(link for the financial statement listed below) Analysis of reserves. (1) Are th
ID: 384949 • Letter: #
Question
(link for the financial statement listed below)
Analysis of reserves. (1) Are the levels of financial reserves (i.e., spendable fund balances, contingency funds, and unrestricted net position) adequate to meet unforeseen operational requirements or catastrophic events? (2) Do total governmental fund revenues exceed total governmental fund expenditures? Do General Fund revenues exceed General Fund expenditures? What has been the trend in the ratio of revenues to expenditures? (3) Is an adequate amount of cash and securities on hand, or could the city borrow quickly to cover short-term obligations?
financial statement 2016
http://www.usvifinance.info/html/Financial-Statements/USVI%20Financial%20Statements%20FY16.pdf
financial statement 2015
http://www.usvipfa.com/PDF/FINAL%20Government%20of%20the%20VI%20FS%20-%20September%2030%202015%20(S).pdf
Management's Discussion and Analysis On December 15, 2015, PFA issued the Series 2015 Grant Anticipation Revenue Bonds (the 2015 Bonds) in the amount of $89.9 million. The limited special obligation bonds are secured by a lien and security interest on Federal Highway Administration (FHA) grant revenues. The 2015 Bonds were issued to: (i) finance the costs of certain highway projects, (i) establish debt service reserves, and (iii) to finance the costs of issuing the 2015 Bonds. The Government and FHA entered into a Memorandum of Understanding on December 9, 2015, to document the procedures, rules, and responsibilities of the Government to supervise the capital projects and to manage debt service payments. The 2015 Bonds mature from 2016 to 2033, at interest rates ranging from 3.0% to 5.0%. Interest is payable on March 1 and September 1 annually, and principal is payable on September 1 annually Financial Analysis of the Primary Government Total assets and deferred outflows of resources of the Government as of September 30, 2016 and 2015 were approximately $2.8 billion and $2.1 billion, respectfully. Total liabilities and deferred inflows were approximately $6.5 billion and $5.8 billion, as of September 30, 2016 and 2015 As of September 30, 2016, the Government's net position was a deficit of $3.7 billion consisting of S349.0 million invested in capital assets, net of related debt; $265.0 million restricted by statute or other legal requirements that were not available to finance day-to-day operations; and an unrestricted net deficit of $4.4 billion. As of September 30, 2015, the Government's net deficit of S3.7 billion consisted of $264.0 million invested in capital assets, net of related debt; $251.0 million restricted by statute or other legal requirements that were not available to finance day-to-day operations; and an unrestricted net deficit of $4.2 billion. For the fiscal year ended September 30, 2016, the Government earned program and general revenue amounting to $1.6 billion and reported expenses of $1.6 billion, resulting in a decrease in net deficit of approximately $2.9 million. For the fiscal year ended September 30, 2015, the primary government earned program and general revenue amounting to $1.2 billion and reported expenses of $1.4 billion, resulting in an increase in net deficit of approximately $248.0 million Overall, revenue increased in fiscal 2016 by approximately $434.0 million, when compared to fiscal 2015, mainly due to gains recognized due to the operating agreement with Limetree amounting to S283.8 million, increases in operating grants of $60 million, increases in tax revenues of $76.0 million, increases in interest and other of $7.0 million, increase in contribution of $1.1 million, and increases in charges for services of $6.0 million. Overall expenses increased in fiscal 2016 by $180.0 million when compared to fiscal 2015, mainly due to increases in unfunded pension expense of S204.0 million, offset by a decrease in general government expense of $17.0 million, and a decrease in business-type expense of S7.0 million.Explanation / Answer
1. The fund balance is adequate for unforeseen operational requirements but contingency funds and unrestricted net position are not adequate.
2. Yes, the revenue is more than expenditure.
Yes, it increases general fund revenue with (0.5-0.6)% of the expenditure.
Trend analyses are calculated as the base year by the profit and sale ratio undertaken for a period of more than 4years.
3. The city is required to borrow the cash to cover up the shortfall and to enhance the cash and security on hand.
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