FINANCIAL HEALTH INDICATORS (FHI)

FINANCIAL HEALTH INDICATORS (FHI) are a series of financial information, percentages, and ratios gathered from annual financial statements, filed by the local governments, and analyzed by the Auditor of State of Ohio, which are useful in predicting financial stability. FHI will be used to recognize early signs of fiscal stress at specific local governments and take a proactive approach to monitoring or assisting these local governments, rather than only a reactive approach after declaration of fiscal caution, watch, or emergency. Seventeen (17) FHI have been identified as useful in determining signs of fiscal stress. Sixteen (16) of the indicators are based on information derived from the entity's audited financial statements. Indicator 17 is based on the citations/recommendations results from the most current audits.

HOW TO ANALYZE FHI No individual FHI is of use in identifying overall fiscal stress. These indicators must be considered together to obtain insight as to whether or not an entity is experiencing the signs of fiscal stress. The entity should review, in detail, any individual FHI identified as having a critical or cautionary outlook to determine areas of potential concern that would require evaluation of goals/objectives in order to ensure fiscal stability is maintained.