CAFR Project Guidelines and Questions

Project Guidelines

The CAFR project will be due on the day of the Final Exam.  It must be turned in at the beginning of class.  There will be no emailed or late projects accepted. A zero will be given.  The project should be no less than 10 pages and doubled space.  Please use Times New Roman with the font of 12, and double-spaced.   The project must be typed and there will be no reports accepted in writing.  The most current financial statements need to be analyzed.  Please staple the project and do not use paper clips or crimp at the top of the project. Also, attach the selected CAFR supplements to your analysis.  I will post to Canvas the list of students and their various city assignments.  You are to analyze the city that I have chosen and not the city of your choice.   Attached to your report all of the supporting CAFR documents that you have reference.  You do not have to attach the whole CAFR report.

The first objective is to go on the internet and scan the CAFR of the city assigned and it various reports and financial statements:

Audit Report

Management Discussion and Analysis

Government – Wide Statements

Statement of Net Position

Statement of Activities

Fund Financial Statements

Governmental Fund Financial Statements

Balance Sheet

Statement of Revenues, Expenditures, and Changes in 

Fund Balance

Proprietary Fund Balance Statements

Statement of Net Position

Business – Type Activities

Enterprise Funds

Governmental Activities

Internal Service Fund

Fiduciary Funds

Statement of Fiduciary Net Assets

Special Revenue Fund

Combined Schedule of Programs Revenues and Expenses

After you review the above statements, the following questions need to analyzed and answers be given.

1.  Are the financial statements audited, who was the auditor, and what type of opinion was  given? 

2.  Write a brief narrative of the important/major concerns or recommendations of the Management Discussion’s and Analysis? 

3.  In the general fund, does it report the functions of the reporting entity and business activities?

4.  What kind of revenues of general revenues are available to cover the net cost of governmental activities?

5.  What are the basis(es) of accounting does the general fund report?

6.  What type of assets are used and liabilities incurred in the general fund, and what kind of general revenues are earned in the general fund?

7.  What kinds of general revenues are available to cover the net cost of governmental activities?

8.   Were there any activities that were profitable and explain the reasons that they were profitable?

9.   Give a description of the current assets and current liabilities and determine whether the difference between current assets and current liabilities gave the entity enough working  capital?

10. Is the reporting that is done in the general fund consistent with the basis of accounting being followed?

11. List the names of government funds other than the General Fund that are included in the as major funds, and determine whether they are special revenue funds, debt service funds, capital projects funds, or permanent funds.

12. List the funds in the proprietary fund, and do the financial statements provide evidence that all proprietary funds use accrual accounting?

13. As far as fiduciary funds are concerned, list the funds and indicate whether they are they are agency funds, investment trust funds, pension trust funds, a private-purpose trust funds, and indicate their basis of accounting.  

14.  Review the notes to the financial statements and answer the following questions: What significant accounting policies are discussed in the first note? Are there any material violations or legal concerns Are there any deficit fund balances or net assets?

15.  Review the statement of activities at the government-wide level and answer the following questions:

a.Are the government prepared statements in compliance with the GASBS 34 financial  reporting model?

b.What is the costliest government function of program operated by the government?

c.How much of the cost of government activities was borne by the taxpayer’s in the form of general revenues?

16.  Review the statement of revenues, expenditures, and changes in fund balances for governmental funds and answer the following questions: 

a.List and discuss the three most important sources of the general fund revenues.

b.Does the reporting entity depend on any single source which is as much as one third of the general fund revenue?

c.What proportion of revenues is derived from property taxes?

17.  List the three largest categories of the general fund expenditures and explain the function of each expense.

18.  Review the special revenue funds and answer the following questions:

a.What statements and schedules pertain to the special revenue funds?

b.Discuss whether the current expenditures further their function.

19.  List three fiduciary funds and discuss their purpose.

20.  In a couple of paragraphs explain as to whether you believe that the city being analyzed has substantial net assets for continuance of service or any concerns that the city being analyzed has substantial liabilities that may cause the city to have financial problems.