Public finance is the bedrock upon which municipal governments are built. Few areas of the public sector provide a clearer picture of what a city values than where its revenue is collected and then allocated. Kentucky cities provide a snapshot of their various annual revenues and outgoing expenditures in the Uniform Financial Information Report (UFIR). The UFIR is an annual fiscal report that provides detailed information regarding municipal revenues collected (i.e., taxes, fees, and fines) and the cost to operate a city government (i.e., personnel, operations, and capital).  

However, a city’s UFIR is more than text boxes that provide a fiscal year’s local property revenue and short-term borrowing costs. When examined as a whole, a UFIR presents a lens into Kentucky’s local government finances through the data and information it provides. UFIRs are also used as documentation to advocate for policies that will ensure Kentucky cities are provided with the essential resources to thrive. Thus, it is imperative that local leaders certify that the information provided within this singular financial report is both accurate and timely because of the monumental role the data serves in promoting what is best for Kentucky cities.  

Uniform Financial Information Report (UFIR): What is this report?  

Kentucky cities are required to submit an annual financial report under Kentucky statute. The Kentucky Department of Local Government (DLG), in conjunction with the US Census Bureau, created the uniform form to provide a singular document that provides local governmental revenues and expenditures. KRS 65.905 provides that a city UFIR must be completed by May 1stand must be submitted to DLG. The statute specifies that an auditor may provide the information captured within the annual report; if an auditor is unavailable, a designated elected or non-elected official may collect the records to be submitted to DLG. 

KRS 65.910 lists the required contents for UFIRs. It is imperative that city governments provide all requested information in the report and work with the DLG to resolve any questions about where specific data should be reported. This will ensure data accuracy and permit comparisons when analyzing the information. For example, cities that report revenues for any of the occupational licensure fees they collect (payroll, net profits, or gross receipts) will need to provide the corresponding rate levied to collect that revenue during the fiscal year.  

Lastly, KRS 65.920 provides penalties for noncompliance in submitting the UFIR to DLG. The statute specifies that failure to submit the annual report shall result in a suspension of state funds, particularly from the Municipal Road Aid (MRA), until the financial report is submitted to DLG.  

Uniform Financial Information Report (UFIR)’s Significance: A Critical Understanding of Municipal Finances 

The city UFIR plays a critical role in KLC’s efforts to assist Kentucky’s 408 cities. The financial report provides vital information, and its data provides a closer view of how the Commonwealth’s financial policies impact cities. For example, an examination of FY 2024 UFIR data shows that nearly 61% of total municipal tax revenues are collected through the occupational licensure fee. Of that, the average amount collected for cities with a population of less than 3,000 was approximately $185,000. The information also allows for data analysis of changes over a specified timeframe. For example, between 2019 and 2024, the growth of total municipal revenues was 1.5%. The table below provides a breakdown of the three greatest total municipal tax revenues in millions of dollars between FY 2019 and FY 2024.    

The information contained within a UFIR provides incredible value. It is imperative that cities submit their annual financial report by May 1 to avoid state dollars from being withheld. As much detailed information as possible should be included. Cities should work with their auditor or designated official to provide all the information requested within the report.  

For more information regarding the UFIR or its data, please contact KLC Research Economist Scott Tremoulis. A link to the UFIR template can be found here.