Fund Accounting The Government reports its financial position and results of ope
ID: 2602651 • Letter: F
Question
Fund Accounting The Government reports its financial position and results of operations in funds, which are considered separate accounting entities. The operations of each fund are accounted for within a set of self-balancing accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with legal, financial, and contractual provisions. GAAP, establishes criteria (percentage of the assets, liabilities, revenue, or expenditures/expenses of either fund category or the governmental and enterprise funds combined) for the determination of major funds. Indirect costs are automatically allocated and reported in the program expense for each fund. Non-major funds are combined in a single column in the fund financial statements. The Government reports the following major funds: (a) Governmental Funds The Government reports the following major governmental funds: General Fund - The general fund is the Government's primary operating fund. It accounts for al financial resources of the general government, except those required to be accounted for in another fund. . ervic The PFA debt service fund accounts for the resources accumulated, and payments made, for principal and interest on long-term general obligation debt issued by PFA on behalf of the Government. PFA Capital Proiects Fund The PFA capital projects fund accounts for bond proceeds of debt issued by the PFA on behalf of the Government. The bond proceeds have been designated for certain necessary public safety and capital development projects which are accounted for in this fund. . Federal Grants Fund The federal grants fund accounts for proceeds and payments that are restricted to expenditures for specified purposes. (b) Proprietary Funds These funds account for those activities for which the intent of management is to recover, primarily through user charges, the cost of providing goods or services to the general public. The Government reports the following major proprietary funds: . West Indian Company - wico, a blended component unit of PFA, accounts for the activities of a cruise ship pier and shopping mall complex on the island of St. Thomas. . UnemploymentInsurance Fund The unemployment insurance fund accounts for the collection of unemployment premiums from employers in the U.S. Virgin Islands, and the payment of unemployment benefits to eligible unemployed recipients.Explanation / Answer
As per the above report and after analyzing revenue and revenue sources, following is the conclusion from the given case:
(1)The City of Gainesville, FL U.S.A., according to the 2014 C.A.F.R., does not have flexible or stable revenue resources (p. 155). The City of Gainesville, FL U.S.A., according to the 2014 C.A.F.R., relies on only two sources, of: own-source revenues-that are: revenues and property taxes from Gainesville Regional Utilities (p. 155). If downturn in home sales is there, and/or, if for some reason homes are depreciated, as well as lose their property worth-for example, if home owners fail to properly care for their property, and neglect their homes, then property's re-sale will decrease, thus, downward of property taxes on the home. Further, many people are relocating externally of the immediate Gainesville, FL area, as, the value of utilities in Gainesville, FL, are too high. The City of Gainesville, FL U.S.A., requires further own-source income resources, to expand, the revenue base, for the City of Gainesville, FL.
(2) No, according to the City of Gainesville, FL, C.A.F.R. (2014), the City of Gainesville, FL, U.S.A., does not have a diversified revenue base. The City of Gainesville, FL U.S.A., contains two main resources of revenue, they are listed as: property tax, and Gainesville Regional Utility, utility revenues. Homes, in the City of Gainesville, FL U.S.A., are at a high rate, and are sometimes for sale, above market price -that raises the taxes of property, of the homes sold. Further, many people working in Gainesville, FL- even who work for the City of Gainesville, FL often live outside of the City of Gainesville, FL U.S.A.
(3) The city appears to rely on intergovernmental revenues, as per the information given, in the City of Gainesville, FL U.S.A., C.A.F.R., of 2014. The City of Gainesville, FL, U.S.A., spent a total of: $ 33, 666, 258 in State Financial Assistance and Federal Award. Then, an independent schedule, of the total expenditures being: $4,499,076. There are a various issues, with the information, given in the City of Gainesville, FL C.A.F.R. (2014), in regards to, the total amount, of: State Financial Assistance and Federal, which is listed.
(4) Information, appeared on page 5, of the City of Gainesville, FL U.S.A. C.A.F.R., of 2014, signify, that the City of Gainesville, FL U.S.A., is not getting enough in revenues, to recover its expenses. The information, on page 5, of the City of Gainesville, FL U.S.A., C.A.F.R., of 2014, states, that there is a budget deficit, after the expenses of city, are reduced, from the revenue of city, and then, for the City of Gainesville, FL U.S.A., to cover the deficit, that was produced by surplus expenses, money is shifted, from: “other financial sources”- containing debt financing, that is intended for other uses, to recover the budget deficit.
(5) Yes, the financial statement, on page 5, of the City of Gainesville, FL U.S.A., C.A.F.R., from 2014, needs an attention. As per the fact, that the revenues, do not recover the expenses, as well as, money is shifted out of an “other expenses fund,” to recover the budget deficit, I suspect, fraud in accounting, within the City of Gainesville,FL.
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