Question

What are the three major sections of the CAFR?   
Discuss the information reported in each section.   
Which of these three do you think is the most important for understanding the governmental entity? Why?

Answer 1

What is CAFR? CAFR is a set of financial statements that provide readers with the different types of information they need to understand the economic picture of local government finances and how to compare the projected financial figures in the budget. The CAFR falls into three main sections as follows: Introduction, Finance section and Statistical section.

The introduction section a transmittal sample, a county organizational chart, and a list of government officials. This section mainly guides the reader through the report with a table of contents from different sections and often includes a transmittal letter from the component executive. The transfer letter is of legal importance to the CAFR, which generally has a profile of the local government and provides up-to-date information on the financial status of the local economy. By taking any major initiative taken by the local government, it has been said that financial reporting is the real responsibility of the management.

General-purpose financial statements within the finance department and combined or individual funds and account groups are analyzed by including financial statements and schedules as well as independent auditors' reports and management discussions.

The Comprehensive Section is also a financial report which includes the complete financial report, financial information report and auditor's report. An auditor's report is generally the first provision in the finance department that presents the auditor's opinion on the financial report and presentation.

The statistical section is unsubsidized, which includes selected economic and demographic information, and is generally presented on a multi-year basis. The statistical section is also important because it outlines the executive information on local trends, financial capacity, debt capacity, demographic information and other matters.