What is a Comprehensive Annual Financial Report?
Vol. III, No. 104 - Any day now, these juicy reports will be released
Your message can be here!
Are you interested in becoming a sponsor of Civic Capacity? This publication has grown substantially with a subscriber roll of nearly 2,500 indidividuals receiving this newsletter daily. If you are interested in partnering to get your word about your civic minded business, please email pinnaclestrategiesltd@gmail.com.
As we get closer to fall, one of the most anticipated annual documents for local governments will be released soon; the Comprehensive Annual Financial Report, commonly referred to as a CAFR. These reports are traditionally released by the Auditor of State this time of year. The CAFR takes the place of a state audit; each year, all governments are audited to ensure that dollars that are spent are accounted for. More than a simple review of expenditures and revenues, the CAFR offers a comprehensive view of the government's financial health over multiple years. It provides detailed insights into past expenditures, by looking at different financial aspects of the community such as the current value of assets and investments managed by the local government in question.
What is a Comprehensive Annual Financial Report and What Does it Say?
A Comprehensive Annual Financial Report (CAFR) serves as a cornerstone in the financial transparency and accountability of local governments. It's an extensive document that offers a detailed view of a government entity's financial status, including its income sources, expenditures, assets, and liabilities. Understanding the purpose of a CAFR and the benefits it offers to both citizens and investors is crucial for anyone engaged in community governance or interested in public sector finance. Some of the benefits that the CAFR provides includes:
Comprehensive Financial Overview: Unlike regular financial reports, a CAFR presents a complete picture of a local government's financial condition. It includes not just the government's operating results for the year but also its long-term financial commitments and assets. This includes physical assets (like buildings and infrastructure) and long-term obligations (like pension liabilities).
Adherence to Accounting Standards: The CAFR is traditionally prepared by a third-party accounting and auditing firm in accordance with the accounting principles established by the Governmental Accounting Standards Board (GASB). This ensures that the financial data is presented consistently and in line with the highest standards, facilitating comparability over time and with other entities.
Public Confidence and Transparency: By providing a detailed and complete financial picture, CAFRs help in building public trust. They demonstrate to the citizens and stakeholders that the government is managing its resources responsibly and is committed to transparency.
More than a Traditional Audit
There are some significant differences between a traditional audit and a CAFR.
Scope and Focus: A traditional audit primarily focuses on the accuracy and fairness of a government's financial statements. An auditor reviews the financial records and gives an opinion on whether the financial statements present a true and fair view of the government's financial position. In contrast, a CAFR provides a more comprehensive and detailed report, including statistical, economic, and demographic information.
Content and Depth: While an audit report usually contains the auditor's opinion, balance sheets, income statements, and notes to the accounts, a CAFR includes these elements and much more. It has three major sections: the introductory section (providing an overview and organizational information), the financial section (with the auditor's report, management's discussion and analysis, basic financial statements, and required supplementary information), and the statistical section (offering additional financial, economic, and demographic data).
Purpose and Usage: An audit's primary purpose is to ensure the accuracy of financial statements and compliance with accounting standards. A CAFR, however, is geared towards providing a detailed and transparent overview of the financial health of the government for a wide range of stakeholders.
What are the Benefits of a CAFR?
At first glance, CAFRs can be somewhat intimidating documents, with their immense size and never ending tables and charts, but understanding a CAFR can provide some important benefits for those residents willing to take the time and review the vital information in the document.
Informed Decisions for Citizens: Citizens benefit from CAFRs as they offer an in-depth look at how their local government is managing public funds. This information is essential for holding elected officials accountable and making informed decisions at the ballot box.
Investor Confidence: For investors, particularly those interested in municipal bonds, CAFRs provide a wealth of information to assess the financial health and creditworthiness of a local government. This detailed financial data helps in making informed investment decisions.
Economic Insights: CAFRs also include important economic and demographic information that can be invaluable for businesses and researchers. This data can guide business decisions, like expansion or investments, and provide interested parties with vital information for studies on public finance and governance.
Transparency and Trust Building: The comprehensive nature of CAFRs fosters a culture of transparency and accountability in local governments, which is fundamental in building trust between the government and its citizens.
The CAFR is a critical tool for local governments, providing a detailed and comprehensive picture of financial health and commitments. It goes beyond the traditional audit by offering deeper insights and a broader context. This transparency benefits not only the citizens, who gain a clearer understanding of how their government operates financially, but also investors, who rely on the detailed information in CAFRs to make sound investment decisions. The CAFR plays a vital role in promoting informed decision-making, accountability, and trust within the community.
If you have interest in looking at the City of Troy’s lastest CAFR, that information is available on the Auditor of State’s website at and search “Troy” or any other local community in the search box: http://ohioauditor.gov/auditsearch/search.aspx
Rest assured, when the CAFRs for our local communities come out, you can learn about them here at Civic Capacity!
Take our September Communty Survey!
September means it’s time for our every-other-month community survey. This three minute survey helps gauge our community’s thoughts on the progress being made in the community and asks you, our residents, on what our opportunities and challenges are.
And this is open to everyone! If the survey gets substantial interaction from other communities, this publication will publish those results!
Thanks for your time and your participation! It is greatly appreciated!
Thank you Readers!
Well, this newsletter was named a “Best Seller” on the Substack platform. But, since we recently lost a paid subscriber, we aren’t on the “Best Seller” list anymore.
Want to show your support and get us back on the list?
Consider spending $5 a month, or $50 a year to support this newsletter and the time, effort and energy it takes to create an opportunity for over 2,400 people each to learn something new about the place they call home.
Your generous support is vital to this effort!
A New Handbook to grow Civic Capacity!
Recently, we created a new digital handbook, “The Citizen’s Guide to Public Records”. This handbook is designed to help residents have a better understanding of public meetings and meeting records. It’s filled with templates, ideas and other information that will open a new world of public affairs.
Also, if you have ideas for future handbooks, please let us know at pinnaclestrategiesltd@gmail.com.
Want to Learn More About Troy’s Businesses?
Our publication has recently released our August 2025 Economic Abstract, the most comprehensive and up-to-date report on the businesses and industries in the City of Troy. For those that want to understand our community’s business and industries, this is a must-have report.
Thank you to our New Media Partners!
Recently, many of our stories has been showing up on the local news website, www.mymiamicounty.com. We are grateful for the good folks for sharing our work with their audience and we would encourage our readers to check them out at their website!
Our publication would also like to recognize the good work being done at www.piquanewsnow.com. Piqua News Now is a new web-based news and information site for the Miami County area, with a specific focus on Piqua!
In addition, the good folks at Piqua News Now have started a new, 24-hour streaming YouTube channel. This channel is awesome with continuous weather updates and more importanly, it provides a 24-hour audio feed from county wide dispatch. Check it out here!
You Can Help Support This Work!
Our readers and subscribers have been asking for a new way to support the work being done here at Civic Capacity! Some of our readers do not like the idea of having to sign up for another subscription service. Some of our subscribers occasionally want to give more support through a one-time transaction.
Civic Capacity is partnering with “Buy Me A Coffee” to give our readers, subscribers and friends an opportunity to give one-time support to Civic Capacity. Personally, I don’t like coffee, but I will never turn down a nice iced tea. If you feel compelled to support this effort, just click the button below. In other words, this is an online tip jar.
Also, thanks for reading today’s Civic Capacity Newsletter! Please feel free to share this information with your friends and neighbors.
Also, please consider subscribing to our work. If you are a free subscriber, please consider becoming a paid subscriber. For less than $1 a week, you can get timely and conversational updates about the decisions that are impacting you and your community!