Discussion 100 to 150 words _ (6 questions)
• This will be probably the most important discussion we have, the 60-day rule. In government, as you can see we have few estimates.
If we make all receipts only count if the cash is received (or paid) within 60 day of year end, by the time we complete financial reports (usually within 90 days of year end) we KNOW what will be collected.
This fits with the current approach we use for funds. While only required for property tax, we generally use this rule for ALL taxes. So, if a tax is for the 2018 (June 12017-July 2018) budget, it is revenue in 2018 if collected before September 29th, 2018.
If not, it will become revenue when it is collected. If it is collected before July 1, 2017, it is not considered revenue either since it is not available (budgeted) until July 1. We have a similar approach for matching costs.
Why would we avoid estimates? What about Sales or Income taxes?
• Financial ratios are different in government and serve different purposes. Identify one item and a measure used in government that evaluates that item. Try to identify an area and a measure not already addressed,
• The budget is the ruler as we have seen. In this sense, a CAFR is a report on budgetary compliance more than anything else. There is no past or future, only the current period when it comes to the budget.
With this in mind, which is more important, Service Effort Accomplishments or Government-wide Statements?
• In government, budgets make the world go around and are much different than business budgets. In fact, the federal shutdowns have occurred because budgets were not approved. There are several budgets for the feds.
In this course, the ideas are the same but we need to look at state and local. In this case, IL has been shutdown by the current governor over the past few years.
Why would a government shut down occur? Should this only happen with discretionary spending?
• GASB requires that the financial information reported in the governmental funds balance sheet be reconciled to that reported in the Governmental Activities column of the government-wide statement of net position.
Similarly, for the information reported in the statement of revenues, expenditures, and changes in fund balances
Why do we need reconciliation and what are the common methods that typically differ and have to be reconciled?
Define the key financial analysis of an entities financial position, financial condition, and economic condition?