Audits of State and Local Governments

Chapter 6 SPECIAL-PURPOSE GOVERNMENTS AND SPECIAL PURPOSE FRAMEWORKS

LEARNING OBJECTIVES

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

• Recognize the reporting requirements for special-purpose governments engaged in governmental, business-type, and fiduciary activities.
• Identify the special purpose frameworks applicable to state and local governments.
• Identify the required disclosures for special-purpose financial statements.
• Recognize the appropriate format for the auditor's reports for special purpose financial statements.

ARE THESE REPORTS DIFFERENT?

How should financial statements for things like public colleges, hospitals, housing authorities, or organizations engaged in only one program be reported? Do they have to produce both fund financial statements and government-wide statements and do the statements have to look the same? That depends on a number of different factors. This chapter will try to answer these questions.

Background

Most of the information in this course has been directed to general-purpose governments — such as states, cities, counties, and towns. However many governmental entities do not fit this category and are referred to as special-purpose governments. These organizations are separate legal entities that may be component units of another government or may be stand-alone governments that do not meet the definition of a general-purpose government.

Special-purpose governments that are engaged in more than one program ...