Auditor of State of Ohio’s Financial Health Indicators (FHI) for Cities and Counties
A few important things to note:
- An individual critical (red) or cautionary (yellow) FHI is NOT a sign of fiscal stress. The FHIs must be evaluated collectively to determine if an entity is potentially experiencing fiscal stress.
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Based on entities that have been placed in fiscal distress (fiscal caution, fiscal watch or fiscal emergency), generally, an entity reporting using the following bases of accounting may experience fiscal stress when the following FHI results are reflected:
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Generally Accepted Accounting Principles (GAAP) Basis:
- Experience fiscal stress in two to three years when at least eight (8) critical (red) and/or cautionary (yellow) FHIs are reflected.
- Experience fiscal stress when at least six (6) critical (red) FHIs are reflected.
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Cash Basis:
- Experience fiscal stress in two to three years when at least six (6) critical (red) and/or cautionary (yellow) FHIs are reflected.
- Experience fiscal stress when at least four (4) critical (red) FHIs are reflected.
- The FHI reports are automatically generated using the financial statement data provided by the city or county. The FHI report is intended as a companion report to the entity’s annual financial statements and audit report. However, if necessary, we encourage the city or county to post an explanation and/or additional information regarding the entity’s FHI report on the entity’s website.
- The FHI reports are not intended to criticize the operating decisions made by individual entities. Local officials cannot control whether government leaders at federal or state levels make policy changes that impact their finances. Many times local leaders have made conscious decisions that may trigger an indicator as having a “critical” (red) or “cautionary” (yellow) outlook. Those decisions are purposeful and usually are not indicative of a problem.
- For additional information, refer to the FHI Frequently Asked Questions.pdf
