Good News from the State’s Financial Report
A column by Gov. Dennis Daugaard:
This past week the state budget office issued South Dakota’s Comprehensive Annual Financial Report, or what those of us within state government sometimes refer to as “the CAFR.” The Bureau of Finance and Management made the report public on the Friday before New Year’s Day.
Just like a business, each year South Dakota prepares audited financial statements. These statements are required by law, and are used to qualify us to receive federal funds. The report is also reviewed by agencies which evaluate our state’s credit worthiness.
The annual report includes our state government’s complete financial statements. Also contained in the report is information about the state’s economic conditions and outlook, the profile of the government, major initiatives, and a financial analysis of the state’s funds. The report is then submitted to the Department of Legislative Audit for review.
The report for Fiscal Year 2016 shows that the state is in a strong financial position. For the 30th consecutive year, Legislative Audit issued an unqualified “clean” audit opinion, meaning the CAFR is materially accurate.
This marks the earliest CAFR release in 20 years. When I first came into office, we were finishing this report in June – almost a full year after the close of a fiscal year. The hardworking staff at Finance and Management made it their goal to do better, and each year since then, they’ve been issuing the CAFR more quickly. They’ve now cut the timing in half. By moving the date up six months, this marks the earliest CAFR release in 20 years.
It’s important to complete this report promptly. The report helps inform budgetary decisions and is one way our state is meeting rating agencies’ expectations. It is also a tool for the citizens who must hold state government accountable for its management of taxpayer dollars.
Improving our state’s financial practices is one of my highest priorities, and I am proud of the progress we have made in the last six years. South Dakota has obtained AAA ratings from all three major rating agencies. We have built and maintained a rainy-day fund that is ten percent of our general fund budget. We have been conservative in estimating revenues and expenses. When we have one-time money to spend, we have used it to repay debt early, secure an existing asset, endow an ongoing expense or create a new asset.
South Dakotans must responsibly manage their money in order to stay in business and take care of their families. They expect their government to do the same. Our just-issued CAFR validates that South Dakota’s state finances are in solid condition.