Report finds best practices for MD&A

Thursday - 5/26/2011, 10:08am EDT

Wendy M. Payne, Executive Director, Federal Accounting Standards Advisory Board

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By Suzanne Kubota
Senior Internet Editor
FederalNewsRadio.com

A new report out from the Federal Accounting Standards Advisory Board is intended to be a reference for best practices in management and accounting for your agency.

Specifically, the report looks at what should be in your agency's "management's discussion and analysis" (MD&A) report sections. The MD&A is included in every agency's financial report. "It's a terrific opportunity to find out more about an agency," said Wendy M. Payne, Executive Director of the Federal Accounting Standards Advisory Board.

The MD&A, Payne told Federal News Radio, "should be directed to a wide audience - citizens, legislators, executives. It should pull together finance and non-financial performance information as well as talking about future challenges, so it is very broad."

In a perfect world, the sections should give a picture of who your agency is, what your mission is, and provide a high-level what you do. One of the biggest challenges, said Payne, is that citizens don't know which agency does what.

"Making a plain English presentation in your Management's Discussion and Analysis is the goal," said Payne.

"The agency's task is to tell the stories of what they've done, their past efforts and results, as well as their future challenges, and getting that in a concise section of an annual report is very challenging."

Management's really in the best position to explain to readers what lies ahead for agencies - what kinds of challenges they face. For example, said Payne, look at the report from the VA. "They did a terrific job of describing their population of veterans, how it's changing, and for example, the way it's changing means they need to use the internet to a greater extent and perhaps social media to reach some of the younger veterans."

The 124 page report covers a lot of ground, but Payne provided a starting point that wasn't included:

"If I were in a CFO office and tasked with writing an MD&A - this is a different take on it - but I would write it as if I were going to give it to my incoming {departmental} secretary. What would I want my secretary to know about this organization in 30 to 40 pages, what we accomplished during the past year, and what lies ahead for us."