Introductory section
- Does this material define the primary government? The document has defined the primary government in which the city operates under as the council manger form with six members who are elected for a four year term.
- Does the introductory section discuss the government’s financial condition at the balance sheet date? The introduction briefly discusses the financial position of the government where it states that on a government wide basis, the city’s net assets grew by $19.6 million in that fiscal year which was generated by governmental activities it continues to state that the city’s combined net assets total to $480.6 million as the ended of accounting year, where $87.9 of the total amount is available for unrestricted to finance programs on progress,$37.5 million in governmental programs and $50.4 million in business activities.
- Does it discuss the most significant changes in financial condition changes that occurred during the year? The report vividly touches o the most significant changes that occurred during the year, at the end of the fiscal year the city reported a positive balances in the three major categories which include the net assets where the net assets rose to $480.6 which was an increase by $19.6 million compared to previous year, it also notes that governmental activities accounted for $14.1 million which was an increase by $5.5 million such increase was attributed to capital asset acquisition. In brief, it also highlights the flow of expenditures in the fiscal year where it shows that much of its expenses went to water and waste waster with solid waste and golf causing the least cost to the city. Finally it shows that the assets exceed liabilities by $480.6 million by the end of the fiscal year.
- Does it alert the reader to forthcoming changes in financial condition that are not as yet reflected in the financial statements? The report vividly projects the most significant changes in financial condition of the entity due to commitment to various project and programs.
- Do the amounts reported in the letter of transmittal or other narrative agrees with amounts in the statements and schedules in the financial section? Since the letter of transmittal is delivered in conjunction with financial statements of which is designed to complement the MD&A then the amounts reported must be coherent to avoid contradicting documents. This can be confirmed on page 5 of the report and page 20
- Does the introductory section include a list of principal officials? The list of the principal official is well displayed on the introductory section with Alan l. Krieger as mayor and Paul B. Johnson as deputy mayor other names are well shortlisted on the introductory section.
- A production of a certificate of achievement for excellent in financial reporting from the government finance officers association (GFOA)? The city is issued with a certificate for its comprehensive annual financial report for the year ended june,30 2011 for achieving the highest standards in government accounting and financial reporting.
Financial section
Audit report
- Are the financial statements in the report audited by an independent cpa, state auditors, or auditors employed by the government being audited? The financial statement is audited by independent auditor as depicted on page 3 of the report under the financial section title.
- Does the auditor indicate who is responsible for preparing the financial statements? The auditors clearly state that, “these financial are the responsibility of the city’s management. Our responsibility is to express opinions on these financial statements based on our audit”.
- Does the auditor express an opinion that the statements are “in accordance with generally accepted accounting principles applicable to governmental entities in the united states” or some other phrase? The auditor states that the financial statements referred present fairly in all material respects, the respective financial position of the governmental activities, the business- type activities, each major fund and the aggregate remaining fund information of the city of Yuma, Arizona as of June, 30 2012 and that the financial statements are in conformity with the accounting principles generally accepted in the united states.
- Is the opinion qualified in some manner, disclaimed, or adverse? The information is qualified as the auditors give their opinion of the conformity of the financial statements by city being in conformity with the accounting principles generally accepted in the United States.
- Does the auditor indicate that the opinion covers the basic financial statements or that plus combining statement? The auditor only gives a generalized opinion its not specific on any financial statements and thus it can be alluded that the auditor refers to the general basic financial statements.
Basic financial statements
- Does the CAFR contain both government-wide financial statements and fund statements? The CAFR contains both government- wide statements and fund statements this information is well expressed on page 5 of the report.
Notes to the financial statements
- How many notes follow the required basic financial statements? Two notes, those which are referring to the two basic statements that statement of financial position and revenues & expenditure
- Is there a phrase at the bottom of the basic financial statements indicating that the notes are an integral part of the financial statements? There is a statement at the bottom of the basic financial statements which indicate that the notes thereof are an integral part of the financial statement e.g on page 39.
Other supplementary information
Following the notes to the financial statements, does the CAFR provide other supplementary information, such as combining and individual fund statements? CAFR has provide supplementary information
Management’s discussion and analysis (md&a)
- Does the CAFR contain an md&a? If so, where is it located and what type information does it contain? The CAFR contains the management’s discussion and analysis which is on page 6-15 of the report the main information under this section include notes to financial statements, government – wide financial analysis, government activities, business type activities, financial analysis of the city’s fund, general fund budgetary highlights, debt administration, economic factors and finally contacting the city’s financial management
statistical tables
- Examine these tables so that you can refer to them in discussion accompanying subsequent chapters. For example, is multiyear information provided about financial trends, revenue capacity, debt capacity, demographic and economic trends, and operating activities? The tables and charts has widely discusses all the information for each year indicating all the information pertaining each statement and variables under each category which allows for cross year comparison as well as aiding in getting an intuitive picture of the overall performance of the institution for the periods compared.
Government-wide statements
- What are the titles of the two government-wide statements? The titles are fund financial statements and governmental funds as on page 5.
- Are total assets larger for governmental activities or business-type activities? The governmental net total assets are larger than business type activities with the earlier being valued at $271.1 while the latter is valued at $209.5 million; this information is on page 7.
- Which function or program has the highest net cost? Public safety program has the highest net cost, followed by general government, community design and development, parks, recreation and culture and finally environmental health and protection.
- What kind of general revenues are available to cover the net cost of governmental activities? The general revenues sources are property taxes, sales taxes, franchise taxes, intergovernmental revenues unrestricted grants and contributions, unrestricted investment earnings and gains from sales revenue.
- Were business-type activities “profitable”? They were profitable as total revenues are stated as$50.3 million as total expenses as $44.9 million and thus a profit of $5.4 million was realized.
- That is, is excess of revenues over expenses positive? Yes it is positive with a magnitude of $5.4.
- Are there any component units that are discretely presented as a column on the government-wide financial statements? No, as required the government entities should only produce the statement of financial position and statement of activities as is followed in the report.
General fund
- What title is given to the fund that functions as the general fund of the reporting entity? Statement of government activities.
- Does the report state the basis of accounting used for the general fund? The basis of accounting adopted is the budgets reporting and budgetary basis of accounting.
- What types of assets are included on the governmental funds balance sheet? The assets are cash and investments, cash with fiscal agents, receivables inventory at cost prepaid items.
- Do current and noncurrent assets appear on the balance sheet? They are both incorporated in the balance sheet.
- Do current and noncurrent liabilities appear on the balance sheet? They are both incorporated in the balance sheet.
- Is this reporting consistent with the basis of accounting being followed? Since this falls in the category of the financial statements that was qualified by the auditor as the following the accounting principles generally accepted in the United States then the balance sheet is consistent with the basis of accounting.
Other governmental fund types
- List the names of governmental funds other than the general fund that are included as major funds in the fund financial statements. Identify which of the major funds, if applicable, are special revenue funds, debt service funds, capital projects funds, and permanent funds. They include highway user revenue city road tax and grants special revenue funds are the grants funds, debt service fund include the highway user revenue fund while city road tax is a form of permanent fund.
Proprietary funds
- List the names of the proprietary fund types included in the financial statements. Statement of net assets, statement of revenues, expenses and changes in fund net assets and statement of cash flows.
- Do the financial statements provide evidence that all proprietary funds use accrual accounting? There is an aspect of accrual accounting as depicted in the financial statements by prepaid expenses and accrued interest payable.
Fiduciary funds
- List the name of the fiduciary funds included in the fund financial statements. Fiduciary funds are fund held in trust by the government for the benefit of individuals or certain entities, in this report they include, pension plan that covers employees of city and pension pal for public safety personnel who are exposed to hazardous environment.
- Identify whether each of these is an agency fund, investment trust fund, pension fund (and other employee benefit) trust fund, or private-purpose trust fund. Both are forms of employee benefits funds due to their service to the city.
- Do the financial statements provide evidence as to what basis of accounting these funds use? The pension pal for city employees employs the Arizona state retirement system while pension pal for public safety personnel employees the public safety personnel retirement system.
Notes to the financial statements
- What significant accounting policies are discussed in the first note? The generally accepted accounting principles (GAAP) and governmental accounting standards board (GASB) they are well detailed on page 69.
- Does the note describe the entities that are included as component units? It describes the entities included in the components units which are, Yuma municipal property corporation and city of Yuma employee benefits trust.
- Does it list entities that are not considered component units? It does not highlight the entities not considered as component units.
- Are there any notes that disclose (1) any material violations of legal provisions, (2) deficit fund balances or net position, or (3) significant commitments or contingencies? As stated in the auditor’s report the city had followed the generally accepted accounting principle in the United States and for such there is no any material violation of legal violations, deficit fund balances or net position or significant commitments or contingencies.
Statement of activities at the government-wide level
- Has the government prepared statements in compliance with the GASB financial reporting model? According to note 1 the statements have incorporated the governmental accounting standards board (GASB).
- Does the statement of activities appear on one page or two pages? It appears on one page i.e page 21.
- What is the most costly governmental function or program operated by the government? The water program is the costly of all programs.
- How much of the cost of governmental activities was borne by taxpayers in the form of general revenues? This include the property taxes, sales taxes, franchise taxes which amount to $ ( 10.1 + 36.3 + 3.1) = $49.5 million.
- Did the entity increase or decrease its governmental activities unrestricted net position this year? It decreased by $6 million.
- Did the entity increase or decrease its business-type activities unrestricted net position this year? The position remained unchanged at $0.1 million.
Statement of revenue, expenditures, and changes in fund balance for governmental funds
Revenues
- What system of classification of revenue is used in the governmental fund financial statements? It adopts the system of accounting for only the earned and received revenues
- List the three most important sources of general fund revenues and most important sources of revenue for each major governmental fund. For the general fund revenues right from the highest contributor one we have taxes, intergovernmental revenues, and charges for services. For the other sources of revenues the important sources are, for highway user revenue, intergovernmental revenue. For city road tax, taxes while for grants it is intergovernmental revenues.
- Does the reporting entity depend on any single source for as much as one-third of its general fund revenues? The only source that accounts for more than one third of the entities revenue is the taxes.
- What proportion of revenues is derived from property taxes? 0.5744 is derived from property taxes.
- Do the notes clearly indicate recognition criteria for primary revenue sources? The primary revenue sources are recognized once the cash from such sources is measurable and collectible within the required time otherwise it’s recorded as deferred revenue.
- Are the charts, graphs, or tables included in the statistical section of the CAFR that show the changes over time in reliance on each revenue sources? The charts are in coherence with the each of the revenue sources as they are prepared from the same available data infarct they are graphical representation of the figures in the financial statements.
Expenditures
- What system of classification of expenditures is used in the governmental fund financial statements? They accrual system of classification is used whereby expenditure are recognized when incurred not when they are actually paid.
- List the three largest categories of general fund expenditures; list the largest category of expenditures of each major governmental fund. Largest category of general fund expenditures is the public safety while for the rest are, highway user revenue, streets, city road tax, streets and grants, public safety.
- Are charts, graphs, or tables presented in the statistical section of the CAFR to show the trend of general fund expenditures, by category, for a period of 10 years? They are actually showing expenditure by category indicating the expenses of each under the period of comparison.
- Is expenditure data related to nonfinancial measures such as population of the government or workload statistics? There is a significant relationship between expenditure and non financial measures such as population since an increase in population will cause an increase in demand of amenities offered by government and thus causing an increase in government expenditure as the government comes in to provide such amenities for instance water.
Other financial sources
- Are other financing sources and uses reported in a separate section of the statement of revenues, expenditures, and changes in fund balances, below the revenue and expenditures sections? Other financing sources are transfers in and expenditure which have been referred to as transfers out.
- Do the line items indicate the nature of each financing sources or use? They don’t state the actual source as well as uses as both the sources and uses are referred to as transfer in and out respectively.
Budgetary comparison schedule or statement
- Does the government present budgetary comparisons as a basic governmental fund financial statement, or as required supplementary information (RSI) immediately following the notes to the financial statements? Comparison is as required by supplementary information and not otherwise.
- Is the budgetary comparison title a schedule rather than a statement? As stated in the report the budgetary comparison is as required supplementary information this is well mentioned on page 36
- Does the budgetary comparison present the original budget and the final amended budget? The budgetary comparison presents both the original budget and the final amended budgets as supplementary budgets are not allowed.
- Does the budgetary schedule present actual data using the budgetary basis of accounting? The budgetary schedule contains estimated values of expenditures and the means of financing them.
- Has the government presented one or more variance columns? The variance column has been presented to show the difference between the values in the original budget and final budget for each variable as proposed by the budget committee.
- Does the CAFR indicate that budgetary reporting practices differ from GAAP reporting practices? If so, does it explain how the practices differ? There is a significant difference as budgetary information schedules is in a manner similar to its adopted budget therefore the information is outside its basic financial statements which were prepared following the generally accepted accounting principles.
Governmental activities, government-wide level
- Are governmental activities reported in a separate column from business-type activities in the two government-wide financial statements? The activities under each category are listed in different columns with each activity’s value being indicated independently.
- Are assets and liabilities reported either in the relative order of their liquidity or on a classified basis on the statement of net position? Assets and liabilities are listed in order of their decreasing liquidity i.e. from those which can easily be realized in cash.
- Is information on expenses for governmental activities presented at least at the functional level of detail? The information on expenses for governmental activities is presented at functional level as they are stated in their general format which gives a satisfactory guide as the cause of such expenditure.
- Are program revenues segregated in to (a) charges for services, (b) operating grants and contributions, and (c) capital grants and contributions on the statement of activities? Yes, the programs revenues are clearly segregated following the category mentioned in this question.
General fund
- What statements and schedules pertaining to the general fund are presented? Statements pertaining revenues from each category is well presented as well as information related to the expenditure.moreso cash at beginning and cash at the end and at the end being well stated. The schedules are revenue sources as well as expenditures and the net revenues after writing off expenses from the excess of the revenues, other sources of revenue are also mentioned.
- In what respects (heading, arrangements, items included, etc.) Do they seem similar to the year-end statements illustrated or described in the text? All seem to be increasing over the period discussed.,
- In what respects do they differ? They differ in what is present as well as the stated monetary value of each variable
- What purpose is each statement and schedule intended to serve? Each category facilitate s easy interpretation of ech parameter on the financial status of city
- How well. In your reasoned opinion, does each statement and schedule accomplish its intended
Each schedules assist in progressive analysis of the statements as well as what variables are causing the monetary totals of each category of the financial statement.
Each schedule assists the reader of the report to see the impact of each parameter on the financial statement.
- Are any noncurrents or non liquid assets included in the general fund balance sheet? If so, are they offset by equal amounts classified as “nonspendable” fund balances? Non current assets are incorporated in the balance sheet, there is no statement showing that they are offset by an equal amount classified as non spendable.
- Are any noncurrent liabilities included in the general fund balance sheet? If so, describe item. Non current liabilities are included in the balance sheet they are the accounts payables and accrued payroll, taxes and benefits payable.
- Are revenue classification sufficiently detailed to be meaningful? Revenue classification is sufficiently detailed and thus meaningful as all the sources of revenues are well indicated independently and in real monetary values.
- Has the government refrained from reporting expenses rather then expenditures? The government has not refrained from reporting expenses rather than expenditures as expenses are well stated in the statement of revenues, expenditures and changes in fund balances governmental funds.
Special revenue funds
- What statements and schedule pertaining to the special revenue funds are presented? The statements include the local transportation assistance special revenue fund, public safety tax special fund, radio communication special revenue fund, recreation complex special fund two percent tax special revenue fund and Yuma mail maintenance special revenue fund.
- Are these only combining statements, or are there also statements for individual special revenue funds? They are statements for individual special revenue fund.
- Are expenditures classified by character (i.e. current, intergovernmental, capital outlay, and debt service)? The expenditures are classified by character as stated in the question.
- Are current expenditures further categorized at least by function? Yes they are further categorized by at least by function this case can be verified from page 79 of the CAFR.
REFERENCE:
