Explain the nature of financial risk in the public sector and identify, evaluate and recommend appropriate financial risk mitigation strategies, including those relating to public borrowing and financial market risks. OUESTION TWO (20 Marks) Describe the budgetary framework, budget cycle and budget processes, including the nature of performance measures, target setting, budget monitoring, budget feedback and control OUESTION THREE (20 Marks) Evaluate the PFM system using the Public Expenditure and Financial Accountability (PEFA) framework OUESTION FOUR (20 Marks) Describe the nature of public sector capital projects including the approval process, performance measures, and target setting, paying particular attention to public/private Dartnerships A summary of the general fund transactions for the city of Wautoma for the year ended December 31, 2020 is as follows: a. A budget was approved, showing estimated revenues of $900,000, appropriations of $875,000, transfers-in of $27,000 from other funds, and required transfers of $20,000 to other funds. b. The reserve for encumbrance at the end of 2019 was $15,000. Amounts encumbered in the prior period are included in appropriations for 2020. c. Property taxes for $650,000 were levied. In past years, 1% of the property taxes levied proved uncollectible. d. Encumbrances for $250,000 had not been liquidated by the end of 2012 . invoices for all these items received in 2020 and totaled $24,000. e. Collections from property taxes totaled $644,000 of which $20,000 represented collections on delinquent taxes. Delinquent taxes of $8,000 remain uncollected, on which a $3,000 allowance is carried. Remaining taxes receivable - current and taxes receivable - delinquent were converted into taxes receivable - delinquent and tax liens receivable, respectively. f. Purchase orders totaling $700,000 were issue. Subsequently, invoices were received amounting to $685,000 for items estimated to cost $680,000. included were supplies for $10,000. g. An ending inventory of supplies amounted to $2,000 for which the fund balance should be reserved. h. A tract of land was purchased for $250,000. Payment was made from the general fund. in whose appropriations the item had been included. The amount had not been encumbered. The purchase was made with the intent of reselling the land to a suitable developer. i. Wautoma received $300,000 as its part of federal revenue sharing programs. Grants-inaid of $60,000 due from the state governments are recorded. None of the grants is expenditure driven. j. Required transfers of $20,000 are made to other funds. k. A $50,000 payment is made on a mortgage payable. The payment includes $21,000 of interest and a principal payment of $29,000. 1. An offer was received from a land developer who will pay $380,000 for the land acquired by the city in item (h). the sale is approved. The developer remits $100,0000 with a note due in 90 days, bearing 8% interest. Any gain is to be considered revenue. m. Transfers received from other funds amount to $23,000. n. The developer in item (1) remits payments for the note plus interest. REOUIRE 1. Prepare journal entries of record the general fund transactions 2. Prepare closing entries for the general fund
