Adequate, accurate and timely financial information on local governments' operations benefits both investors and local governments. A uniform financial reporting format, which suites both local/ central governments' and investors' requirements, should be a top priority for national regulators, as a precondition for improved financial management performance. Local governments' annual reports should include at least an administrative report, a balance-sheet and income statement as well as a cash-flow analysis (if accounting system is accrual based). Public disclosure of financial reports should be mandatory. Independent audits should be conducted on a regularly basis. Local governments could also improve their financial management performance by applying for an external credit rating. By obtaining the credit rating, the local government will better understand what the main determinants of its creditworthiness are and can decide what changes are needed to improve its credit risk profile and thereby reduce its borrowing costs.