Analysis of a Governmental Entity’s Financial Statements

 1. The purposes of this project include:

      - An in-depth look at how a governmental entity conducts its business.

      - Understanding the accounting system for governmental entities and the operation of various funds and accounting groups.

      - An evaluation of the entity’s strengths and weaknesses of its financial conditions such as revenues, expenditures, debt services and unfunded liabilities.

      - Providing the interested parties (e.g., city council, state representatives, citizens and county residents) with useful information concerning the entity’s operational performance and financial position.

2. In this project, each individual student would:

- choose a governmental entity (State, County or City): by February 28, 2013

- obtain Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2012.

- study and analyze the CAFR.

- prepare a progress report by March 28, 2013.

- prepare final report and submit by April 30, 2013.

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3. Final report should be arranged in the following order with binding and should not exceed 15 pages, excluding exhibits and appendices.

            (1) Cover page: Title of the project

            (2) Overall Outline

- Title of Contents

                        - Transmittal letter

                        - Executive summary

            (3) General Information

            (4) Governmental Entity’s Funds

            (5) Evaluation of Financial Conditions

            (6) Exhibits/Appendices/References/Other materials

            (7) Government-wide financial statements & Fund (at least GF) financial statements from CAFR.

4. General Information

            - Discuss CAFR and all related components for the governmental entity.

            - Your discussion should include the three sections of CAFR (Introductory, Financial and Statistical section)

5. Governmental Entity’s Funds

            - Identify all the funds used in the governmental entity (e.g., GF, SRF, DSF etc.)

            - Analyze each fund.

6.  Evaluation of Financial Conditions

            - Use the financial measures in Chapter 10 of the textbook (Illustrations 10-3 & 10-4).

- Calculate these measures using all the information from CAFR.

- Measures should be compared with benchmarks and checked against applicable red flag levels.

- Provide brief interpretation for each financial measure as well as overall conclusions.

- Conclusions should include potential causes or sources for financial strains/strengths, and predictions on financial conditions in the forthcoming years (short-term and long-term).

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