You have a friend who was just elected to the County Board for your county. One of the first items of business for the County Board is to prepare a budget for the new fiscal period. Your friend does not understand the county governmental entity financial reporting requirements so you volunteer to assist by preparing a report on the financial statements and the management’s discussion and analysis (MD&A) of the county government.
Obtain the preface and summary of GASB Statement 34, “Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments” (GASB 34). You may obtain these from the GASB’s Web site (www.gasb.org), from your library, or from the GASB’s Governmental Accounting Research System (GARS), a computer-based database sold by the GASB. Then answer the following questions.
a. GASB established the requirement for government annual reports to include a management’s discussion and analysis (MD&A). Describe the purposes of the MD&A in a government’s annual report.
b. GASB 34 discusses both fund financial statements and government-wide financial statements. (1) Discuss the major contents of the fund financial statements and why those statements are necessary in the government’s annual report.
(2) Discuss the major contents of the government-wide financial statements and why those statements are necessary in the government’s annual report.