What is a Comprehensive Annual Financial Report (CAFR), and what sections are typically included?

• A. A monthly summary of financial activity; includes cash receipts, expenditures.
• B. A concise budget document; includes revenue and expenditures.
• C. An annual financial report detailing financial statements, management's discussion and analysis, and required supplementary information; includes fund statements and notes.
• D. A technical audit report filed with the state.

Answer: (C)

A Comprehensive Annual Financial Report is an annual, formal record that presents a government’s full financial picture, not just what was planned in a budget. It typically includes management's discussion and analysis, basic financial statements (covering both government-wide and fund statements), notes to the financial statements, and required supplementary information. The fund statements and notes provide detailed information about major funds and other fiduciary activities, while the RSI adds additional data such as pension and other post-employment benefit schedules. Some CAFRs also include introductory and statistical sections to give context and trend information. This description aligns with what a CAFR is and what it contains, unlike monthly summaries, concise budgets, or separate audit reports, which do not provide the complete annual financial view.