What does the Annual Financial Statement provide in local government?

The Annual Financial Statement is crucial in the context of local government as it serves as an account of the prior year's financial operations. This document typically outlines the revenues collected and expenditures made, thereby providing transparency and accountability in how public funds have been utilized.

In most jurisdictions, the statement is presented at the end of the fiscal year and is often unaudited at the first instance, meaning it reflects factual financial information based on records without the formal verification typical of an audited report. This helps stakeholders, including citizens and policymakers, understand the efficiency and effectiveness of the local government’s financial management over the past year.

The other options highlight aspects that do not align with the primary purpose of the Annual Financial Statement. For example, an audited report, while important, refers to a different document that typically follows the Annual Financial Statement and offers a more rigorous level of verification. Future financial plans and cash flow forecasts are also relevant in budget discussions but are not the focus of the Annual Financial Statement, which is retrospective rather than prospective. Thus, the role of this statement is specifically to reflect on past financial activity, making the choice regarding its description as an unaudited report of prior year operations the most accurate.