What is CAFR and what are its main components?
CAFR is a comprehensive annual financial report for government agencies. It includes the organization’s year-end financial statements. Main components of a CAFR typically include an introductory section, which includes a letter of transmittal, an organizational overview, and details about organizational officials. The next main component is the financial section. In this section users can locate an independent auditor’s report, management’s discussion and analysis, basic financial statements, required supplementary information, and a combination of financial statements and schedules. A CAFR may also include a third section for statistical information. Differences between a budget and a comprehensive annual financial report mainly exist between the purpose for which each is prepared. A government entity is required by GASB to prepare two sets of financial statements, the government-wide statements and the fund financial statements. The government-wide statement consolidates all of the e