Comprehensive annual financial report

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A Comprehensive annual financial report (more commonly, CAFR) is a government financial report, which goes beyond the minimums established for public sector entities by NCGA statement 1. A CAFR has three major sections : Introductory, financial, and statistical.^[1] The CAFR is often created using fund accounting.

1 History
2 CAFR vs. Budget
3 See also
4 External links
5 References

[edit] History

A CAFR as a government book keeping practice started with the establishment of the National Committee on Muncipal Accounting (or NCMA) in 1934. The various levels of government each began producing a CAFR in the late 1940's to early 1950's to catalog an accurate picture of institutional funds, or financial holdings, assets and total investment incomes for those government and nongovernmental entities using the report, which is above and beyond the budget process.

In 1968, the NCGA published a watershed document titled "Governmental Accounting Auditing and Financial Reporting", giving many example documents and providing useful standardization. This document and its succssors are known as the "Blue Book". Accounting principles for government entities are today set by the Governmental Accounting Standards Board (GASB).

[edit] CAFR vs. Budget

A budget document is a blueprint for spending over the course of a financial period - typically over a fiscal year. Budgets contain both the spending categories of any unit of government, such as for police, fire, park services, etc; along with estimates of revenues expected to occur during the year, such as tax payments.

A CAFR, by contrast, is meant to report the financial results for the fiscal year. It can be used along with a budget document to assess how well the government was able to stick to its financial blueprint. The CAFR shows accounting entries the basic budget reports do not, and should not be confused with "rainy day funds" that are included in government budgetary reports and process.

A former US Air Force Accountant, Gerald R. Klatt and a former commodities broker Walter Burien, have made controversial claims, since at least 1996, about the CAFR or "2nd set of books", with their assessments of government assets holdings and investment supporting globalism and free trade. In recent years (1999) changes have been made to the GASB rules and claims have been made that such changes are some of the attempts to hide assets and "enterprise funds" from the general public after some sporadic media attention on these issues.