Question

What do you learn about your CAFR entity from the Government Wide Financial Statements? Use the name of the finanical statement as a heading and list each financial statement as presented in the index to the CAFR.

Use the notes to the financial statements and the RSI to assist in your postings as you 'tell the story' of your government entity.

Answer 1

As an investor in local government debt instruments, one should know the term ‘CAFR’ and its importance in maintaining financial transparency for local governments for financial markets and their investors. Comprehensive Annual Financial Report (CAFR) is a set of financial reports produced by local governments, states and other entities to comply with the reporting rules set by Government Accounting Standards Board (GASB). GASB also serves as the oversight to ensure compliance and communicate any new updates or changes to reporting methods. In addition, an independent auditor audits the CAFR prepared by local governments.

Following are the basic financial statements that are required to be prepared under CAFR:

• Statement of Net Position

• Statement of Activities

• Fund Financial Statements

• Balance Sheet

• Reconciliation of the balance sheet

• Statement of Revenues, Expenditures, and Changes in fund balances

• Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances

• Statement of Activities

• Statement of Cash Flows

• Statement of Fiduciary Net Position

• Notes to the Financial Statements

Generally RSI are places after notes to financial statements. Below are some of the examples of Required supplementary information (RSI) that must be included in CAFR:

• Management’s Discussion and Analysis

• Budgetary comparison schedules not included in Basic Financial Statements

• Certain year historical trend data for defined benefit Public Employee Retirement Systems

• Certain presentations required for public entity risk pools

• Disclosures required by governments that use the modified approach in accounting & reporting for infrastructure