Reporting Entity and Component UnitsBegin by identifying the reporting entity, typically a city, county, or other governmental organization.

Determine if there are any component units included in the CAFR. Component units are legally separate entities for which the primary government is financially accountable. These should be explicitly listed in the CAFR.

Audit of Financial Statements

Find information on who performed the audit of the financial statements. This is usually an independent external auditing firm.

Identify the type of audit opinion received. Most government entities aim for an unqualified (clean) opinion. If the opinion is other than unqualified, the reasons for the qualification should be explained in the auditor’s report.

Financial Statements Included

Common financial statements in a CAFR include the Balance Sheet, Statement of Revenues, Expenditures, and Changes in Fund Balances, Statement of Net Position, Statement of Activities, and notes to the financial statements.

Major Governmental Funds

Identify which governmental funds are considered “major” in the CAFR. This determination is typically based on a combination of quantitative and qualitative factors, such as the size and significance of the fund.

Fiduciary Funds

Determine if there are any fiduciary funds in the CAFR. Fiduciary funds account for assets held by the government in a trustee capacity. They are not funded by the government itself but hold assets for others.

Internal Service or Enterprise Funds

Identify any internal service or enterprise funds. These funds are used to account for activities that provide services to other departments within the government (internal service) or to external customers (enterprise). Assess whether they are self-sustaining based on their ability to cover their own costs.

Statement of Activities

List the three largest programs and their associated expenses on the Statement of Activities.

Identify the associated program revenues. Assess their self-sustainability based on whether program revenues cover program expenses.

Please note that the specific content and format of CAFRs can vary from one governmental entity to another, so it’s essential to refer to the specific CAFR you’re analyzing for detailed information. Additionally, accessing the most recent CAFR for a particular entity will require visiting the relevant government’s website or contacting their finance department directly.