Whether your institution encloses a brief cover letter to its audited financial statements or publishes a lengthy year-end narrative, this writing exercise can help shape priorities and inform stakeholders. This issue of In the Know offers some ideas to help you reconsider the financial information you communicate this year.

Sincerely,

Tracy Filosa

In a recent yoga class I drew inspiration for writing about fiscal year results. After my favorite yoga instructor thanked us for showing up, she asked us to do more than show up. She asked us to focus on our intentions for the class. Ironically, her suggestion shifted my attention to the benefits that focus can bring to the annual supplement to the financial statements.

Annual financial reporting is something that must be done each year; like any routine, it can get repetitive. Going through the motions of filling in the numbers and updating the old graphs each year misses out on the opportunities that this annual outreach offers. Here are a few stretches that may help you do more than show up.

Accessibility
Those who are number-phobic or new to higher education often miss out on the financial status of their college or university because the information presented is cryptic or intimidating. The annual report is an effective way to introduce higher education financial information to a diverse readership. Brief explanations, graphic displays and demonstrative ratios are just some tools that can be used to summarize results for the initiated, as well as the uninitiated.

For example, before you launch into an analysis of balance sheet performance, remember that your institution's financial statement is unique to nonprofit organizations and may be unfamiliar to even a seasoned corporate executive. Providing a brief explanation of the concept of net assets and the classifications of restrictions can get a diverse readership to understand the relevance of these results. Financial understanding often promotes interest and investment in the institution; it affords the reader a clear understanding of accomplishments, needs and how resources are managed.

Connections
The annual financial report is a valuable tool to connect stakeholders to the happenings and goals on campus. Finance professionals are positioned to deliver a cohesive message for the institution, because the outcomes of programmatic, research, service and facility efforts are captured in the institutional financial statements.

The annual report is an opportunity to explain how fiscal results relate to the issues that matter to campus stakeholders, such as the condition of campus facilities, tuition pricing, financial aid, faculty compensation, student services and research activity. It is also an opportunity to show how different initiatives that transpire throughout the year in operations, research, capital activities and strategic planning impact each other and are collectively managed. These explanations can help stakeholders understand the give and take of campus management and the ripple effects of successes and setbacks.

Emphasis
Like financial statements, the annual report is a summary. It must be concise and convey key information, not ALL financial information. One way to keep the report relevant is to emphasize particular facets of finances, for example: capital plans for renewal and new constructions; research initiatives; or operational investment in faculty compensation. The topics you select should demonstrate the financial implications of institutional priorities and compare actual performance to original goals. Financial ratios often provide direct and concise explanations of the significance of the results and performance trends, and enable comparisons with peer institutions to put this information in perspective.

Look ahead
By definition annual reports look back on a year that has ended, but those results are the starting point for the many years to come. Discuss the financial results in the context of what is next for the institution. The compelling annual report will acknowledge goals that have been achieved and those that lie ahead.

Lastly, enjoy the exercise. Like a good yoga class, what you learn during the stretch is as valuable as the end result.

Does your institution accept credit cards? Are measures in place to safeguard the personal cardholder information of your students, alumni, donors and customers? Are merchant departments complying with the Payment Card Industry Data Security Standard (PCI DSS)? Do they even know it exists?

TAF has been working with a university to develop a work plan for compliance certification, policies and procedures for accepting credit card payments, a merchant department handbook and an outreach program.

Follow this link to an article by Walt Conway and Dennis Reedy in the March 2007 edition of AFP Exchange, to learn more about the responsibilities of accepting credit cards and why banks view campuses as high risk customers.

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TAF CONSULTING
TAF Consulting is a flexible, responsive consultancy that provides planning, documentation and training services to colleges, universities and other nonprofit organizations. TAF offers cost-effective solutions, so clients can access and develop industry-specific skills and expertise for their organizations.

Contact TAF or visit our website to learn more about our work and to read previous editions of In the Know.