Creating reports against the relational database is now officially supported in Team Foundation Server
Came to know about this while working for one of my customers. Please note that Creating reports against the relational database is now officially supported. In general, you will want to use the Analysis Services cube for historical reports, or reports that require segmenting multiple parameters of aggregate data. The cube is the best choice to handle this type of report. However, the relational database lets you create reports that pull loosely related data together in ways that are not possible by using the cube
For more details, please refer the msdn article below:
msdn.microsoft.com/en-us/library/ee939347(VS.100).aspx#RelationalDB
Also, for knowing the concept on creating compensating records for work item tracking, please refer the following link:
Written by: Nitish Nagpal, Support Escalation Engineer