Analysis of Cary, North Carolina's Annual Comprehensive Financial Report
Overview
The Governmental Accounting Standards Board (GASB) has established accountability as the cornerstone of financial reporting for governments. Accountability, as defined by GASB, includes budgetary and fiscal compliance. In this assignment, you will explore a local government's Annual Comprehensive Financial Report (ACFR) for the elements of the ACFR and how those elements are incorporated by a local government.
Your professor will assign a local government ACFR for use in this assignment.
Instructions
Write a 3–5 page paper in which you address the following:
Analyze the local government ACFR for the types of budgets the local government maintains. Provide at least three different budget types maintained by the local government and an example of what each controls.
Analyze the Management Discussion and Analysis for at least three assertions made by management as to their budgetary and fiscal compliance. Provide an example of each of the three assertions you analyzed.
Analyze the Budget-to-Actual reports in the local government ACFR for at least three indications of budgetary and fiscal compliance, such as significant or non-significant variances. Provide the implication for the local government of each of the three indications.
Analyze the local government ACFR for at least three local government finance-related legal or contractual requirements. Provide an example of each of the three requirements.
Use at least three quality sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment. For help with research, writing, and citation, access the library or review library guides.
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
The Annual Comprehensive Financial Report (ACFR) of a local government provides an overview of the financial health, budgetary compliance, and fiscal management of that entity based in the Governmental Accounting Standards Board (GASB). The latest CAFR of Cary, North Carolina covers the financial Year 2020. In this paper, Cary’s ACFR is analyzed with regards to its elements and how they are approached by the town’s managements within the context of GASB.
Budget Types in the ACFR
The North Carolina General Statutes dictates that Cary must adopt annual budgets. All budgets should be prepared using modified accrual basis of accounting, with the expenditures required to be maintained at a functional level below annual appropriation. Three types of budgets in ACFR are the general fund budget, capital project funds budget, and the utility system enterprise fund budget. the General Fund Budget is a vital aspect of Cary, North Carolina's financial management, as it helps the town allocate its resources effectively, maintain a balanced budget, and provide essential services to its residents. The general fund covers general governmental functions such as public safety, public works, and community development. For example, it controls expenditures for police and fire departments.
Second, the Capital Project Fund Budget is an essential component of Cary's Annual Comprehensive Financial Report (ACFR). This fund is dedicated to accounting for the financial resources used to acquire, construct, or improve major capital assets, such as transportation infrastructure, parks and recreation facilities, and public buildings. The Capital Project Fund Budget plays a crucial role in ensuring that the town efficiently manages its resources and investments in capital projects, aligning them with its long-term strategic goals and community needs. It provides transparency and accountability in the town's management of its capital investments.
Third, the company has the budget for the utility system enterprise fund. The fund is dedicated to accounting for the town's utility services, which include water, wastewater, and reclaimed water systems. As an enterprise fund, the Utility System Enterprise Fund operates similarly to a private business, with the goal of recovering the costs of providing utility services through user fees and charges. The fund combines water project fund, sewer project fund, utility systems operations fund, and the utility system capital reserve fund.
Management Discussion and Analysis Assertions
There are three assertions that the management makes the ACFR. The manageme...
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