Provide an outline for the minimum content of a comprehensive annual financial r

Question

Provide an outline for the minimum content of a comprehensive annual financial report (CAFR). Provide the source reference for where (using the GASB Codification) you found this information.

Then review the most recent CAFR of a state or local government. Using that report, identify:

1. The entity’s most significant source of revenues and most significant expense

2. The entity’s most significant asset, and its most significant liability

3. Two of the individual funds used by the government (look for separate fund financial statements)

4. Who prepared the report

5. Who audited the report, and using what auditing standards

Explanation / Answer

As per the GASB, A Comprehensive Annual Financial Report (CAFR) is to be prepared according to the following guidelines

It needs to have 3 sections (and a section on Other information)

Analysis of the Michigan State CAFR for 2016 (available on the State Budget office of Michigan website)

1.The entity’s most significant source of revenues and most significant expense:

The report shows the entity’s most significant revenue comes from Operating Grants (39.6%) and Taxes (27.3%) and the most significant expense is on Government led Health Care expenses (35.3%) and Education (30.4%).                                                     (pg. 26 of the report)

2.The entity’s most significant asset, and its most significant liability

The report shows that the most significant assets of the Michigan state are capital assets in the form of Land and Infrastructure and Long-Term Debt (significantly revenue bonds and notes) form the biggest contributors to the liability                        (pg. 28 & 29 of the report)

3.Two of the individual funds used by the government (look for separate fund financial statements)

The report shows the 2 individual funds used by the government are: General Fund and School Aid Fund                                                                                  (pg. 37 of the report)

4.Who prepared the report

The report has been prepared by the team of Michael J Moody (Director, Office of Financial Management)                                                                                  (pg. 10 of the report)

5.Who audited the report, and using what auditing standard?

The Auditing standard used in the report is Government Auditing Standard (issued by the Comptroller General of the US) and the independent Auditor for the report is Doug Ringler                                                                                                              (pg. 18 of the report)

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