A Comprehensive Annual Financial Report (CAFR) is a set of U.S. government financial statements comprising the financial report of a state, municipal or other governmental entity that complies with the accounting requirements promulgated by the Governmental Accounting Standards Board (GASB). GASB provides standards for the content of a CAFR in its annually updated publication Codification of Governmental Accounting and Financial Reporting Standards. The U.S. Federal Government adheres to standards determined by the Federal Accounting Standards Advisory Board (FASAB). A CAFR is compiled by a state, municipal or other governmental accounting staff and audited by an external American Institute of Certified Public Accountants (AICPA) certified accounting firm utilizing GASB requirements. It is composed of three sections: Introductory, Financial and Statistical. It combines the financial information of fund accounting and Enterprise Authorities accounting.
The National Committee on Municipal Accounting (NCMA) was formed in 1934 by the Government Financial Officers Association to create accounting standards. As a result of its work, the 'Principles of Municipal Accounting', the predecessor to the CAFR, was created. The successor to the NCMA, the National Council on Governmental Accounting (NCGA), issued 'Governmental Accounting, Auditing and Financial Reporting', which is the basis of the format for the current standard. This document, known as the "Blue Book", and its successors documented the CAFR accounting structure and provided standardization and example documents. By 1946, the various levels of government—federal, state, local and municipal—each began producing a CAFR to catalog an accurate picture of institutional funds, enterprise or financial holdings, assets and total investment incomes for those government and nongovernmental entities using the report. This measure is above and beyond the budget process and replaced what was regularly an "off-the-books" practice called the "general fixed-asset account group". General Purpose government "budget" reports did not reflect accounting of this financial data, only reporting on the budget or "rainy day" funds or pension fund investments. By the 1970s, the CAFR became the nationwide paradigm for local government accounting.
The resulting CAFR is presented to the GFOA, which conducts each year a review of applicant local government CAFRs and upon review awards their Certificate of Achievement Award for Excellence in Financial Reporting to those local governments that are in compliance with their CAFR accounting standards of preparation. Presently, accounting principles for government entities are set by transmittal letters issued to local governments by the GASB.
The primary difference between a budget and a CAFR is a budget is a plan for a specific fiscal period (often a year) primarily showing where tax income is to be allocated. The CAFR contains the results of the period (year) with previous years accumulations. A CAFR shows the total of all financial accounting that a general purpose budget reports does not. The CAFR contains a section that provides a comparison of period budget and actual. Additionally, the CAFR gives a detailed showing of investment accounts by category reflecting balances over previous years, or in plain language using a personal example in comparison would be the difference between: Your house Budget for the year vs your statement of "Net Worth" covering the financial accounting over your lifetime. 1-year vs your lifetime.
A Government budget document is a blueprint for a "specific grouping" of government agencies' spending over the course of an annual financial period. General Purpose Budgets contain both the spending categories of specified units of government, such as school districts, social services, transportation, courts, police, fire, and park services; along with estimates of revenues expected to occur during the year, such as investment return; due from other funds, overrides of money from the previous year, and tax payments. They are usually more limited to the expected costs of running the aforementioned government operations through tax income as opposed to describing the status of any government fixed assets and investment wealth.
A CAFR is a report of the complete overall financial results not just for the year but what has accumulated since the inception of that local government of both those "specific groupings" of government agencies that appear in the current fiscal year General Purpose Budget and all other agencies and departments. These can be autonomous, enterprise (for example government or city owned golf courses), recycling, water, sewer, and financial management - often these agencies were created with the inception of that local, state or government. The CAFR provides information about all of these other government agencies that may have their own budgets and separate investment accounts but their financial holdings are not combined with the general purpose budget that the same government presents to the public. The CAFR, or as it is called in CANADA CanFR can be used along with a budget document to compare the organizations total financial standing to the annual general purpose budget. The CAFR is the complete showing of the financial investment and income records from all sources, that reflects what has developed over decades whereas a budget report is an inferior document to the CAFR being that it is primarily focused on what revenue is expected to be brought in and spent for just the year.
In contrast with the rules applying to governments, publicly traded US companies are required by the U.S. Securities and Exchange Commission (SEC), to provide their Annual Financial Report (AFR) to every shareholder each year. Government's accounting falls under GAP (Generally Accepted Procedures)overseen by GASB.org for government accounting. US Companies have their own standards of accounting which would not be accepted by the SEC if US Companies attempted to use local Government's GAP accounting. To view the GASB.org accounting changes in local government CAFR GAP accounting, a short version of each change going back to 1984 can be viewed here - 
News stories covering financial issues of government cite "rainy day funds" or special "ear marked" funds, loans between government entities, sales of government holdings in, for example, shares of a health care insurance company, self insurance management funds, debt repayment funds that can be up to 40% of the debt itself, and then the "budget" is often referred to, along with mentions of pension funds investments, but the full accounting of assets of government entities, the "CAFR" is typically not mentioned.
"Alternative" media, since the late 1990s, has exposed segments of the public to the subject of the (U.S.) CAFR contributing to the topic being labeled as "conspiracy theory" or "soap box" issue. In all reality, local government's "Net Worth" accounting document, the CAFR is a mandatory review document for any responsible taxpaying citizen.
Reporting on government financial issues can be seen as sensationalized in dealing with alleged excesses in spending or tucked away wealth held not clearly visible in the budgetary accounting. A $10,000 dollar Christmas tree for example, or vague mentions of "many billions" in referring to issues around the road improvement, self-insurance, debt repayment, and pension funds managed by a state.
The State of TX based on good due diligence to its residents publishes a "Cash Report" that lists all funds managed by the state. The 2014 TX Cash Report can be viewed here -  In one recent series of reports, the Kentucky Association of Counties whose spending came under scrutiny by the Lexington Herald-Leader provided some awareness of these types of entities as well as their surpluses and the claimed spending excesses while using money acquired from government fees for products like municipal insurance at premium rates, which build surpluses beyond the needs of the entity.
Typical topics of the alternative media may include examples of: government entities financing each other's bond issues; Orange County California's or other divisions of government investments in derivatives; financial deals that are kept from the public to entice businesses to locate in a state, which may include tax incentives in exchange for stock assets in a company.
Much of both the mainstream and alternative media coverage of the topic of government financial issues must be considered a factor in public's confidence towards issues of government accountability.