Examine the CAFR. Download a copy of the most recent comprehensive annual financial report (CAFR) for the City and County of Denver from its or that of another city or county if you wish.∗?Familiarize yourself with the organization by scanning the report and reread the section in this chapter entitled “Financial Reporting of State and Local Governments.” Be prepared to discuss in class the items suggested below.
a. Introductory Section.
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examine these tables so that you can refer to them in discussions accompanying subse 641466
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Read the letter of transmittal or any narrative that accompanies the financial statements. Does this material define the governmental reporting entity and name the primary government and all related component units included in the report? (Note: The reporting entity may be discussed in the notes to the financial statements rather than in the transmittal letter.) Does the introductory section discuss the financial condition of the reporting entity at the balance sheet date? Does it discuss the most significant changes in financial condition that occurred during the year? Does it alert the reader to forthcoming changes in financial condition that are not as yet reflected in the financial statements? Do the amounts reported in the letter of transmittal or other narrative agrees with amounts in the statements and schedules in the financial section? Does the introductory section include a list of principal officials? An organization chart? A reproduction of a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA)? Assuming the government follows GASBS 34, compare the information in the letter of transmittal with that in the management discussion & analysis (MD&A).
b. Financial Section.
(1) Audit Report. Are the financial statements in the report audited by an independent CPA, state auditors, or auditors employed by the government being audited? Does the auditor indicate who is responsible for preparing the financial statements? Does the auditor express an opinion that the statements are “in accordance with generally accepted accounting principles applicable to governmental entities in the United States” or some other phrase? Is the opinion qualified in some manner, disclaimed, or adverse? Does the auditor indicate that the opinion covers the basic financial statements or that plus combining statements?
(2) Basic Financial Statements. Does the CAFR contain the two government wide financial statements and seven fund statements and required reconciliation?
(3) Notes to the Financial Statements. How many notes follow the required basic financial statements? Is there a phrase at the bottom of the basic financial statements indicating that the notes are an integral part of the financial statements?
(4) Individual Fund and Combining Statements. Following the notes to the financial statements, does the CAFR provide combining and individual fund statements? Do these combining statements aggregate all the funds of a given fund type or all the non major funds?
(5) Management’s Discussion and Analysis (MD&A). Does the CAFR contain an MD&A? If so, where is it located and what type of information does it contain?
c. Statistical Tables.
Examine these tables so that you can refer to them in discussions accompanying subsequent chapters. For example, is multiyear information provided about financial trends, revenue capacity, debt capacity, demographic and economic trends, and operating activities?
