In an Annual Comprehensive Financial Report (ACFR) for a state or local government, the letter of transmittal and the Management's Discussion and Analysis (MD&A) serve distinct purposes.

Letter of Transmittal: The letter of transmittal is typically the introductory section of theACFR. It serves as a formal communication from the government's top executive (e.g., governor, mayor) to the legislative body, stakeholders, and citizens. Its primary purpose is to provide a concise overview of the government's financial condition and performance, highlight key achievements and challenges, and express management's commitment to financial transparency and accountability.

Management's Discussion and Analysis (MD&A): The MD&A is a more detailed and analytical section that follows the letter of transmittal. Its purpose is to offer an in-depth analysis of the government's financial results, significant trends, economic factors affecting the entity, and any material budget variances. It also discusses the government's financial plans, capital projects, and long-term obligations, providing a comprehensive understanding of the financial context.

While both disclosures provide essential information about the government's financial position and performance, they are not duplicate. The letter of transmittal is more of a summary and policy-oriented document, focusing on broader governance and strategic issues. In contrast, the MD&A delves into the financial data with a focus on analysis, providing more granular details and insights. Together, they offer a holistic view of the government's financial landscape, with the letter of transmittal serving as an introduction to the more detailed content found in the MD&A.