ABSTRACT
This entry describes local government financial condition, its importance, and discusses how the Comprehensive Annual Financial Report can provide useful information for local government financial condition analysis. The entry discusses how preventing financial problems requires early alert analysis to proactively identify trends and practices that may adversely impact financial condition. It points out the multitude of factors such as economy and demographics; revenue base; current and capital expenditures; debt, pensions, and other postemployment benefits; internal resources; management capabilities; infrastructure; and willingness to raise revenues and provide the required public services that impact financial condition.
