Question
1. Business Type Activities In government we have enterprise funds and internal service funds. Both of these are used for business type activities and have
1. Business Type Activities
In government we have enterprise funds and internal service funds. Both of these are used for business type activities and have different accounting rules (more FASB v GASB/accrual v cash/modified cash).
Discuss here activities that you think should be business type activities and why. Try to challenge each other by looking at how some might argue that the business activities are governmental activities - and why.
2. Other Post Employee Benefits (OPEB)
Other Post Employee Benefits (OPEB) is one of the major perks provided to retired employees.
Review your text, suggested readings from this unit along with your research. Discuss some of the issues that GASB and Governments have to contend with in relation to this issue. Propose alternatives and solutions based on your readings and research.
3. Self-Insurance
Does self-insurance really mean NO insurance? Let's discuss the concept of self-insurance here in more depth.
4. Internal Service Fund Decision Making
Using the information in the scenario presented below, what problems can you see with making these decisions? Spend time here discussing some of the issues related to internal service funds.
A city accounts for a vehicle repair service in an internal service fund and bills departments at full cost. The departments fixed costs are $80,000 per month; its variable costs are $40 per hour. On average it provides 4,000 hours of service per month.
- Fixed costs: $ 80,000
- Variable costs: 160,000 (4,000 x $40)
- Total cost: 240,000
- No. of hours: 4,000
- Cost per hour: 60
The police department determines that it is economically justifiable to repair a car if it can be fixed for $3,000 or less. The repair service estimates that the job will take 60 hours.
In responding to your peers, challenge their viewpoint and discuss any similarities or differences.
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