If your School District prepares Other Comprehensive Basis of Accounting (OCBOA) financial statements, you are not alone. Preparing financial statements on this basis is the industry 'norm' in many states. But why? A growing number of School Districts are now preparing Comprehensive Annual Financial Reports (Annual Reports) for reasons that, when critically examined, are persuasive.
This blog examines the differences between these two reports, the reasons why School Districts may opt for the lesser option and how to save time regardless of approach.
Why is a Comprehensive Annual Financial Report better than OCBOA statements for School Districts?
The Association of School Business Officials International (ASBO) cites four key reasons:
- Demonstrates that your district is committed to transparency and accountability.
- Makes district financial information more accessible to all members of the school community.
- Is viewed as a positive decision-making factor by credit rating agencies.
- Can be useful for meeting continuing disclosure requirements for bonds.
Given the above, why do so many school districts still choose to prepare OCBOA reports?
It is simple. They are easier for a lay-person to understand and easier for finance to prepare.
The Annual Report is undeniably a more complex, time consuming report (both to prepare and to understand). In many ways the extra level of complexity is the underlying reason that it is a more accurate and useful report.
Many school district finance departments are stretched to capacity with their current workload and may feel they just don't have the capacity to tackle an Annual Report. If you are like many other finance professionals who say the benefits of the Annual Report do not outweigh the extra work, there is another element to consider: Automation.
If you are using spreadsheets and word processing tools to prepare your OCBOA reporting today, converting to an Annual Report while simultaneously implementing a report automation tool will likely reduce total workload below your current levels.
Bonus tip: Implementing report automation tools with your OCBOA reporting (should you resist the urge to change) will save you a ton of time too!
It is more difficult to produce the Annual Report, but the right technology will allow you to have the best of both worlds - world class reporting without department-breaking time investment.
Get started today. Here are some great resources:
- ASBO Certificate of Excellence in Financial Reporting Resources.
- A guide for what to demand in your Annual Report automation solution. Note - these requirements will apply for automating your OCBOA reports too!