Financial reporting problem ii part 1

Assignment 1: Financial Statement / Audit Report Review

Government & Not For Profit

Select one (1) local government in your state or area and review the financial statements and audit report for the county or municipality. The financial statements of the government you selected should have at least three (3) funds. Refer to the continuing problem homework for Weeks 1 through 3 for this assignment.

Write a (3-4) page paper in which you:

1. Compare and contrast the comprehensive annual financial report (CAFR) of the selected local government entity with the government entity identified from Week 1 homework. In your comparison, include:

a. Publication method of the CAFR

b. Audit and budget information in the CAFR

c. The type of audit report issued

d. Existence or non-existence of an internal audit function within the government entity

2. Prepare the analysis for the selected local government entity, including information on the introduction, financial section, and statistical section prepared in the continuing problem CAFR from chapter 2.

3. Analyze the methods used by the selected local government entity in comparing the budget-to-actual reports. Your analysis should include an evaluation of the basis of accounting used for the budget and financial statements.

4 .Analyze the sources of revenue on the selected local government. Your analysis should include information on both governmental and business-type activities of the government. In your report, be sure to examine

a. Property taxes and how they are accounted for

b. Other sources identified as primary revenue for the entity

c. Deferred revenue

d. Year-to-year variations in the tax levels of income

e. Various management discussion and analysis items of note

f. Information about the general fund

*****The paper was supposed to be an analysis and comparison of your local government's CAFR to the City of Austin CAFR we have been covering as part of the homework. Please see the rubric which details this. You need to find a CAFR for your local town or state and compare it to Austin.

MY LOCAL TOWN IS WASHINGTON D.C: Here is the LINK to get to the (CAFR- Comprehensive Annual Financial Report) : https://cfo.dc.gov/sites/default/files/dc/sites/ocfo/publication/attachments/FY%202018%20DC%20CAFR_Full%20Report.pdf

Here is the LINK to get to the (CAFR – Comprehensive Annual Financial Report) for CITY OF AUSTIN Texas) : https://assets.austintexas.gov/financeonline/downloads/cafr/cafr2018.pdf

REMEMBER:! “ You need to compare Washington D.C CAFR report to the City Of Austin Texas CAFR REPORT.

Your assignment must follow these formatting requirements:

· Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.

· Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

· Evaluate the financial reporting of state and local governments and assess the reporting requirements in accordance with governmental accounting standards board (GASB).

· Analyze governmental activities related to expenditures and expenses.

· Use technology and information resources to research issues in government and not-for-profit accounting.

· Write clearly and concisely about government and not-for-profit accounting using proper writing mechanics.

Click here to view grading rubric.

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Links Below Allow you to Click on C

BELOW: Is my HOMEWORK WEEK 1 INFORMATION AND QUESTIONS ABOUT CITY OF AUSTINS CAFR: PLEASE VIEW CAREFULLY AND USE ANY INFORMATION BELOW NESSESARY TO COMPLETE THE PAPER!

**** IF THERE IS ANY INFORMATION THAT IS INCORRECT WHILE WRITING THE PAPER, PLEASE FIX WHEN YOU ARE WRITING THE PAPER ***** PLEASE AND THANK YOU!!!!!

1. What are three main sections of the report?

1) Introduction Section 2) Financial Section 3) Statistical Section

2. Review the introductory section of the CAFR.

a. Was the entity’s annual report of the previous year awarded a ‘‘certificate of achievement for excellence in financial reporting’’ by the Government Finance Officers Association? What is the significance of this award?

-Yes they received the Certificate of Achievement for excellence in Financial Reporting for the fiscal year ending September 30, 2010 .On order for the city of Austin to have received this award the report must be easy to read, organized, and follow GAAP and all other legal requirements

b. What are the key issues addressed in the letter of transmittal?

1) Reporting Entity 2) Austin’s government, economy, and outlook a) General Information b) Local economy c) Long-term financial planning d) Budgetary Information) Financial Policies f) Internal Controls g) Budgetary Control h) Major Initiatives 3) Acknowledgments

3. Review the financial section.

a. Which, if any, independent audit firm performed an audit of the CAFR?

Yes there are, the city of Austin’s financial statements were independently audited by Deloitte & Touché

b. Did the entity receive an ‘‘unqualified’’ audit opinion? IF not, why not?

No, the entity received a qualified audit opinion. Because the audit firm conducted the audit in accordance with auditing standards generally accepted by the United States. In Order to ensure this Deloitte received independent information from outside sources and verified the management’s discussion & analysis

c. Does the report contain management’s discussion and analysis (MD&A)? IF so, what are the key issues addressed?

Yes,: 1) Financial highlights 2) Overview of the financial statements 3) Financial analysis of the government-wide statements 4) Other information

d. Does the report provide a reconciliation between total governmental net positions per the government wide statement of net position and total governmental Fund balances per the governmental Funds balance sheet? IF so, what are the main reconciling items?

Yes, 1) Total fund balance 2) Amounts reported for government activities in the statement of net assets 3) Long-term liabilities are not payable in the current period & are not reported in the funds

e. What are the major governmental funds maintained by the entity? Does the entity’s fund structure conform to its organizational structure?

1) General Fund 2) Non-major governmental funds 3) Special Revenue Funds 4) Debt Service Funds 5) Capital Projects Funds 6) Permanent Funds 7) Non-major Enterprise Funds 8) Internal Service Funds 9) Fiduciary Funds a) Private-Purpose Trust Funds b) Agency Funds 10)Yes the entity fund structure conform to its organizational structure

f. Does the report include ‘‘required supplementary information’ ’If so, what are the main are as addressed?

Yes, the report includes ‘required supplementary information page

1) General Fund – Schedule of revenue, expenditures &changes in fund balances – budget & actual-budget basis 2) Notes to required supplementary information 3) Retirement plans 4) Other post-employment benefits

g. Does the report include ‘‘combining statements’’? If so, what is the nature of these statements?

Yes, this report includes combined statements. The purpose of these combined statements is to combine the information within each of the funds. For example, debt services would combine all of their accounts and services to one report

h. Does the report include other supplemental information? If so, what types of information are in this section ofthe report?

Yes, there are other supplemental information included in this report. The other supplemental information is the supplemental schedules

4. Review the statistical section. What is the population of the entity being reported on?

a. What is the population of the entity being reported on?

The population of the City of South Bend for 2014 was 101,168.

b. Who is the entity’s major employer?

The City of South Bends major employer in 2014 was the University of Notre Dame.

c. What types of information are included in the statistical section?

The statistical section included lots of information about the City including financial trend, revenue capacity, debt capacity, demographic and economic along with operating information.

5.Operating Information– Includes various information including new construction permits and property values, full time city employees by department, salary rate comparison, and financial institutions.

the continuing problem CAFR from chapter 2.: HOMEWORK WEEK 2 INFORMATION:

1. In which section of the Comprehensive Annual Financial Report (CAFR) are the budget-to-actual comparisons of the major funds?

1. Which accounting basis did the City follow to prepare its annual operating budget?

Answer: The budget-to-actual comparisons of the major funds are located in the financial section under Required Supplementary Information.

-The City followed the budgetary basis to prepare its annual operating budget.

2. Are the actual amounts on a GAAP or a budgetary basis? Do the statements include a reconciliation of any differences between GAAP and budgetary amounts? If so, what are the largest reconciled items?

Answer: The actual amounts are on a budgetary basis. The statements include a reconciliation of differences between GAAP and budgetary amounts. The largest reconciled items are:

- encumbrances for services and supplies ordered but not received, proceeds from the sale of capital assets, and inter fund transfers from other funds.

3. Are the reported variances based on the original budget or the year-end amended budget?

Answer: The variances are based on the final budget and not the original budget.

2. Does the CAFR include budget-to-actual comparisons of nonmajor funds? If so, in what section?

Answer: Yes, the CAFR includes a budget-to-actual comparison of non-major funds. This is included in the financial section, under the general fund.

3. Does the government encumber goods or services that have been ordered but have not yet been received? How, if at all, are encumbrances reflected on the governmental fund balance sheet? How, if at all, are they reflected on the government-wide statement of net position?

Answer: Yes, the government encumbers goods or services that have been ordered but not yet received. These encumbrances are reflected on the governmental fund balance sheet as reserves under general fund. They are not reflected on the government-wide statement of net position.

4. Do encumbrances that remain outstanding at year-end lapse? That is, do the amounts that will be expended in the following year, when the goods or services are received, have to be rebudgeted in the following year? How can you tell?

Answer: Yes, encumbrances that remains outstanding at year-end lapse. Yes, the amounts have to be re-budgeted in the following year. This can be said because the prior year encumbrances got re-appropriated on the balance sheet as a prior year expense.