Assume you are a recent graduate of a Accounting program and have been hired for a budgeting/accounting position in the Director of Administration office for your home State Kansas. You are excited about this position for a variety of reasons. First, significant responsibility is associated with this position, and you will be a key individual in both the administration office and the mayors staff. Your specific responsibilities include working on the development of the States budget and financial statements, along with providing financial information to other members of the mayors office. Like many states in the United States, your home State has some financial challenges involving both sources of revenues and expenditures associated with state operations, including costs related to public safety (police and firefighters) and the education system.

It is your first week on the job and to orient you to your new position, your supervisor has given you the following assignment. In approaching this assignment, you want to do an excellent case analysis to make a favorable first impression.

REQUIREMENTS

Please use the 2020 Comprehensive Annual Financial Reports (CAFRs) of Kansas to answer the following case questions. ( Kansas is the state)

Part I: Basic information of the Comprehensive Annual Financial Report (CAFR)

1. Review the introductory section of the CAFR and provide the following information to the mayors office:

1. Was the entitys annual report of the previous year awarded a certificate of achievement for excellence in financial reporting by the Government Finance Officers Association? What is this award for?
2. What are the key issues addressed in the letter of transmittal?

2. Review the financial section and provide the following information to the mayors office:

a. Which, if any, independent audit firm performed an audit of the CAFR?

b. Did the entity receive an unqualified audit opinion? If not, why not?

3. Review the statistical section and provide the following information to the mayors office:

a. What is the population of the entity being reported on?

b. What types of information are included in the statistical section?

Part II: Preliminary Analysis of Kansas CAFR

1. Review Statement of Net Position. Find

• The total assets, total deferred outflow of resources, total liabilities, total deferred inflow of resources, total net position, unrestricted net position, and restricted net position.
• Is total the net position deficit or positive? Explain to the office what does a deficit/positive net position mean?

2. Review Statement of Activities of 2020. Calculate/find

• Total expense
• Total PG revenue, total CU Revenue, and General Revenue
• Change in Net Position
• Note: PG stands for Primary Government; CU stands for component unit

Part III: Additional Analysis of the CAFR

1. An article by Chancy, Mead and Schermann (2002) summarizes government-wide ratios to measure fiscal distress and related financial risk factors of municipalities. One ratio provides an overall measure of financial position for the government. A second ratio provides measures of financial performance. A third ratio provides a measure of liquidity. A fourth provides measure of solvency. These ratios in comparison to the ratios measured for similar governments, combined with other useful information, provide a starting point for evaluating the overall financial condition of a governmental entity. The definitions and measurements of these ratios and factors are listed in the following table.

Financial Ratios
Measure of:	Calculation:
Financial Position	Unrestricted Net Assets/Expenses
Financial Performance	Change in Net Assets/Total Net Assets
Liquidity	Cash + Current Investments+ Receivables/ Current liabilities
Solvency	Long-term Debt/Assets

Calculate the risk ratios for state, and answer:

1. What conclusions concerning the states financial position can be drawn from these ratios?
2. What conclusions concerning the states liquidity can be drawn from these ratios?
3. What conclusions concerning the states financial performance can be drawn from these ratios
4. What conclusions concerning the states solvency can be drawn from these ratios?