Assignment 1: Financial Statement / Audit Report Dawna Berry ACC410 Government and Not-For-Profit Professor Dr. M.

Austin Zekeri January 27, 2013

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1. Analyze the method of accounting used for the general fund and all other funds in existence by the government. Evaluate the reasoning for the use of the method of accounting for each of the funds as required by GAASB. The government-wide financial statements can be found following this section of the report for the Atlanta, Georgia County. A Fund financial statement is a combination of related accounts that is used to maintain direct control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to make sure and demonstrate compliance with finance-related legal requirements. All of the City funds can be divided into three groups: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for basically the same functions reported on the governmental activities in the government-wide financial statements. Unlike the governmentwide financial statements, governmental fund financial statements center on the near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be helpful in evaluating the governments near-term financing requirements. The focus of the Citys governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in calculating the Citys financing requirements. In particular, the unassigned fund balance may serve as a functional measure of a governments net resources available for spending at the end of each fiscal year. The City of Atlanta maintains two different types of proprietary funds. Enterprise funds which are also nonmajor proprietary funds and they are used to report the similar functions presented as
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business-type activities in the government-wide financial statements. The City uses enterprise funds to report for the business-type activities of the Hartsfield-Jackson Atlanta International Airport, Water and Wastewater System, Parks and Recreational Facilities, Solid Waste Services, Underground Atlanta, Parking Deck and the Civic Center. An internal service fund is an accounting device used to accrue and allocate costs internally among the Citys various functions. The City uses internal service funds to report for the maintenance and operation of its fleet of vehicles and its group insurance fund for employees and retirees. These services benefit both governmental and business-type functions, the net assets and change in net assets has to be paid between governmental activities and business type activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements. The proprietary fund financial statements offer separate information for the Department of Aviation, and the Department of Watershed Management, which are well considered to be major funds of the City. Conversely, both internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in the report. The proprietary funds financial statements follow the governmental funds statements. Proprietary funds provide the same type of information as business-type activities in the government-wide financial statements, but in more detail. Factors concerning the finances of these funds were previously addressed in the discussion of the Citys business-type activities. Fiduciary funds that are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement
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because the resources of those funds are not offered to support the Citys own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The fiduciary funds financial statements follow the proprietary funds statements. 2. Assess the application and compliance of GASB Statement 34, Basic Financial Statements and Management Decisions and Analysis for State and Local Governments to each of the funds. If this questions is asking whether or not the Basic Financial Statements and Management Decisions and Analysis for State and Local Governments to each of the funds are the same or if they are complying with GASB Statement 34 the answer would be yes. Anything else it is asking I have no idea what the question is. 3. Evaluate managements discussion and analysis (MD&A). In your evaluation, analyze the significant information in the MD&A and how the information contributed to the clarity of the financial statements. From your analysis of financial statements, identify and analyze information that should be included in the statements. I saw nothing wrong with the MD&A statement. I understood what it meant and what they were trying to convey in their statement. If I wanted anything else in this statement I would say nothing needs to change unless you want the whole financial statement added but then you can look at it from the whole report if it is necessary. 4. Determine whether the entitys financial position improved or deteriorated during the reporting period. Speculate on the causes from your review of the financial statements.

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It seems what you are asking is whether or not the money they get from wherever went up or down determining if they get more money for the following year and the answer is yes it has increased. The causes are in all areas of what I viewed from the financial records. It seems to me that if you raise the cost in one department and a few in others then it wont look too conspicuous to anyone else who looks at the financial records that way the city or county gets the money they are asking for when it could be to just line their own pockets with the money.

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References: Summary of Statement No. 34; Basic Financial Statementsand Management's Discussion and Analysisfor State and Local Governments (Issued 6/99); retrieved 1-27-12 at http://www.gasb.org/st/summary/gstsm34.html Atlanta, Ga.; Governments, Departments, Finance, Budget & Fiscal Policy; May 2012; retrieved 1-27-12 at http://www.atlantaga.gov/index.aspx?page=790

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