Question

Criteria

What Requirement is Asking---

1a. Compare and contrast the Comprehensive Annual Financial Report (CAFR) of the Winston-Salem, NC with the report from the Week 1 homework (Cary, NC) In your comparison, include the publication method of the CAFR.

Weight: 5%
This question is asking you for the publication method (that is, how is it published) for the town of Winston-Salem, NC compared to the town of Cary, NC.

What is the method/methods?

Are they the same for both or how are they different?

5.5 points

1b. Compare and contrast the Comprehensive Annual Financial Report (CAFR) of Winston-Salem, NC with the report from the Week 1 homework (Cary, NC). In your comparison, include audit and budget information in the CAFR.
Weight: 5%
The question is asking for the audit and budget information for the town of Winston-Salem, NC compared to Cary, NC. Examples---

How do their budgets compare?

What type of budgets? Object, performance, etc.?

How do their budget variances compare?

Were they both audited by public accounting firms?

5.5 points

1c. Compare and contrast the Comprehensive Annual Financial Report (CAFR) of Winston-Salem with the report from the Week 1 homework. (Cary, NC) In your comparison, include the type of audit report issued.
Weight: 5%
This question is asking what type of audit report was issued for Winston-Salem, NC and what type of audit report was issued for Cary, NC.

5.5 points

1d. Compare and contrast the Comprehensive Annual Financial Report (CAFR) of Winston- Salem, NC with the report from the Week 1 homework. (Cary, NC) In your comparison, include the existence or nonexistence of an internal audit function within the government entity.
Weight: 5%
This question is asking if the town of Winston-Salem, NC has an internal audit function and if the town of Cary, NC has an internal audit function. Note: an internal audit function is not the same as internal controls.

5.5 points

2. Prepare the analysis for Winston-Salem, including information on the introduction, financial section, and statistical section prepared in the CAFR from Chapter 2.
Weight: 20%
This question is asking you to answer all the questions for the Chapter 2 Continuing problem for the town of Winston-Salem, NC. Those questions are found on pages 82-83 of the textbook.

22 points

3. Analyze the methods used by Winston-Salem, NC in comparing the budget-to-actual reports. Your analysis should include an evaluation of the basis of accounting used for the budget and financial statements.
Weight: 20%
This question has two parts. First you are to analyze the methods used to prepare the budget to actuals – For example,

Which financial statements do they present these comparisons for?

Do they compare to original budget or year-end amended budget?

Are the variances positive or negative?

What does this indicate for the town of Winston-Salem?

22 points

4a. Analyze the sources of revenue for Winston-Salem. Your analysis should include information on both governmental and business-type activities of the government. In your report, be sure to examine property taxes and how they are accounted for.
Weight: 5%
Question is asking for the sources of revenue for Winston-Salem, NC for both governmental activities and business-type activities. It is the first of six questions about sources of revenue. This one is about property taxes and how they are accounted for. For example,

What percentage of revenues are from property taxes?

Property tax rate statistics – rate, per capita, etc.

Are they accounted for on the cash basis, modified accrual basis, or accrual basis? Explain what that means for Winston-Salem.

5.5 points

4b. Analyze the sources of revenue for the selected local government. Your analysis should include information on both governmental and business-type activities of the government. In your report, be sure to examine other sources identified as primary revenue for the entity.
Weight: 5%
This is the second question about sources of revenue for Winston-Salem, NC for both governmental and business-type activities. It is asking you to identify other sources of revenue (other than property taxes) for Winston-Salem and to determine if any of these sources are primary revenue sources for Winston-Salem.

5.5 points

4c. Analyze the sources of revenue for Winston-Salem. Your analysis should include information on both governmental and business-type activities of the government. In your report, be sure to examine deferred revenue.
Weight: 5%
This the third question and it ask you about deferred revenue. Does Winston-Salem have any? If so, what is it from? This analysis should include both governmental activities and business-type activities. How does the financial statement reader know about it?

5.5 points

4d. Analyze the sources of revenue for Winston-Salem. Your analysis should include information on both governmental and business-type activities of the government. In your report, be sure to examine year-to-year variations in the tax levels of income.
Weight: 5%
This is the fourth question and it ask you to examine the year-to-year variations in the tax levels of income. Hint: You can find this information in the statistical section.

5.5 points

4e. Analyze the sources of revenue for Winston-Salem, NC. Your analysis should include information on both governmental and business-type activities of the government. In your report, be sure to examine various management discussion and analysis items of note.
Weight: 5%
This is the fifth question and it asks you for the information provided in the management discussion and analysis about the sources of revenue (for both governmental and business-type activities) for the town of Winston-Salem, NC.

5.5 points

4f. Analyze the sources of revenue for Winston-Salem. Your analysis should include information on both governmental and business-type activities of the government. In your report, be sure to examine information about the general fund.
Weight: 5%
This is the sixth question and it ask you for information about the general fund. Remember, these questions are talking about the sources of revenue for Winston-Salem, NC. For example,

What are the sources of revenue for the General Fund?

How much (percentage) comes from property taxes? Sales taxes? Etc.

5.5 points

5. Clarity, writing mechanics, and formatting requirements.
Weight: 10%
Run your paper through a grammar checker, like Grammarly to correct spelling errors, typos and grammatical errors.

11 points

Assignment 1 Requirements Explained.pdf

please,I need it soon,if you have question please let me know ,thank you for your respond.

Answer 1

Solution

1 a - 5)

As an investor in local government debt instruments, you might often hear the term ‘CAFR’ and its importance in maintaining financial transparency for local governments for financial markets and their investors. As the name suggests, a Comprehensive Annual Financial Report (CAFR) is a set of financial reports produced by local governments, states and other entities to comply with the reporting rules set by Government Accounting Standards Board (GASB). GASB also serves as the oversight board to ensure compliance and communicate any new updates or changes to reporting methods. In addition, an independent auditor audits the CAFR using GASB standards prior to their publication. The local and state governments produce many comprehensive documents and reports; however, the CAFR and the entity’s budget book are typically considered two of the most important documents. Where the budget is a forward-looking document that plans for the future fiscal year and shows how the revenues will be allocated, the CAFR shows the actual numbers of financial activities for the previous fiscal year.

As mentioned above, a CAFR is a set of financial statements that presents a wide variety of information needed for readers to understand the true financial picture of a local government’s finances and how they compared to the financial data (both revenue and expenditures) projected in the budget book. There are three main section in a CAFR book: introduction, financial section and statistical section.

The introduction section primarily guides a reader through the report with a table of contents for various sections and often includes a transmittal letter from the entity executive. The transmittal letter is one of the legal requirements for the CAFR that typically includes the local government’s profile, provides an economic update on the local economy, lists any major initiatives undertaken by the local government and states that financial reports are management’s responsibility.

After the introduction, the CAFR’s second and more detailed/comprehensive section is its financial section that includes all financial reports, narratives explaining the financial information and an auditor’s report. An auditor’s report is typically the first item in the financial section that renders the auditor’s opinion on the financial reporting and presentment. This is followed by the financial statements (both government-wide financial statements and fund financial statements); this information includes narratives written by various departments throughout the local government, explaining the data presented in the financial reports.

The third section is the statistical section, and is also crucial as it outlines financial trends, revenue capacity, debt capacity, demographic information and other operating information about the local government.

• It contains trend information to help the reader understand how the local government’s financial performance and fiscal health have changed over time.

• Revenue Capacity schedules contain information to help the reader assess the local government’s most significant revenue sources: property tax, retail sales tax, business and occupation tax, etc.

• Debt Capacity schedules present information to help the reader assess the affordability of the local government’s current levels of outstanding debt, and the state’s ability to issue additional debt in the future.

• Demographic schedules offer demographic and economic indicators to help the reader understand the environment in which the local government’s financial activities take place.

• Operating Information schedules offer operating data to help the reader understand how the information in the local government’s financial report relates to the services it provides and the activities it performs.

The CAFR provides a wide variety of information that’s quite comprehensive in nature for its readers.Hence, generally speaking, a reader can go through the financial section of the CAFR and find the ‘high points’ by reading through the Management Discussion and Analysis (MD&A). This section describes the previous year’s results and key factors influencing them; shows the local government’s current financial condition; and provides an overview of likely future prospects.

For investors who are either prospective buyers of local government debt instruments or currently hold these securities, all information provided in the CAFR can be pertinent depending on your issue and the revenue sources backing your debt.

In addition to the debt capacity, it’s also important to review the legal debt margin, which is the difference between the amount of debt, or debt service, the government is authorized to carry and the amount of debt or debt service the government is actually carrying. It indicates how much room the government has for additional debt before it reaches its legal limit. Furthermore, investors in local government instruments must also pay close attention to various debt ratios like Debt to Tax Collections, which looks at the tax revenue and debt service pledge against these revenues. Overall, debt ratios showcase the overall risk for the local government and its investors.

CAFR is one of the most important documents for any local or state government to establish financial transparency and establish credibility with its creditors and oversight agencies. As seen in the case of Manassas Park, VA, the inability to produce a CAFR in a timely manner can lead to rating suspensions or downgrades – which would totally limit a government’s ability to access capital markets to fund any future projects and can have serious negative impacts on outstanding debt. For any local government debt investors, CAFR is certainly a great place to start your research on the financial standing and actual revenue and expenditure numbers.