State and local governments play an important role in the U.S’s economy. According to the Governmental and Nonprofit Accounting, “State and local government is truly big business. The 50 states and 87,000 local governments within the United States employ more than 17 million persons – almost six times the federal government civilian employment – and spend more than $1.8 trillion annually” (Freeman, Shoulders, Allision, Patton and Smith, p.32). The Escambia County, located in the northwestern part of the state, was established July 21, 1821 as a non-charter government when the Provisional Governor Andrew Jackson signed an ordinance making the county one of the first two counties in Florida, the other being St. Johns County (Escambia County – CARF, 2013, p.7). Escambia County’s Comprehensive Annual Financial Report (CAFR) focuses on several factors that affect the financial statement such as local economy, long-term financial planning and major initiates, and relevant financial policies.
The purpose of this paper is to provide a comprehensive analysis about Escambia County’s CAFR bases on those above factors. In addition, the paper will discuss the independence auditors’ report and the management’s discussion and Analysis section in order to understand even more insight about the overall financial statement.
The analysis section begins with the definition of important terminologies within the financial statement. Analyzing and comparing the financial statements of the two years period, from 2012 to 2013 will be discussed after. Finally, the paper will inspect the external factors such as the unemployment rate, states and local economy in order to detect the correlation and how those factors impact the financial statement data.
II- The Important Terminologies The financial reporting model has been called a “dual perspective” model because it requires reporting two methods: fund financial statements and government-wide financial statements (Freeman,