ACCOUNTING ANALYSIS OF CAFR PROJECT
Grand Rapids' CAFR is posted in the content area of Black Board.
REQUIRED:
Part A: Write a two page overview of the City of Grand Rapids. You will discuss the following:
1. The demographics of the city and the region.
2. The economics characteristics of the city and its region.
3. The nature of the City government, that is how is the government of Grand Rapids organize.
Part B: Prepare short, written answers to the following questions. You do not need to use complete sentences (bullet points are fine) but you should use proper English and spelling. If a particular question or part of a question does not apply to your city, indicate that in your answer. You will use 12 Front New Times Roman.
Part B should not be more than ten pages.
QUESTIONS
1. Who was the independent auditor? Is the auditor's opinion unqualified? If not, describe the qualification(s). In the Summary of Significant Accounting Policies read the information about the bases of accounting used by the reporting entity. Determine which methods were used by the governmental and proprietary fund types.
2. Which financial statements are included in the General Purpose Financial Statements? Do they agree with the statements discussed in class and in the text? Does the reporting entity report information from Component Units? Is that information "blended" or "presented discretely"? What types of activities are conducted by the Component Units? What is GASB 61 and does the MD&A make mention of this GASB?
3. Look at the General Fund statements from the point of view of a financial analyst. Is the Fund Balance as of the balance sheet date larger or smaller than the Fund Balance at the end of the preceding year? Are reasons for the increase/decrease clear from the statements? What are the reasons? Did the expenditures stay within the budget in all categories?
4. Look at the Capital Projects Fund information. Does the accounting appear to conform with GASB standards for capital projects funds?
5. What additional disclosures regarding capital outlays are included in your report? Are there any additional items of information you would like to know about capital projects that are not furnished in your report?
6. Look at the Debt Service Fund information. Does the accounting appear to conform with GASB standards for Debt Service funds? List any additional disclosures regarding general obligation debt service requirements. What additional information would be helpful in analyzing the debt service function of the entity?
7. Attempt to look at the debt service expenditures from the viewpoint of a financial analyst. A Schedule of Debt Service Requirements to Maturity should appear in the notes to the financial statements. Do the future payments appear reasonable, considering the size of the community and revenues that are currently being raised?
8. Do the notes describe the accounting policy for acquisitions of general fixed assets? Does the disclosure clearly indicate that depreciation expense is not recorded in governmental funds? Do the notes disclose the policy regarding reporting of infrastructure assets? Do you believe infrastructure should be capitalized? Why or why not? What other note disclosures are made regarding fixed assets?
9. Does the report disclose the condition or age of general fixed assets? Can you tell the extent to which the governmental unit is replacing its fixed assets as needed? Is there any information given about the condition of general fixed assets, including infrastructure and replacement policies? What changes would you recommend in financial reporting to provide some of the information you might need?
10. Does the report you have disclose the rating of each debt issue? If so, are all issues rated the same? What are the ratings? Do you think the information presented in the report would help you decide if you would invest in additional tax-supported debt of the entity? Would you? What additional information would you like to have related to the debt of the entity?
11. List the internal service funds? Do the funds appear to be classified appropriately? Are all the funds providing services only within the reporting entity? Are all internal service funds operating at breakeven? Accumulating retained earnings? Operating at a deficit?
12. List the enterprise funds found in your report. Are all of these funds accounted for in the same manner as business organizations? Review the financial condition and operating results of each of the enterprise funds. Are any of the funds operating at a deficit? If so, how is the deficit being financed? Look carefully at transfers to see if enterprise funds are transferring large amounts either in or out. If you find large transfers, carefully review the report to see if you can determine why the transfers were made (for example, to make up a General Fund deficit).
13. Does the annual report include a Combining Statement of Changes in Assets and Liabilities - All Agency Funds? If so, list the agency funds for which data are presented. Can you determine the reason for the use of each agency fund?
14. List the pension funds included in the financial statements. From the notes, list the other pension plans that are available to employees of the entity. Are required disclosures made in the notes for all pension plans, whether or not the plans are included as trust funds? What is the current financial condition of the Pension Funds?
Attachment:- COMPREHENSIVE ANNUAL FINANCIAL REPORT.rar