Audits of State and Local Governments

Chapter 5 GOVERNMENT-WIDE FINANCIAL STATEMENTS AND THE CAFR

LEARNING OBJECTIVES

After completing this chapter, you should be able to do the following:

• Recognize the format and requirements of the government-wide statements.
• Identify steps in the process required to produce the government-wide statements.
• Identify what must be included in a Comprehensive Annual Financial Report (CAFR).

The Government-Wide Statements

Government-wide statements were created with the advent of GASB Statement No. 34, Basic Financial Statements—and Management's Discussion and Analysis—-for State and Local Governments. They are constructed from the information in the fund-based accounting system and other records maintained by the government. However, these statements are more than just a summary of the information in the fund financial statements. They present a different view of a government's resources. Understanding how they are constructed is an important step in understanding and interpreting the government-wide statements.

The purpose of the government-wide financial statements is to demonstrate operational accountability—to provide information on the results of operations and the financial condition of the overall government. The fund financial statements are used to address fiscal accountability.

Operational accountability provides information about the medium and long-term effects of current and past financial decisions. It should assist users in assessing

• the service levels that ...