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CAFR

CAFR. Overview. Basis of CAFR Parts of the CAFR GFOA Award Programs Other Reporting Issues. GASB Recommends:

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CAFR

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  1. CAFR

  2. Overview • Basis of CAFR • Parts of the CAFR • GFOA Award Programs • Other Reporting Issues

  3. 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 Basis of the CAFR

  4. Basis of the CAFR • Recommended for GAAP – required for CAFR • Combining & individual fund statements & schedules

  5. Basis of the CAFR • 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 Section • Financial Section • Statistical Section * Citizens, Investors/Creditors, Legislative Bodies

  6. Parts of the CAFR • Introductory Section • Not GAAP • Financial Section • Statistical Section • GASB Statement No. 44 • Other Sections • If needed e.g. Compliance Section 6

  7. 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

  8. Introductory Section 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)

  9. 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

  10. Financial Section • Not required by GAAP • Combining & individual fund financial statements • Primary government & component units

  11. Financial Section • 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

  12. Financial Section • Fund level financial statements • Focus on major & non-major funds in aggregate • Measurement & basis of accounting based on fund type • Governmental – financial resources & modified accrual • Fiscal accountability • Proprietary – economic resources & full accrual • Operational accountability • Fiduciary – economic resources & full accrual

  13. Statistical Section • 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

  14. Statistical Section • 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

  15. Statistical Section • 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?

  16. 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

  17. GFOA Award Programs • 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

  18. GFOA Awards Programs • 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

  19. 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

  20. 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

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