For this assessment, you will act as the comptroller for an imaginary Caroline County. The current county board of supervisors is mostly new, so they will need a lot of guidance. One board member has requested an explanation for the two sets of financial reports used in government accounting. The board will also need recommendations on whether to approach the budget using an authoritative or participative approach. The most important item will be setting an appropriate tax rate for next year that takes into account the possible purchase of 6 new school busses, but the board has also requested a cost-variance analysis to explain food overages incurred during a recent bicentennial celebration at the county seat in Clarksville.

For this assessment, your comptroller tasks will include preparing and submitting four different documents:

Document 1: Tax Rate Proposal and Budget (12 pages, not counting support documents and associated schedules)

In preparation for the annual meeting with the county board of supervisors, you will present a tax rate proposal and associated budget. To do so, you will need to:

• Analyze revenues and expenditures for Caroline County.
• Present a tax rate for the coming year that will balance revenues and expenditures in Caroline County.
• Create a budget based on the estimated tax rate.

Data relevant to your proposal and budget:

• Last year's tax rate of 1.25% of assessed value of real estate was based on a budget requiring spending of $10,000,000 total from all sources.
  • One-fourth of that came from taxes on real estate.
  • The total assessed value of the property in the county was $200,000,000.
• Since the last tax rate was set:
  • The county's property has been appraised at an overall increase of 2 percent. This does not include the real estate of 15 new business at a total of $4,000,000 in assessed value or the addition of a new housing development adding a total of $10,000,000 in assessed value.
  • New regulations from the state will add $500,000 to the amount needed by county schools. The state will not pay for any of this $500,000.
• The county would like to know the feasibility of purchasing 6 new school buses costing $200,000 USD each.

When preparing this tax rate proposal and budget (12 pages) for submission to the supervisors, include all relevant supporting documents and other information, such as:

• Estimated assessed value of all property in the county.
• Forecasted additions to the county surplus if the supervisors adopt your recommendation.

Document 2: Participative versus Authoritative Budget Recommendation (12 pages)

The county board of supervisors is currently debating whether the heads of the county departments should have more input into the budget preparation process than they have had in previous years. In other words, the board is debating whether to move to a more participative budgeting process. Write a report (12 pages) for presentation at the next board meeting that discusses the difference between a participative budget and an authoritative budget. Include the advantages and disadvantages of each.

Document 3: Government Financial Reporting Explanation (2 pages)

One of the newly elected members of the county board of supervisors is looking at last year's Comprehensive Annual Financial Report and has noticed that it appears to contain two sets of financial reports instead of the one that he is used to seeing for business enterprises. He has asked you to explain this to him. Write an email (2 pages) that discusses the two sets of financial reports, including their names, their contents, and the reason that there are two sets.

Document 4: Cost-Variance Analysis (1 page)

A party was held to celebrate the bicentennial of Clarksville, the county seat of Caroline County. Six-hundred attendees were estimated, but 700 arrived. The food and entertainment budget was $6,000, but the actual costs were $7,500. The overall spending variance was $1,500 ($7,500 - $6,000 = $1,500). Using flexible budgeting techniques and variance analysis, write a report (1 page) that explains how this $1,500 overall variance is divided into a cost variance and a volume variance. Include your calculations and conclusions to present at the next board meeting.