Utilizing the CAFR obtained for Exercise 1-1, in Chapter 1, review the governmental fund financial statements and related data and government-wide financial statements. Note particularly these items:

  a.  Statement of Activities at the Government-wide Level. Has the government prepared statements in compliance with the GASBS 34 financial reporting model? Does the statement of activities appear on one page or across two pages? What is the most costly governmental function or program operated by the government? How much of the cost of governmental activities was borne by taxpayers in the form of general revenues? Did the entity increase or decrease its governmental activities unrestricted net assets this year? Did the entity increase or decrease its business-type activities unrestricted net assets this year?

  b. Statement of Revenues, Expenditures, and Changes in Fund Balances for Governmental Funds.

   (1) Revenues and Other Financing Sources. What system of classification of revenues is used in the governmental fund financial statements? List the three most important sources of General Fund revenues and the most important source of revenue for each major governmental fund. Does the reporting entity depend on any single source for as much as one-third of its General Fund revenues? What proportion of revenues is derived from property taxes? Do the notes clearly indicate recognition criteria for primary revenue sources?

   Are charts, graphs, or tables included in the CAFR that show the changes over time in reliance on each revenue source? Are interfund transfers reported in the same section of the statement as revenues, or are they reported in other financing sources?

  (2) Expenditures and Other Financing Uses. What system of classification of expenditures is used in the governmental fund financial statements? List the three largest categories of General Fund expenditures; list the largest category of expenditure of each major governmental fund.

   Are charts, tables, or graphs presented in the CAFR (most likely in the statistical section) to show the trend of General Fund expenditures, by category, for a period of 10 years? Is expenditure data related to nonfinancial measures such as population of the government or workload statistics (e.g., tons of solid waste removed or number of miles of street constructed)?  

  c. Budgetary Comparison Schedule or Statement. Does the government present budgetary comparisons as a basic governmental fund financial statement, or as required supplementary information (RSI) immediately following the notes to the financial statements? Is the budgetary comparison title a schedule rather than a statement? Does the budgetary comparison present the original budget and the final amended budget? Does the budgetary schedule present actual data using the budgetary basis of accounting? Has the government presented one or more variance columns? Do all blended component units use the same budgetary practices as the primary government of the reporting entity? Does the CAFR state this explicitly, or does it indicate that budgetary practices differ by disclo- sures in the headings of statements, the headings of columns within statements, or by narrative and schedules within the notes to the financial statements?