What information is required in the introductory section of a state or local governments CAFR?

This Statement amends the portions of NCGA Statement 1, Governmental Accounting and Financial Reporting Principles, that guide the preparation of the statistical section. The statistical section presents detailed information, typically in ten-year trends, that assists users in utilizing the basic financial statements, notes to basic financial statements, and required supplementary information to assess the economic condition of a government.

Three shortcomings have been identified in the statistical section since NCGA Statement 1 was issued in 1979. First, NCGA Statement 1 presented a list of fifteen required schedules with no additional explanation of the nature of the information they were to contain. As a result, some governments prepared their statistical sections differently from others, thereby diminishing the usefulness and comparability of the information. Second, the statistical section requirements were oriented to general purpose local governments. Consequently, other types of governments had little guidance on how to adapt the requirements to their circumstances, resulting in incomplete and inconsistent application of the standards and, therefore, additional loss of comparability and usefulness.

Third, the requirements for the statistical section did not encompass the new information that governments are presenting as a result of GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments.

The statistical section is a required part of a comprehensive annual financial report (CAFR), although governments are not required to prepare a statistical section if they do not present their basic financial statements within a CAFR. These circumstances are not altered by this Statement. However, this Statement does apply to any statistical section that accompanies a government’s basic financial statements. The provisions of this Statement are effective for statistical sections prepared for periods beginning after June 15, 2005.

How the Changes in This Statement Improve Financial Reporting

This Statement improves the understandability and usefulness of statistical section information by addressing the comparability problems that have developed in practice and by adding information from the new financial reporting model for state and local governments required by Statement 34. In order to clarify that the requirements are applicable to all types of state and local governmental entities that prepare a statistical section, this Statement establishes the objectives of the statistical section and the five categories of information it contains—financial trends information, revenue capacity information, debt capacity information, demographic and economic information, and operating information. The more specific requirements of this Statement should be adapted by each type of government in order to meet the overarching objectives.

The more specific requirements of this Statement explain more clearly than prior standards the types of information that should be presented in each category of statistical section information. The prior requirements are clarified and updated to better meet user needs. For example, whereas NCGA Statement 1 required a schedule of “miscellaneous statistics,” this Statement specifies that a statistical section should include ten-year trends in three types of operating information—government employment levels, operating statistics, and capital asset information. This Statement also clarifies certain features of previously required information, such as which governmental funds to include in information about trends in changes in fund balances.

This Statement adds new information that users have identified as important and eliminates certain previous requirements. For instance, a government’s statistical section should now include trend information on governmental fund balances and principal employers. On the other hand, governments are no longer required to present in their statistical sections information that users have identified as less useful, such as special assessment levies and collections, construction activity, and bank deposits. Additionally, statistical sections do not have to include a separate schedule of debt service ratios; the most useful information from that schedule will be presented with the changes in fund balances information. The most significant new information added to the statistical section is the government-wide, accrual-based information required by Statement 34. The statistical section will include ten-year trend information about net assets and changes in net assets. The debt information presented in the statistical section will also be more comprehensive due to the inclusion of information from the government-wide financial statements and notes. Finally, this Statement further improves the understandability and usefulness of statistical section information by requiring governments to augment their schedules with notes regarding sources, methodologies, and assumptions, and to provide narrative explanations of (a) the objectives of statistical section information, (b) unfamiliar concepts, (c) relationships between information in the statistical section and elsewhere in the financial report, and (d) atypical trends and anomalous data that users would not otherwise understand.
 

Unless otherwise specified, pronouncements of the GASB apply to financial reports of all state and local governmental entities, including general purpose governments; public benefit corporations and authorities; public employee retirement systems; and public utilities, hospitals and other healthcare providers, and colleges and universities. Paragraph 2 discusses the applicability of this Statement.

We are providing certain data supplied to us by the Municipal Securities Rulemaking Board ("the Service") without warranties or representations and on an "as-is" basis. WE HEREBY DISCLAIM ALL REPRESENTATIONS AND WARRANTIES (EXPRESS OR IMPLIED), BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING THE SERVICE. You shall bear all risk, related costs and liability and be responsible for your use of the Service.

The transaction data provided through the Real-Time Transaction Subscription Service represents municipal securities transaction data made available by brokers, dealers, and municipal securities dealers to the MSRB and related information. Such transaction data and/or related information may not exist for all municipal securities and may not be required to be submitted to the MSRB for certain types of municipal securities transactions. The MSRB does not review transaction data submitted by submitters for accuracy, completeness or any other purpose, and does not warrant or guarantee the accuracy of any such transaction data and/or related information.

The MSRB, its officers, directors, employees, agents, consultants, and licensors shall not be liable or responsible to you or anyone else for any losses, injuries, damages, costs, expenses or claims caused by, arising out of or relating to the following: (a) acts, omissions, occurrences or contingencies beyond their control; (b) service interruptions or performance failures, such as those that result from the use of telecommunications facilities that are outside of their control, including the Internet: (c) negligence, gross negligence or willful misconduct in procuring, compiling, interpreting, editing, writing, reporting or delivering any of the content and material; (d) lost, stolen, late, corrupted, misdirected, failed, incomplete or delayed transmissions by anyone using the Service, including, but not limited to, any technical malfunctions, human error, computer viruses, lost data transmissions, omissions, interruptions, deletions, defects, hyperlink failures or line failures of any telephone network, computer equipment, software or any combination thereof; (e) damage to your computer systems, equipment, software, data or other tangible or intangible property resulting from or sustained in connection with your use of the Service; and/or (f) any disruption of business, lost sales or lost profits or any punitive, exemplary, indirect, special, incidental, or consequential damages associated or in connection with, resulting from or arising out of any use of the Service or the content and material in the Service.

The MSRB and its officers, directors, employees, agents, consultants, and licensors shall have no liability in tort, contract, or otherwise (and as permitted by law, product liability) to you or anyone else for any reason associated or in connection with, resulting from or arising out of your use of the Service. The MSRB, its officers, directors, employees, agents, consultants, and licensors make, and have made, no recommendations regarding any of the securities or other investment vehicles, referred to or described in the Service.

The Service is reproduced by permission of the MSRB under a non-exclusive license. The MSRB accepts no responsibility for the accuracy of the reproduction of the Service or that Service is current.