preparers and auditors work and new pandemic-related funding brought additional reporting requirements, adding to the increasing complexity of financial reporting. Staff vacancies, great difficulty in hiring qualified staff to replace retirees and implementation of new generally accepted accounting principles (GAAP) added to the challenging conditions governments and their auditors faced. Recognizing that it may take time for governments to bounce back in such an environment, GFOA temporarily relaxed limitations on extensions for submission of ACFRs to the Certificate of Achievement for Excellence in Financial Reporting award program.

However, as previously communicated, the COA’s Special Review Executive Committee (SREC) implemented a new extension policy effective for ACFRs with fiscal year end dates after December 31, 2021. Since then, the SREC has received requests each month from governments seeking longer extensions. The common reasons given, such as staff turnover, new GAAP, and an inability to obtain timely, needed data, were likely induced or exacerbated by the pandemic in previous years, but with an intentional plan, should now be more manageable. The fact is that the environment in which governments operate is rapidly changing, and governments need to build and maintain adequate capacity to deal with change.

The SREC has asked program staff to clearly communicate that not meeting the submission deadline may prevent a government from applying for the COA. While staff will continue to review extension requests and the SREC will review appeals on a case-by-case basis, extensions - especially prolonged extensions, and extensions for governments that received them in the recent past - will not be approved based on routine occurrences such as staff turnover and the implementation of new GAAP. We know many governments are justifiably proud of a record of consecutive awards and urge all governments to plan carefully to enable timely submission.