The Management Discussion and Analysis (MD&A) is a narrative that provides a brief, objective, and easily readable analysis of the government’s financial activities based upon currently known facts, decisions, or conditions. Further, it provides the management of a county government with the opportunity to present both a shortterm and a long-term analysis of activities. MD&A is not a required part of the basic financial statements, but is supplementary information required by the GASB.
Currently, the omission of the MD&A will not adversely affect the audit opinion of a Tennessee county’s financial statements. Any county that decides to include a MD&A should reference the latest edition of Governmental Accounting, Auditing and Financial Reporting (i.e. the Blue Book) and the Government Finance Officers Association Web site for the most up-to-date reporting requirements. Management also should communicate with their external auditor about the desire to prepare an MD&A in order to determine when the narrative must be completed for inclusion into the audit report.