9-1. According to the Bureau of Census a special district includes “local entities (other than counties, municipalities, townships, or school districts) authorized by state law to provide only one or a limited number of designated functions, and with sufficient administrative and fiscal autonomy to qualify as separate governments.” As can be seen from this definition a special district is a type of special purpose government.
A primary government is broader in scope than a special district. According to GASB a primary government can be a state government, a general purpose government, or a special purpose government. To qualify as a primary government, GASB indicates a special ...view middle of the document...
Organizations making up a financial reporting entity are the primary government and its component units. The primary government is a state or local general-purpose government, or a special-purpose government. Component units are the entities for which the primary government is financially accountable.
9-5. A component unit is a legally separate entity for which the primary government is financially accountable. The GASB also considers a component unit to be an entity
Ch. 9, Answers, 9-5 (Cont’d)
whose relationship with the primary government is so important that excluding it from the financial reports of the primary government would make the primary government’s financial reports misleading. Financially accountable means that the primary government appoints a voting majority of the component unit’s governing board and is able to impose its will on the component unit, or there is the potential for the component unit to provide specific financial benefits to, or impose specific financial burdens on the primary government.
9-6. General purpose external financial reports include management’s discussion and analysis, basic financial statements and related notes, and required supplementary information. A CAFR provides information beyond the minimum requirements of the general purpose external financial statements. Included in a CAFR are all general purpose external financial...