CAFR

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Overview Basis of CAFR

Parts of the CAFR

GFOA Award Programs

Other Reporting Issues

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Basis of the CAFR GASB Recommends:

Every governmental entity should prepare and publish, as a matter of public record, a Comprehensive Annual Financial Report (CAFR) that encompasses all funds and account groups of the primary government (including its blended component units).

NATIONAL COUNCIL ON GOVERNMENTAL ACCOUNTING (NCGA)STATEMENT #1

GOVERNMENTAL ACCOUNTING & FINANCIAL REPORTING PRINCIPLES

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Recommended for GAAP – required for CAFR

Combining & individual fund statements & schedules

Basis of the CAFR

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CAFR designed to serve needs of primary users* of external financial reports identified in GASB Concepts Statement No. 1, “Objectives of Financial Reporting”

Required sections are:Introductory SectionFinancial SectionStatistical Section

* Citizens, Investors/Creditors, Legislative Bodies

Basis of the CAFR

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Parts of the CAFR Introductory Section

Not GAAP

Financial Section

Statistical Section GASB Statement No. 44

Other Sections If needed e.g. Compliance Section

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Introductory Section Cover, Title Page & Table of Contents* Certificate of Achievement (prior year) List of principal officers Organization Chart Letter of Transmittal

*Actually precede Introductory Section

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Letter of Transmittal (four sections) Formal transmittal of the CAFR Profile of the government Information useful in assessing economic

condition Awards & acknowledgements

Method to present information not suitable for inclusion in MD&A

Signed CFO & COO (ideal) May be signed by CFO (lowest signature level

allowed)

Introductory Section

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Financial Section Auditor report (opinion) MD&A Basic Financial Statements (BFS)

Government wide Fund Notes

Required Supplementary Information (RSI) other than MD&A, including the budgetary comparison schedule

Above are required by GAAP

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Financial Section Not required by GAAP

Combining & individual fund financial statements

Primary government & component units

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Government-wide FS Report primary government’s financial

information for: Governmental activities Business-type activities

Required statements Statement of Net Assets Statement of Activities

Fiduciary activities excluded

Financial Section

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Financial Section Fund level financial statements

Focus on major & non-major funds in aggregate Measurement & basis of accounting based on

fund typeGovernmental – financial resources & modified accrual

Fiscal accountabilityProprietary – economic resources & full accrual

Operational accountabilityFiduciary – economic resources & full accrual

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Present information re: economic condition of Primary Government

GAAP* must be followed if prepared: Specific areas addressed Specific information required Specific time periods covered

Since GASB 34 implementation 10 years history is target for most items

*GASB #44 in effect now

Statistical Section

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Required : Financial trends information

Show financial condition over time Revenue capacity information

Show revenue sources Ability to generate own revenue

Debt capacity information Show debt burden Show ability to issue additional debt

Statistical Section

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Required : Demographic and economic information

Aid in understanding the environment within which the financial activities take place

e.g. principal taxpayers, population etc. Operating information

How does the government operate? What are its resources? What is the context for understanding and assessing its

economic condition?

Statistical Section

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GFOA Award Programs

Financial statement related Certificate of Achievement for Excellence in Financial

Reporting Program Popular Annual Financial Reporting Program

Specific & detailed checklists to ensure completeness

Judged by “eligible” people across the nation Reviewers never from same state as applicant Reviewers never from same firm that audited applicant

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Certificate of Achievement for Excellence in Financial Reporting Program

Established in 1945 by GFOA

Encourage & assist governments to go beyond minimum GAAP requirements Spirit of transparency & full disclosure

GFOA Award Programs

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Certificate of Achievement for Excellence in Financial Reporting Program

Reports submitted are reviewed by Selected members of GFOA professional staff GFOA Special Review Committee (SRC) Individuals with expertise in public-sector financial

reporting Includes FS preparers, independent auditors, academics, &

other finance professionals

GFOA Awards Programs

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Other Reporting Issues

Popular Reporting Developed because many accounting

professionals, politicians, & others believe current governmental financial statements are

Excessively complex AND

Not understandable except to those knowledgeable about governmental accounting

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Other Reporting Issues

Popular Reporting Some governments issue popular reports

Simplified, summary type reports Graphical presentation used to a greater extent than

traditional financial statements