1) Legal debt limits and debt margins

Statement 34 by the Governmental Accounting Standard Board requires that the report of the CAFR contain a statistical section on legal debt restrictions and debt margins. This gives the foundation for examining whether the company or government has provided for its financial responsibility. The legal debt limits and debt margins are also ways for companies to identify potential traps they may fall into. This is in addition to measuring the government debt and its ability to absorb new debt (see Biancone et al., 2019).

2) 10-year trend data

The section on statistics in front of statement 44 listed a 10-year trend later revised by GASB. However, they are most useful in economic analysis and decision-making. There is also some critical background information, such as a history of the fund’s balances and trends over the last ten years. They are employed to evaluate the stability and soundness of the government finances over time and to analyze its performance (GASB 2023).

3) Notes to financial reports

The MDA section of the financial report contains notes for potential access to their financial performance. This will make it easier for analysts and investors considering management performance and economic fundamentals to obtain accurate information. Also, it sets out the government’s financial goals and considers opportunities, conditions, and realities of the current situation (Biancone et al., 2019).

4) Property tax levy and collection information

Those familiar with CAFR will know that the statistics section contains data on property tax schedules, collection rates versus total levy amounts, and other information concerning property taxes. In any case, the tariffs would be based on the assessed value of residents ‘property and their rates scheduled to cover spending needs.

5) Budgetary schedules

The RSI portion of the financial portion has the budgeting schedules. You may obtain additional data here, including a budgetary comparison schedule—a vital component of external government financial reporting. This must disclose any budget information and explain significant variations about how budgetary programs influence it under GASB statement No. 41.

6) Auditor’s Report

The auditor’s report is included in the financial section of the CAFR report. Retolaza and San-Jose (2021) argue that while independent public sector companies often audit government agencies, state government auditing agencies should also do so. In all cases, the financial statements presented in the report must be accompanied by an opinion analysis.

7) Letter of transmittal

CAFR’s instructions include a letter of transmission. This is the conclusion of a government report. This ensures that the accountant signs the letter. It must also provide accurate and legal information regarding the analysis of financial information.

8) Description of the government’s financial condition

The MDA section of the financial section contains a description of the government’s financial position. According to Lesser et al. (2021), MDA is a management discussion that allows the user to understand better the situation’s circumstances, options, and financial situation. In particular, the MDA section of the financial chapter should provide details of the government’s financial situation.

9) Financial highlights for the fiscal year

The MDA section of the financial section will contain the financial details. In MDA, all statements are examined and evaluated by comparing them with other financial and government financial statements. This includes reform, growth, and conflict in the financial sector. This information is available to those with access to financial information for the current fiscal year (Biancone et al., 2019).

10) Defined benefit pension plan schedules

GASB Rules Answer No. For Pension Plans managed by a foundation or similar organizations and meeting certain conditions. 67. Therefore, in addition to the defined benefit and pension plans offered, the defined benefit plan will also be listed on the RSI. Additionally, RSI’s financial statements should include the latest information on annual results (GASB, 2023).

Part B: Question 1

Governmental Funds

Statement of Activities

This table shows changes in government activities during the fiscal year. The difference between income and expenses reported by the state budget is called the employment statement. It explains how changes such