What Are the Annual Financial Report Components?

Audit Opinion (AFR Attachment)

Notes to the AFR (AFR Attachment)

Auditor's Questionnaire (AFR - Page 2, Part 1)

Financial Data Questionnaire (AFR - Page 2, Part 2)

Basic Financial Statements (AFR - Pages 3 - 8)

Individual Fund Statements (AFR - Pages 9 - 21, See Exhibit 1)

Supplementary Schedules Attachments (AFR -
Pages 22- 26)

Statistical Section (AFR - Pages 27 - 29)

Audit Opinion (AFR Attachment)

The opinion is a report issued by the auditor that identifies the nature (scope) of his/her work and degree of responsibility assumed. The auditor's objective when doing the audit is usually to express three types of opinions.

Financial:  Concerns whether the AFR fairly presents the school district's financial position and results of operation according to one of two possible "bases of accounting"; and whether the accounting principles used have been applied consistently with the prior year.

"Basis of accounting" refers to the point in time when financial transactions are recognized. The options are:

1. Generally Accepted Accounting Principles (GAAP)
2. Cash.

Internal Control: Concerns the school district's internal control system used to:

1. safeguard against waste, fraud, and inefficiency
2. encourage accuracy of accounting and financial data
3. encourage and assess compliance with school district policies
4. assess the efficiency of school district operations.

At a minimum, the opinion includes the:

1. scope of the auditor's work in understanding the internal control system and its risks
2. significant internal controls to ensure compliance with laws and regulations that have significant impact on the AFR and results of operations
3. significant weaknesses identified as a result of the auditor's review.

An opinion is issued for the internal control system used in administering federal financial assistance.

Compliance: Concerns noncompliance that significantly effects the AFR regarding:

1. Federal, State, and local laws and regulations and
2. school district board of education restrictions or policies.

Significant exceptions are the main focus.

Federal regulations require "questioned costs" to be reported when they can be determined or when it is not clear if they are eligible for federal reimbursement.

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Notes to the AFR (AFR attachment)

The auditor's notes summarize/explain accounting policies and other disclosures determined by the CPA as appropriate under the circumstances.

The notes provide information for fair presentation and understanding of the school district's financial position and results of operation.

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Auditor's Questionnaire (AFR - Page 2, Part 1)

Because complete review of all state compliance requirements (laws) established by the Illinois Compiled Statues is not possible, a list of major issues is provided on this questionnaire. The auditor reviews/tests the school district's state compliance and answers each question, as appropriate.

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Financial Data Questionnaire (AFR - Page 2, Part 2)

The Financial Data Questionnaire is a survey completed by the school administrator that helps the State board of Education identify school districts in financial difficulty.  The State Board of Education may take further action, when any condition identified on the questionnaire occurs.

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Basic Financial Statements (AFR - Pages 3 - 8)

The Basic Financial Statements provide an overview of:

1. (1) the school district's financial position for all funds and account groups and
2. (2) the operating results of all funds

The information summarizes the detailed individual fund statements (AFR Pages 9 through 56). Separate columns are used for each fund and account group.

Balance Sheet (AFR - Pages 5 & 6) See Exhibit (1)

The Balance Sheet is an itemized statement that lists the school district's total assets and liabilities to identify its fund balance at a given point in time.  On the AFR, this point in time is June 30th.

The Balance Sheet identifies three major account groups: (1) ASSETS - the resources held by the school district which have monetary value; (2) LIABILITIES - the debt or other legal obligation the school district has that results from past transactions and must be paid, renewed or refunded; and (3) FUND BALANCE - the difference between the (fund) assets and (fund) liabilities. Fund Balance identifies what the school district owns/equity.

Statement of Change in Financial Position (AFR - Pages 7 & 8) See Exhibit (2)

The Statement of Change in Financial Position is a statement reflecting the school district's total revenues; expenditures; other financing sources / uses; and changes in fund balance (equity).

This is a summary of all revenues, expenditures, other financing sources / uses; and shows whether the school district has financial improvement or decline as a result of operations.

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Individual Fund Statements

Revenue and Expense by Fund (AFR Pages 9 through 21) See Exhibit (3)

These pages show revenues and expenditures by fund and compare them with the respective accounts of the adopted School District Budget (see glossary).

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Supplementary Schedules

Attachments (AFR - Pages 22 - 26)

The schedules present, in greater detail, the data reported elsewhere in the AFR. The information demonstrates:

1. compliance with finance related legal /contractual agreements (such as federal compliance) or
2. gathers information contained throughout the AFR in greater detail.

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Statistical Section (AFR - Pages 27 - 29)

The statistical section differs from the rest of the AFR in that the information may cover more than two fiscal years or present non-accounting information.  The section provides either:

1. an understanding of historical events relating to capital expenditures or
2. estimated statistics relating to expenditures per pupil

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