GOVERNEMNTAL & NON-PROFIT ACCOUNTING
Government Portion
Instructions:Download a copy of the most recent comprehensive annual financial report (CAFR) for a local government (city, county, special district, etc…) of your choice. Make sure you obtain a full CAFR and not just an annual financial report for this project. You can usually access a City’s CAFR by doing a search on “City of (name) CAFR” and looking for a link to the city’s departments. In most instances, you will find the most recent statement will be from June 30, 2014. The only CAFR that you are not allowed to use is the City of Fresno as we use it as a reference several times during the semester. Once your group has been formed and you have selected a local government, please submit your group members’ names and your selected CAFR to your instructor for approval. Each group must pick a different CAFR so if your choice has already been taken, you must select again.
Prepare a report covering the following topics noted below. You will be graded on your ability to read the CAFR and the quality of your responses. PROOF READ your work before you turn it in as writing technique (i.e. grammar, spelling, etc) will be considered as well. The main portion of this project is to portray your knowledge of what the CAFR is telling you so correlate back to the material in the course as much as possible. Also, make sure that this report is written in your OWN WORDS. Do not copy and paste any thoughts or paragraphs from the CAFR (although if you would like to include tables that support one of your opinions that is perfectly fine).
1. Governmental Fund Financial Statements –
a. Review the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balance for Governmental Funds.
b. Provide a summary highlighting major items and any opinions you have regarding what the statements are telling you. To get you started, here are topics you can discuss (including but not limited to):
i. what types of assets are included on the governmental funds balance sheet,
ii. do they segregate between current and noncurrent,
iii. list the names of the governmental funds (other than the General Fund) that are included as major funds,
iv. of the major funds identify what type of fund they are (i.e. special revenue, capital projects fund, debt service or permanent),
v. list the three most important sources of revenue for each major governmental fund,
vi. what proportion is derived from taxes,
vii. list the three largest categories of General Fund expenditures,
viii. list the three largest category of expenditure of each major governmental fund.
ix. Discuss the different categories of fund balance, including nonspendable, restricted, committed, assigned or unassigned?
x. Are there any important items identified in the Notes to the Financial Statements that cause concern or intrigue?
c. Comment on any other item that stands out to you on this statement.
2. Budgetary Comparison Schedule or Statements–
a. Provide a summary highlighting major items and any opinions you have regarding what the statements are telling you. To get you started, here are topics you can discuss (including but not limited to):
i. Does the government present budgetary comparisons as a basic governmental fund financial statement or as required supplementary information (RSI)?
ii. How many budgetary statements/schedules did you find?
iii. For the General Fund budget, were any items found to be significantly over/under budgeted?
iv. What is there highest resource (inflow) budgeted for?
v. What is their highest appropriation (outflow) budgeted for?
vi. Would you recommend any changes to the budget based on actual amounts for the year?
b. Comment on any other item that stands out to you on this statement or schedule.
Not all CAFR’s will contain both of the following funds. As such, you only need to respond to questions from either the Capital Projects Fund (number 7) OR the Debt Service Fund (number 8) described below.
3. Capital Projects Fund:
a. Describe how the Capital Projects Fund is accounted for.
i. Where did you find this information in the CAFR?
b. Give a brief description as to what types of capital projects the government is involved in.
c. Review the statements and schedules pertaining to capital projects funds.
i. Are there separate capital projects funds for each project, several funds that account for related projects, or is only on fund used for all projects?
d. What is the nature of the financial resource inflows utilized by the capital projects fund (i.e. taxes, bonds, special assessments, etc).
i. How much detail is given concerning capital projects fund expenditures?
ii. Is the detail sufficient to meet the information needs of administrators, legislators, creditors, interested residents?
e. Comment on any other item that stands out to you.
4. Debt Service Funds:
a. Describe how the debt service function for tax-supported debt is handled (i.e. by the General Fund, Special revenue fund or by one or more debt service funds).
b. Review the schedule or list of investments of debt service funds and discuss increases/decreases in the fair value of investments realized during the year.
i. What percentage of revenue of each debt service fund is derived from earnings on investments?
ii. What percentage of revenue of each debt service fund is derived from taxes levied directly for the debt service fund?
iii. What percentage is derived from transfers from other funds?
iv. List any other sources of debt service revenue and other financing sources.
c. Considering the debt maturity dates as well as the amount of debt and apparent quality of debt service fund investments, does the debt service activity appear to be properly managed?
d. Comment on any other item that stands out to you.