REVIEW PROCESS

Introduction

The review process is very simple. It involves only two worksheets (schedules). [NOTE: Most people are not interested in the details of forms and explanations of the forms. However, in The CAFR eBook both forms are presented in a couple of ways as well as a spread sheet program and a word processing program for each of school district, city, county and State.]

A computer is not needed to conduct a review or do an economic impact analysis. All that is needed is:
   -A copy of the governments Comprehensive Annual Financial Report (CAFR)
   -Two forms
   -A sharp pencil
   -A calculator.

Steps in conducting a review and preparing the economic impact analysis

1. Get a copy of the governments/school districts most currrent Comprehensive Annual Financial Report (CAFR).

2. Go to each fund/subfund section , locate the accounts with surpluses based on the steps shown below; total them for each subfund, and write them down as shown below. In addition the Exhibit A in each of the State reports provided in this writing. The Exhibit A is the complete review. So a person has over 40 examples to use in the learning process.

3. Total the list of subfund surpluses to arrive at the total surpluses for the government.

4. Divide the result in Step 3. by the population and you have the per capita surpluses.

5. Take the total surplus amount to the proper economic impact form and complete the computations shown for each cell in the economic impact form. The computations are very simple.

That's it. The next step is preparing a report on the results of the review and economic impact analysis. Go to the Report Section of this writing.

THE COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) REVIEW

The Typical Table of Contents

Most Table of Contents usually have this sort of format. The Schedules in red are the ones that we will be using to determine surpluses.

Table of Contents

INTRODUCTORY SECTION	Page
Letter of Transmittal.............................................................................................	1
State Government Organizations.............................................................................	8
Principal State Officials..........................................................................................	9
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT........................................................................	15
MANAGEMENT'S DISCUSSION AND ANALYSIS.........................................................	21
BASIC FINANCIAL STATEMENTS

Governmental-wide Financial Statements:
Statement of Net Assets...............................................................................	36
Statement of Activities..................................................................................	40

Governmental Fund Financial Statements:
Balance Sheet...........................................................................................	43
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets.......................................................................................................	44
Statement of Revenues, Expenditures and Changes in Fund Balances.....................	45
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities............................	46

Proprietary Fund Financial Statements:
Statement of Net Assets.............................................................................	48
Statement of Revenue, Expenses and Changes in Fund Net Assets........................	52
Statement of Cash Flows..............................................................................	54

Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Assets..............................................................	58
Statement of Changes in Fiduciary Net Assets..................................................	59

Component Unit Financial Statements:
Combing Statement of Net Assets...............................................................	61
Combing Statement of Activities.....................................................................	62

Notes to the Financial Statements....................................................................	64

REQUIRED SUPPLEMENTARY INFORMATION
(Table of Contents items not shown)

COMBINING FINANCIAL STATEMENTS AND SCHEDULES
Governmental Funds
Combining Balance Sheet...............................................................................	146
Combining Statement of Revenue, Expenditures and Changes in Fund Blances..........	147

Special Revenue Funds:
Combining Balance Sheet.......................................................................	150
Combining Statement of Revenues, Expenditures and Changes in Fund Balances...	152

Debt Service Funds:
Combining Balance Sheet.......................................................................	156
Combining Statement of Revenues, Expenditures and Changes in Fund Balances...	158

Capital Project Funds:
Combining Balance Sheet.......................................................................	162
Combining Statement of Revenues, Expenditures and Changes In Fund Balances...	163

Proprietary Funds:
Enterprise Funds:
Combining Statement of Net Assets.........................................................	166
Combining Statement of Revenues, Expenses and Changes in Fund Balances........	168
Combining Statement of Cash Flows.............................................................	170

Internal Service Funds:
Combining Statement of Net Assets.........................................................	174
Combining Statement of Revenues, Expenses and Changes in Fund Balances........	176
Combining Statement of Cash Flows.............................................................	178

Fiduciary Funds:
Pension Trust Funds:
Combining Statement of Fiduciary Net Assets.............................................	182
Combining Statement of Changes in Fiduciary Net Assets.................................	183

Investment Trust Funds:
Combining Statement of Fiduciary Net Assets.............................................	186
Combining Statement of Changes in Fiduciary Net Assets.................................	187

Agency Funds:
Combining Statement of Assets and Liabilities............................................	191
Combining Statement of Changes in Assets and Liabiliities................................	192

STATISTICAL SECTION
(Many items shown here)
Population by County for the Last Ten Years..................................................	216
etc.

You can see that the schedules in red are not very many. Now there are three schedules that are in green. Whether there are surpluses in these three schedules depends on circumstances which wil be explained later.

What type of accounts are we interested in

Here is a partial list of the types of names that are given to cash and investment type accounts. There are more in the reports in this writing:

Amounts on deposit with U.S. Treasury
Cash and cash equivalents
Cash and Investments
Cash and pooled investments
Cash and securities held in trust
Cash and temporary investments
Cash equity with Treasurer
Cash held by trustee
Cash on deposit with agents
Cash with fiscal agents
Collateral on lent securities
Dedicated Investments
Equity in pooled cash and investments
Investment in [certain fund or project]
Investments Investments held by trustee
Investments net amortization
Investments, noncurrent
Net investment in direct financing assets
Other assets
Pooled Investments with State Treasury
Securities lending cash collateral
Restricted cash and cash equivalents
Restricted investments

In the schedules listed below the cash and investments that are used to compute the surpluses are marked in red.

Items not Included

The following items are not included in the amount of surplus shown:

-Buildings, roads, bridges, land (not for sale), and equipment.

-Deferred compensation plans for employees. These are plans in which the employee contributes to his/her retirement over and above the normal employee retirement contribution.

-Any fund that is 100% supported by donations, bequests, gifts, endowments, etc. These are not taxpayers money.

-For Colleges and Universities. All endowment and similar-type funds should not be included as surpluses. Sometimes these funds are combined with other college/university funds. We are interested in surpluses, so in these cases the total amount should not be included.

-Funds in which the revenues/contributions are 100% held for other individuals, organizations or another government. (Note: There are sometimes problems in the way these funds are described and can result in the fund being considered surplus due to the lack of enough information.)

-Funds that are required by law in which a bank, financial institution, insurance companies, etc. are required to deposit with the government a certain amount for insurance against the entity going bankrupt. These are not taxpayers' money.

-Retirement/Pension Funds - only included are 1/2 of the actuarially determined excesses, the taxpayers portion. The other 1/2 is the government employees portion.

What Schedules Do we Look At

In the CAFR we are only interested in certain schedules in that massive document you have of schedules. These are the schedules you will be looking at:

Balance Sheets
Combining Balance Sheets
Statement of Net Assets
Combining Statement of Fiduciary Net Assets
Combining Schedule of Accounts

We forget about the rest of the schedules. This means that we have excluded almost 2/3 of the schedules. Now we are down to less than 35 schedules (pages) for States and much less for school districts, cities, and counties. I have had school districts that I used only 10 schedules (pages) to conduct the review of the CAFR. With a State CAFR of over 200 or more pages, 35 max is very little.

Basic Financial Statements

Go to the Section called "Basic Financial Statements" in the CAFR.

Note: The page number shown next to the "(Expressed in Thousands)" is added so that you can see in the Table Of Contents what schedule is being used.

The first schedule you see looks something like this:

Statement of Net Assets
June 30,2003
(Expressed in Thousands)- Page 36

**PRIMARY GOVERNMENT**
	Governmental Activities	Business-Type Activities	Total Primary Government	Component Units
ASSETS:
Current Assets:
Cash	2,132	93,200	95,332	13,341
Cash with U.S. Treasury		860,872	860,872
Cash and pooled investments with State Treasurer	1,537,024	169,818	1,706,842	53,497
Cash held by trustee				24,489
etc.

You can forget the above-type schedule. These data will be provided again broken down into something meaningful. Note: I have put the page number so that you can relate to the Table of Contents for the schedule.

Governmental Funds

This is the first schedule that is important. The figures in red are the surpluses.

The Page Nr. 146 shows the page in which the Other Governmental Funds are shown in more detail, so they are not used here for surpluses.

Balance Sheet
GOVERNMENTAL FUNDS
June 30,2003
(Expressed In Thousands)-Page 43

	General Fund	Transportation & Aviation Planning Highway Maintenance & Safety Fund	Land Endowments Fund	(Page 146) Other Governmental Funds
Assets
Cash	719		28	1,385
Cash and pooled investments with State Treasurer	564,659	151,425	60,203	691,158
Receivables, net of allowance
Taxes	286,869	68,683		7,832
Interest	15,697	861	2,143	2,476
Loans and Notes			260,229
Other	26,718	18,366	548	22,801
Due from U.S. Government	148,021	69,929		153
Due from local governments	1,577	41
Due from others				9
Due from other funds	276,216	20,264	291	57,607
Inventory of food stamps	86
Inventories, at cost	11,300	4,693		2,607
Restricted assets
Cash and pooled investments with State Treasurer	18,259	312,889		192,697
Cash held by trustee	86,843			33,611
Endowment investments			1,119,469
Other	344			27

Total Assets	1,437,308	647,151	1,142,911	1,012,363
(Following not part of schedule)
Total Surpluses...	670,480	464,314	1,179,700

Proprietary Funds

This is the second schedule that is important. The figures in red are the surpluses.

Statement of Net Assets
PROPRIETARY FUNDS
June 30,2003
(Expressed In Thousands)-Page 48
BUSINESS ACTIVITES-ENTERPRISE FUNDS

	Universities	Unemployment Compensation	Industrial Commission	Other
Assets
Current Assets:
Cash	86,749	29	6,087	332
Cash with U.S. Treasury		860,872
Cash and pooled investments with State Treasurer	115,978		308	18,596
Collateral investment pool	34,251		35,274
Short-term investments	50,325			60
Receivables, net of allowance
Taxes		39,659
Interest	582		2,054	310
Loans and Notes	4,320			4,357
Other	40,274	11,692	17	4,766
Due from U.S. Government	53,234	11,692	17	58
Due from local governments				381
Due from other funds				109,632
Inventories, at cost	17,326			7,939
Other Current Assets	4,442			567
Total Current Assets	407,481	912,252	43,740	146,998

Non-Current Assets:
Restricted assets:
Cash	92,446
Cash and pooled investments with State Treasurer				102,398
Cash held by trustee	25,809
Investments held by trustee	103,174		3,387
Loans and notes receivable, net of allowance	27,838			24,256
Investments	157,321		185,404
Endowment investments	208,783
Other long-term assets	10,227			179
Capital assets:
Infracstructure, land and other non-depeciable	296,227		2,997	2,063
Depreciable buildings, property and equipment	3,465,743		27,303	55,587
Less: accumulated depreciation	(1,628,342)		(5,584)	(35,897)
Total Noncurrent Assets	2,758,226		213,507	148,586
Total Assets	3,166,707	912,252	257,247	295,584
(Following not part of schedule)
Total Surpluses...	680,722	860,901	230,460	122,132

Only a few of the schedules are shown because most people are not really interested in the details. [NOTE: In The CAFR eBook every schedule is shown with the surpluses annotated.]