To those who follow Illinois’ financial situation, it is no secret that the state is beyond tardy on delivering its Comprehensive Annual Financial Report (CAFR). The standard for CAFR timeliness is 180 days after the end of the fiscal year. Illinois’ fiscal year ended almost one year ago on June 30th, 2018.
There are a couple of key reasons why a state would want to release its CAFR in a timely manner, including transparency. First, the absence of a CAFR means that a meaningful balanced budget cannot be passed. Illinois was flying in the dark when it passed the recent budget and, despite their claims of balancing the budget, the budget is $4.9 billion out of balance. Second, the CAFR is audited, which means the CAFR must comply with standards set by the Governmental Accounting Standards Board (GASB). Once completed, it is looked over by independent auditors to make sure those standards are met. Without a CAFR, legislators and citizens cannot legitimately assess the state’s financial status.
Now why is it such a big issue that Illinois has not released its CAFR yet? As of Sunday, June 16th, Illinois is 170 days late on its CAFR. That is nearly 100 days later than when Illinois released its 2017 CAFR (258 days) after the fiscal year ended and only 15 days away from a full year. Illinois legislators and citizens have been in the dark for almost a full year on Illinois’ financial status.
Just to show how late Illinois has been in their timeliness, let us compare them to the timeliness of 30 companies in the Dow Jones Industrial Average. The average number of days that these companies released their CAFR after the end of Fiscal Year 2016 was 49 days. These companies not only use the information provided in their CAFRs to make business and financial decisions for the following year, but if they are publicly traded companies, they are required by law to release it within 90 days. If corporations with a large financial operation spread throughout the world can provide their CAFR in less than 50 days, states like Illinois have no excuse not to release their financial reports in a timely manner.