Utilizing the CAFR obtained for Exercise 1–17, in Chapter 1, review the governmental fund financial statements and related data and government-wide financial statements. Note particularly these items:
a. Statement of Activities at the Government-wide Level. What is the most costly governmental function or program operated by the government? Do any of the functions/programs have net revenue? How much of the cost of governmental activities was borne by taxpayers in the form of general revenues? Did the entity increase or decrease its governmental activities unrestricted net position this year? Did the entity increase or decrease its business-type activities unrestricted net position this year?

b. Statement of Revenues, Expenditures, and Changes in Fund Balances for Governmental Funds.
(1) Revenues. What system of classification of revenues is used in the governmental fund financial statements? List the three most important sources of General Fund revenues and the most important source of revenue for each major governmental fund. Does the reporting entity depend on any single source for as much as one-third of its General Fund revenues? What proportion of revenues is derived from property taxes? Do the notes clearly indicate recognition criteria for primary revenue sources? Are charts, graphs, or tables included in the statistical section of the CAFR that show the changes over time in reliance on each revenue source? What have been the trends in revenue sources over time?
(2) Expenditures. What level of classification of expenditures is used in the governmental fund financial statements (e.g., fund, function or program, organization unit, activity, character, object)? List the three largest categories of General Fund expenditures; list the largest category of expenditure of each major governmental fund. Are charts, tables, or graphs presented in the statistical section of the CAFR to show the trend of General Fund expenditures, by category, for a period of 10 years? What has been the trend in expenditure categories? How does the trend in expenditures compare to the trend in revenues? Is expenditure data related to non-financial measures such as population of the government or workload statistics (e.g., tons of solid waste removed or number of miles of street constructed)?
(3) Other Financing Sources (Uses). Are other financing sources and uses reported in a separate section of the statement of revenues, expenditures, and changes in fund balances, below the revenues and expenditures sections? Do the line items indicate the nature of each financing source or use?
(4) Special or Extraordinary Items. Are any special or extraordinary items listed? What note disclosures are provided to help explain the items? 

c. Budgetary Comparison Schedule or Statement. Does the government present budgetary comparisons as a basic governmental fund financial statement or as required supplementary information (RSI) immediately following the notes to the financial statements? Is the budgetary comparison title a schedule rather than a statement? Does the budgetary comparison present the original budget and the final amended budget? Does the budgetary schedule present actual data using the budgetary basis of accounting? Has the government presented one or more variance columns? Does the CAFR indicate that budgetary reporting practices differ from GAAP reporting practices? If so, does it explain how the practices differ?