What happens if there is no separate financial report from a component unit with multiple funds?

When a component unit with multiple funds does not provide a separate financial report, the appropriate approach is to include that information in the financial section of the Comprehensive Annual Financial Report (CAFR). This ensures that all financial activities and positions of the component unit are presented alongside the primary government's financial statements, providing a complete and transparent view of the financial standing within a single document.

Including the data in the CAFR allows stakeholders, such as investors, creditors, and the public, to access relevant financial information, fulfilling the accountability requirements that government entities have to their constituents. It also helps maintain consistency and completeness in reporting, ensuring that oversight bodies can accurately assess the financial health and operations of the entire governmental entity, including its component units.

This method of reporting underscores the principle of transparency in government finance, as it consolidates necessary financial data for comprehensive analysis, which could not be achieved by either omitting the information or limiting it only to internal use.