Which statement regarding primary governments is FALSE?

The assertion that all special districts selected through general election qualify as primary governments is not accurate. For a special district to qualify as a primary government, it must meet specific criteria beyond just being elected. The essential requirements include being legally separate and having its own governing body with the capacity to enact laws or regulations. Therefore, simply being a special district elected through a general election does not automatically grant it the status of a primary government, as there are additional fundamental aspects regarding its structure and purpose that must be considered.

Understanding the role of primary governments is crucial in financial reporting, as they are the main entities responsible for financial accountability and reporting within the governmental framework. This includes local governments and state governments that have sovereignty and can levy taxes, among other powers.

As a refresher, general-purpose local governments, such as cities and counties, inherently qualify as primary governments because they accommodate a broad remit of functions, such as public safety and infrastructure, which are hallmarks of a primary government. Similarly, legally separate entities like special districts must not only meet criteria of legal standing but also demonstrate governance capabilities to qualify as primary governments under applicable accounting standards.