Tips to Improve Your Annual Report
The annual report is an opportunity for municipalities to showcase their community, describing what makes it special and why people like to call it home. When reading the annual report, people want to know what has happened in their community during the past year and what is planned to occur in the future. Rather than merely stating facts and figures that are indistinguishable from those of another town, a good annual report will reflect this sense of community by including historic photographs, informative narrative reports and relevant financial information.
Reports need not be expensive to be of high quality. In terms of the format and content of annual reports, there are many varieties and options to choose from. However, when putting the report together, the most important consideration is the readers. Every annual report should be laid out, written and organized with the readers in mind.
The following are some helpful tips to consider when compiling your community’s next annual report. Many of these suggestions may be incorporated with little or no additional cost, and will hopefully place your annual report at the top of the must-read non-fiction list in your community!
The basic financial information that should be included in the annual report are the balance sheet, the current and proposed budgets, the warrant, the auditor’s report, and financial reports from the treasurer, tax collector, trustees of trust funds, town clerk and library trustees. Additionally, it is recommended that the following financial information also be included: a summary of receipts and expenditures; a comparison of the prior year’s budget to actual expenditures; minutes from the prior year annual meeting; a schedule of town property; a summary of the inventory valuation and tax rate computation; and finally, a statement of outstanding debt.
Every annual report should include a report from the auditors, either from the independent Certified Public Accounting (CPA) firm that conducted the audit or from the locally elected auditors. Per RSA 21-J:21 the annual report must include a summary of the auditor’s findings and recommendations, which addresses issues such as internal control weaknesses. Often, the entire report of the audited financial statements, along with the accompanying notes, is included in the annual report, providing a complete and comprehensive presentation of the municipality’s financial position. Towns that have contracted with an independent CPA firm to perform a compilation rather than an audit should not include the compilation under the heading Auditor’s Report since no audit was performed. To report a compilation as an audit is misleading to the readers.
Reports submitted by treasurers, library trustees and trustees of trust funds should identify the accounts and financial institution(s) where municipal funds are held, along with the dollar amounts on deposit or invested as of year-end. This informs readers of the financial institutions that the town currently conducts business with as well as the balances at year-end.
Graphs and Charts
A picture is worth a thousand words, or in this case, worth a thousand numbers. Graphs and charts easily convey to readers what the numbers attempt to tell them. For example, rather than just showing how the tax rate of $23.49 was computed, consider adding a graph or chart to illustrate the change in the tax rate over the past five years. Such a graph or chart would show the recent trend of the tax rates, giving the reader a better perspective of the current $23.49 rate. The same would be true for the town’s total valuation—seeing in a graph the growth in valuation from year to year is more meaningful than seeing just a single number reported. Another example would be to include pie charts with the summary of revenues and expenditures. A visual representation such as this helps readers better understand where the money came from, and where it went. When using graphs and charts, be sure to include titles and proper explanations, and to place the graphs and charts in appropriate sections of the report.
Schedule of Town Property
The schedule of town property should include both real and personal property. Land, buildings and equipment valued over a certain dollar threshold (vehicles and heavy equipment for example) should be included on this schedule.
Arrangement and Layout
The order and layout arrangement of the annual report is one of the most important factors to consider in terms of reader appeal. For example, placing all the financial information in one section and the department reports in another section creates a logical flow. Avoid placing a narrative report at the bottom of a page just because that’s where it fits. Draft a layout plan and stick with it. The graphic elements of the report should be handled with a high amount of consideration, as they create the first impression of your report.
Table of Contents
The table of contents should be one of the first pages of the report. Its purpose is to help readers easily locate specific information. The table of contents should be listed in a logical order, such as alphabetically or grouped by categories; do not however, list the table of contents in page number order. Be sure to include every report in the table of contents and to name the reports consistently. For example, if you choose the title Selectmen’s Report, then use Planning Board Report. If you choose Report of the Select Board, then use Report of the Planning Board as well.
If you prefer to list the table of contents by categories, be sure to use logical groupings, such as:
- Selectmen’s Report
- Town Manager’s Report
- Town Officials
- 2015 Warrant, etc.
- Auditor’s Report
- Balance Sheet
- Comparative Statement of Revenue and Expenditures
- Treasurer’s Report
- Tax Collector’s Report
- Town Clerk’s Report
- Trustees of Trust Funds Report, etc.
- Police Department
- Fire Department
- General Assistance
- Public Works Department, etc.
Boards, Commissions and
- Conservation Commission
- Planning Board
- Historic Commission, etc.
List of Town Offices
The list of town offices should be highly visible and should include the service, physical address, mailing address, e-mail address if applicable, phone number, and hours of operation. Prominently show the town’s website address. All this information should be placed either on the inside front cover, immediately after the table of contents, or on the back cover (either inside or out). And don’t forget to include the list of town offices in the table of contents!
Page numbers should be visible, placed in the same location on each page and consistent throughout the report. The outside corners, top or bottom, are the preferred placement for page numbers.
Typestyle should be legible, should be an appropriate point size, and should be consistent throughout the document. For instance, the Selectmen’s report and Fire Chief’s report should not look as if they came from two different printers. Recommended fonts for body text include Times New Roman or Garamond with a point-size no smaller than 10. Don’t underline items or use all capital letters—rather, distinguish between headlines, subheadings, and body text by using italics, bolding and different point sizes. But again, be consistent throughout the report!
Interior graphics create visual interest and help draw the reader’s attention. Graphics can include photographs of a historic nature, of community events or of important landmarks. Be sure to include captions and credits for all photos. Photos should be high resolution, clear images. Check with your printing contractor if you’re not sure whether the quality of the photo is conducive to printing in the report. In regard to clipart, use it sparingly and be sure the image is relevant. Never use clipart that has been copied from a website since it is not of sufficient resolution and will often appear blurry when printed in the report.
Narrative Department Reports
The narrative department reports should be written for the average citizen who may not be familiar with financial information or statistics. The most important narrative is the report from the Board of Selectmen or Council. This report should not only explain what has happened during the past year, but should also discuss the community’s immediate needs and issues, as well as plans for the future. Key points to address in the Selectmen’s report include: What were the challenges and successes this past year? What are some of the long-range issues facing the community and how will these be addressed? What are the Board’s goals for the upcoming year? This report should be submitted and signed by the entire Board of Selectmen, not just the chairman.
Other department reports should address similar issues as the Selectmen’s report. For example, do not just list the number of incidents for the year. Instead, explain to citizens how their money was spent. Did department staff receive training that improved proficiency in their jobs? If so, mention that. Was a significant piece of equipment purchased? If so, discuss how that equipment has made a difference in operations. Are there special events, hiking trails or other opportunities of which citizens should be informed? Inclusion in the annual report is a great way of communicating these items to all citizens. Finally, including pictures with captions alongside the department reports, such as a photo of a local team next to the Recreation Department report, a group photo of the Fire Department with the new fire truck, or a photo of the highway crew working on a local road, helps personalize these reports.
Every report submitted by a town official or by a board, commission, or trustees should include the name(s) and/or signature(s) of the individual(s) responsible for that report. Each such report should include the names or signatures of a majority of the members, not just the chairman.
Proofread Cover to Cover
It is imperative that the report be proofread from cover to cover before submitting for printing. Every narrative report, every caption surrounding every picture, and every chart title should be carefully reviewed, preferably by a second or third set of eyes. And be sure to recheck the accuracy of all numbers presented in the report.
Printing, Distribution and Retention
Many towns have moved away from the traditional 5.5” x 8.5” size to a larger report because of lower printing costs for the standard 8.5” x 11” paper. This allows the consistent use of a larger font size and provides sufficient room for “white-space” borders around lengthy text, both of which make narrative reports much easier to read.
When placing the annual report on the town’s website, be sure that it is easy to find, preferably on the home page or under a logical heading or tab such as “Town Documents”. While making the annual report available on the town’s website is both convenient for voters and reduces the number of reports that may need to be printed annually, RSA 41:14 (which has not been amended since 1947) requires the selectmen to “cause their report, and those of other town officers required by law to make reports, to be published in pamphlet form at the expense of the town…” This suggests that, at least for now, the town must publish its annual report in paper form to be given to voters who request a copy. Note however, there is no statutory requirement to mail the report or to otherwise deliver them, only that the report be available at least seven days before the annual meeting.
As for retention, annual reports must be retained permanently per RSA 33-A:3-a, VII. As a historical document, it is advisable to have copies in the town library and other local libraries that may want to include in their collections annual reports from surrounding communities. Additionally, towns are required under RSA 41:22 to submit two copies of each annual report to the state library.
Remember, this annual report is a summary of the town’s accomplishments and challenges in 2014, a permanent reflection of the way of life in the community this past year, and a valuable historical document for centuries to come.
Barbara Reid is the government finance advisor for the New Hampshire Municipal Association. Contact Barbara at 603.224.7447, or email@example.com.