Hi,

I was wondering if you could please help me with my CAFR project,

I have been assigned the state of Virginia.

Please find the attached assignment.

Its Urgent please.

1 St. John's University The Peter J. Tobin College of Business Department of Accounting and Taxation ACC 639 Summer 2017 Governmental and Not-For-Profit Accounting Professor: Dr. Benjamin R. Silliman, C.P.A. Comprehensive Annual Financial Report (CAFR) Project Name: _____________________________________________________________ State Assigned: _____________ For this CAFR Project, you have been assigned one (1) state government in the United States. Download your state's Comprehensive Annual Financial Report (CAFR) for the most recent fiscal year (2016). The purpose of this project is to immerse you into a set of financial statements of a state so that you can see the various components that we have been studying and examining in this course. Please keep in mind, this project is partly a scavenger hunt; the other part is to interpret and provide in-depth responses to the questions. The results must be neatly presented and typed in Word, with each item numbered and labeled (i.e., 2b., 3a., etc.). Any project that is prepared with limited responses or not neatly presented will lose points. Project Due Date: June 29, 2017. Your completed project must be uploaded to Blackboard in the Assignment section as a single pdf document. If you must submit your assignment after the due date, please email the professor. Instructions: a. In answering each question, be sure to insert your responses directly below the indicated questions (do not merely number each question and put in a response). b. For each question where you are asked to locate or identify an item(s) in the CAFR, be sure to provide the exact page number(s) printed on the CAFR (not the PDF page numbers). c. Neatness in your write-up, clarity in your responses, and preciseness are very important in the grade determination. For example, if you are asked to provide dollar amounts, indicate: $2,575,325 (no cents or 2575325 as a response). d. If you cannot locate an element in the question, do not leave the question blank and do not write \"N/A\". For example, if the state you are examining does not recognize business-type activities, you would write, \"The (indicate state) 2016 CAFR does not separately recognize business-type activities and it is not reflected in the Statement of Activities or Statement of Net Position.\" You would also provide the page numbers to the two aforementioned financial statements. e. Do not attach any CAFR materials to your results. Your completed project must be submitted through Bb in the Assignment section. Projects sent to me via email will not be graded. Follow all project and presentation instructions carefully to maximize your point potential. Download the most recent (2016) state CAFR (not the state's pension CAFR) and use it to respond to the following items: 1. Identify the state you are examining and provide the exact URL of the web page from which you downloaded the CAFR (copy-and-paste the URL, do not type; then test the URL to be sure it opens correctly). What is the most recent fiscal year (and indicate the last date of the fiscal year)? Also 2 indicate the date the CAFR was published and the name of the Chief Executive Officer of the state (the governor). 2. In the Introductory Section, there is a Letter of Transmittal. Briefly explain in your own words the purpose of the Letter of Transmittal and identify and explain the following: a. What is the date on the letter? b. To whom is the Letter addressed? c. From whom is the Letter written (also identify the office on the letterhead where the letter was written)? d. What are some of the highlights that were mentioned for the most recent fiscal year? The highlights must be expressed in your own words. Do not copy and paste text from the CAFR. e. Was the state organizational government chart provided? Briefly explain how the state is organized (administration with agencies, legislative, and judiciary). f. Were there any component units? If so, how many? g. Does the Letter contain any discussion on the budget and appropriations? Briefly explain in a paragraph the state's budgetary policies (including appropriations). h. Who signed the letter? 3. In the state's Financial Section, there is an auditor's report. Briefly explain the purpose of the auditor's report and also identify and explain the following: a. What is the date on the letter? b. Given the last date of the fiscal year, exactly how many days had passed until the dated audit report letter? c. To whom is the auditor's report addressed? d. From whom is the auditor's report written (also identify the office on the letterhead where the report was written)? e. Was the audit performed by an independent audit firm? If not, what organization performed the audit? f. Usually in the second paragraph of the auditor's report, the phrase \"We conducted our audits in accordance with . . .\" What is the auditor referring to? g. Is there any place on the auditor's report that refers to Generally Accepted Accounting Principles? What paragraph is this and why is it included in that paragraph? h. In the Management's Discussion and Analysis (MD&A) section, there is a section that discusses the Government-wide Financial Analysis. Briefly explain in your own words some significant results that are highlighted on the Statement of Net Position and Statement of Activities that occurred during the current fiscal year. 3 i. On the Statement of Activities, what is the largest revenue source and largest expense source? How large? j. In the major governmental funds section of the MD&A, in the General Fund, does the paragraph indicate the amount of the ending fund balance for the fiscal year? How much? Also, is any part of the fund balance unreserved? How much? k. Explain the difference among net investment in capital assets, unrestricted net position and restricted net position? 4. In the Basic Financial Statement section, list each financial statement provided in the order presented in the section and identify and explain the following: a. On the statement of net position, list the specific accounts and the amounts under Governmental Activities section and explain the following items: Due from ... Inventories Internal balance Capital assets (net) Accounts payable and accrued liabilities Current portion of long term liabilities Net Position (indicate how much is net investment in capital assets, how much is restricted and how much is unrestricted) b. On the statement of net position, is the total net position in the Governmental Activities section listed as a positive or negative number? Interpret briefly what the total represents. c. On the statement of activities, identify and list the largest expense in the Governmental Activities section? Identify and list the smallest? d. On the statement of activities, what is the total interest expense reported? e. On the statement of activities, identify and list the largest charge for service under program revenues in the Governmental Activities section? Identify and list the smallest? f. Explain the items under the category \"Operating Grants and Contributions\". g. Explain the items under the category \"Capital Grants and Contributions\". h. List the business-type activities found on the statement of activities. i. On the statement of activities, identify the largest \"net expense\" for Governmental Activities. Identify any programs or functions in that section that generated \"net revenues\" and list the amount(s). j. On the statement of activities, list the types of general revenues and transfers provided. 4 k. On the statement of activities, did the general revenues and transfers offset the total \"net expense\" to provide a positive increase to the fund balance? How much of a positive change resulted? If there was a negative change, how much resulted? l. Where there any discretely presented component units presented on the statement of activities or the statement of net position? Yes or No. If yes, briefly describe. 5. In the Basic Financial Statement section, in examining the Balance Sheet for the General Fund (and possibly non-major other governmental funds), identify and explain the following: a. In the fund balance section, list the restricted components and the unrestricted component(s). b. Explain the difference among non-spendable, restricted, committed, assigned, and unassigned fund balances. c. Explain how the balance sheet for the General Fund is different from the Statement of Net Position of the state you are examining. Provide examples of notable differences. 6. In the Basic Financial Statement section, in examining the proprietary fund Statement of Net Position, and the Statement of Revenues, Expenses, and Changes in Fund Net Position, as well as the Statement of Cash Flows, identify and explain the following: a. What is the method of accounting that is used to account for proprietary funds? b. What are the specific propriety fund categories that are reported on the proprietary fund Statement of Net Position? c. List the assets and liability accounts (ignore amounts) that are reported on the propriety fund Statement of Net Position. If any of these accounts are non-current, so indicate. d. On the Statement of Net Position, in the net position section at the bottom of the statement, explain why the majority of the amounts are listed as \"restricted\". e. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, what is the net amount of revenues minus expenses described? [what are the specific words that are used? Hint: \"operating . . . \" ] f. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, how much depreciation expense is listed for each enterprise fund category? g. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, how much is the operating income (loss) for each of the specific enterprise funds listed? h. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, list the type(s) and how much is (are) the non-operating income (loss) for each of the specific enterprise funds listed? i. On the Cash Flows Statement, is the direct or indirect method being used (per SFAS No. 95)? Does a reconciliation schedule follow the Cash Flows Statement? j. On the Cash Flows Statement, briefly discuss some of other operating activities (inflows and outflows). For example, if one of the enterprise funds is a lottery, what are the inflows and outflows in the operating area? 5 k. On the Cash Flows Statement for propriety funds, how does the order of activities reported differ with the order of activities of a for-profit operation? l. On the Cash Flows Statement, explain how the financing activities section is presented and contrast such reporting with the financing activities' section of a for-profit operation. Provide specific examples in your response. 7. In the Basic Financial Statement section, in examining the fiduciary fund Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position, identify and explain the following: a. On the Statement of Fiduciary Net Position, what are the specific categories of funds (pension, private purpose trusts, agency, etc)? b. On the Statement of Fiduciary Net Position, describe in a few sentences, the types of assets listed, if the assets are mainly current or non-current, and some of the specific assets for each of the funds that are reported. c. On the Statement of Fiduciary Net Position, many of the assets are intra-fund receivables. List some examples with amounts. d. On the Statement of Fiduciary Net Position, many of the liabilities are intra-fund payables. List some examples with amounts. e. On the Statement of Fiduciary Net Position, list some of the accounts reported in the Net Position section. How much (in total) in Net Position is reported for Agency Fund(s)? f. On the Statement of Changes in Fiduciary Net Position, why is the statement presented with the headings \"additions\" and \"deductions\"? g. Are the results of the Statement of Fiduciary Net Position and Changes in Fiduciary Net Position included in the government-wide financial statements? Explain. 8. In the Basic Financial Statement section, what are the specific component units of the state government? What are the financial statements that were prepared? List them. 9. In the Basic Financial Statement section, on what page do the Notes to Financial Statements begin and on what page do they? How many disclosure notes are provided? What is the first disclosure note referred to as? a. How much debt is the state carrying (see disclosure on debt)? 10. In the Required Supplementary Information section of the CAFR, identify and explain the following: a. On the Budgetary Comparison Schedule, what revenue item had the largest DIFFERENCE between the original budget and the final budget? b. On the Budgetary Comparison Schedule, what expenditure item had the largest DIFFERENCE between the original budget and the final budget? c. On the Budgetary Comparison Schedule, what is the total difference in revenues between the final budget and the actual (on a budgetary basis)? Was this over (under) budget? What item(s) contributed the most to this difference? 6 d. On the Budgetary Comparison Schedule, what is the total difference in expenditures between the final budget and the actual (on a budgetary basis)? Was this over (under) budget? What item(s) contributed the most to this difference? 11. The ability to properly interpret financial ratios is critical to your understanding of governmental financial reporting. In Chapter 10 of the text, turn to pages 418-20. The ratios on page 418 are used to analyze government-wide financial reporting in a CAFR. Most of the ratios are briefly explained in Illustration 10-4. Please calculate the following ratios: Financial Position Ratios - #1 Unrestricted Net Position (Assets), # 3 Debt to Assets, and #4 Current Ratio; Financial Performance - #6 Change in net position, #7 Interperiod equity, and #9 BTA self-sufficiency, Financial Capability - #11 Bonded debt per capita, #12 Available legal debt limit, and #13 Property taxes per capita. In preparing your ratios, you might have to consult information contained in the disclosures. For example, the ratio for bonded debt, per capita; you would need to examine the required supplementary information for long-term debt to determine the numerator. The population in the denominator could be found most likely in the statistical section of the CAFR. When you write up and explain your ratio analysis, be sure to list the ratio (explaining what is contained in the numerator and what is contained in the denominator), then show your calculations and indicate the page number(s) in the CAFR from which you retrieved the amounts. Lastly, you will need to interpret the ratio result in a sentence or two. 12. In a well-developed paragraph or two, after examining the financial statements, disclosures, and calculated some ratios in the CAFR of the state you selected, write in some detail any particular items or impressions that interested you, what you learned from examining the CAFR. Do you believe you understand the financial operations of a government better after having taken this course and completed this project? 1 St. John's University The Peter J. Tobin College of Business Department of Accounting and Taxation ACC 639 Summer 2017 Governmental and Not-For-Profit Accounting Professor: Dr. Benjamin R. Silliman, C.P.A. Comprehensive Annual Financial Report (CAFR) Project Name: _____________________________________________________________ State Assigned: Virginia 2 Download the most recent (2016) state CAFR (not the state's pension CAFR) and use it to respond to the following items: 1. Identify the state you are examining and provide the exact URL of the web page from which you downloaded the CAFR (copy-and-paste the URL, do not type; then test the URL to be sure it opens correctly). The city am examining is the city of Virginia. The Web Page from which I have downloaded the CAFR is http://www.doa.virginia.gov/reports/CAFR/2016/2016CAFR.pdf What is the most recent fiscal year (and indicate the last date of the fiscal year)? Also indicate the date the C AFR was published and the name of the Chief Executive Officer of the state (the governor). The most recent fiscal year is 2016 and the last date of the fiscal year is June 30, 2016.The date the CAFR was published is December 15.2016.The name of the chief executive officer of the state (the governor) is The Honorable Terence R. McAuliffe. 2. In the Introductory Section, there is a Letter of Transmittal. Briefly explain in your own words the purpose of the Letter of Transmittal and identify and explain the following: The purpose of the letter of transmittal is to serve as an introduction to the CAFR as it accompanies the CAFR .The recipient of the letter of transmittal is able to identify the context in which to view the CAFR. What is the date on the letter? 3 The date on the letter is December 15, 2016. a. To whom is the Letter addressed? The letter is addressed to The Honorable Terence R. McAuliffe Governor of the Commonwealth of Virginia. b. From whom is the Letter written (also identify the office on the letterhead where the letter was written)? The letter is written from the office of the comptroller with the letter head, Commonwealth of Virginia, Office of the Comptroller. c. What are some of the highlights that were mentioned for the most recent fiscal year? The highlights must be expressed in your own words. Do not copy and paste text from the CAFR. The highlights mentioned for the most recent fiscal are transmittal letter and organization charts for the state government, the state auditor's report in the financial section as well as management' s discussion and analysis(MD$A) and financial statements, both combining and individual fund financial statements and supporting schedules.(CAFR P.6) d. Was the state organizational government chart provided? The state organizational government chart was provided. Briefly explain how the state is organized (administration with agencies, legislative, and judiciary). The state is organized in Executive branch which comprise of the Attorney general, the governor and lieutenant Governor .The administrative agencies are comprised of the 4 governor followed by the chief staff then several secretaries like secretary of administration, Agriculture and forestry, Commerce and Trade, Public safety and Homeland Security, secretary of technology., secretary of transportation, finance and veterans and defense Affairs. Other administrative Agencies answerable to the governor are interstate organization contributions and secretary of commonwealth and office of inspector general. The administrative organization compromise of the organization of the department of accounts. (CAFR P. 19-22) e. Were there any component units? If so, how many? There were component units which represented 29.5 percent of total assets and deferred outflows. They are 48 (CAFR P.28)., 26 non-higher education component units and 22 higher education institutions that are reported as discretely presented component units. f. Does the Letter contain any discussion on the budget and appropriations? The letter contains discussions of budget appropriations. Briefly explain in a paragraph the state's budgetary policies (including appropriations). The state's budgetary policies are preparation of budget principally on cash basis .The budget represents appropriations as authorized by the general assembly on a basis of a period of after two years. (Biennial basis) at the program. The commonwealth does monitor expenditure activities for ensuring expenditures do not exceed appropriated amounts. A central general ledger recording total appropriations and related expenditures for all agencies and institutions included in the approved budget is maintained by the 5 comptroller. Systematic controls are in place to control to prevent disbursements that that go beyond authorized appropriations. g. Who signed the letter? The letter was signed by David A. Von Moll, comptroller of the commonwealth of Virginia. 3. In the state's Financial Section, there is an auditor's report. Briefly explain the purpose of the auditor's report and also identify and explain the following: The purpose of the auditor's report is to express an opinion on whether the city's financial statements were free from material misstatement. a. What is the date on the letter? The date of the letter is December 15, 2016. b. Given the last date of the fiscal year, exactly how many days had passed until the dated audit report letter? The last date of the fiscal year was June 30, 2016 and exactly 168 had passed until the dated audit report letter. c. To whom is the auditor's report addressed? 6 The auditor's report is addressed to The Honorable Terence R. McAuliffe Governor of Virginia and The Honorable Robert D. Orrock, Sr. Chairman, Joint Legislative Audit and Review Commission. d. From whom is the auditor's report written (also identify the office on the letterhead where the report was written)? The auditor's report is written from Martha S. Mavredes, Auditor of Public Accounts. The office on the letter head where the report was written is Richmond, Virginia 23218(CAFR p.24). e. Was the audit performed by an independent audit firm? If not, what organization performed the audit? The audit was not performed by an independent audit firm but by an independent CPA Martha S. Mavredes, Auditor of Public Accounts (CAFR p.24). f. Usually in the second paragraph of the auditor's report, the phrase \"We conducted our audits in accordance with . . .\" What is the auditor referring to? The auditor is referring to compliance with conformity to auditing standards generally accepted in the United States of America and those that can be applied to financial audits contained in Government Auditing standards as issued by the comptroller general of the United States. He is referring to conformity to standards that govern and regulate the scope of their audit. 7 g. Is there any place on the auditor's report that refers to Generally Accepted Accounting Principles? What paragraph is this and why is it included in that paragraph? There is no place on the auditor's report that refers to generally accepted accounting principles. h. In the Management's Discussion and Analysis (MD&A) section, there is a section that discusses the Government-wide Financial Analysis. Briefly explain in your own words some significant results that are highlighted on the Statement of Net Position and Statement of Activities that occurred during the current fiscal year. There is a section that discusses the Government-wide Financial Analysis in the MD&A section. (CAFR p.27). Some significant results that are highlighted on the statement of net position and statement of activities are highest cash and equivalents in governmental activities compared to business type activities (CAFR p.40).Non-depreciable and depreciable capital assets are highest for governmental type activities compared to business activities Statement of activities shows how the net position of the commonwealth changed in the current fiscal year. In the statement of activities the governmental activities expenses exceed those on expenses on business-type activities. (CAFR p.42). i. On the Statement of Activities, what is the largest revenue source and largest expense source? How large? 8 The largest revenue source on the statement of activities is individual and fiduciary income tax by 35%. The largest expense source on the statement of activities is individual and family and services by 39% (CAFR p. 32). j. In the major governmental funds section of the MD&A, in the General Fund, does the paragraph indicate the amount of the ending fund balance for the fiscal year? How much? Also, is any part of the fund balance unreserved? How much? The paragraph indicates the amount of the ending fund balance for the fiscal year of $710.3 million. The part of this fund balance is unreserved and is $114.4 million. k. Explain the difference among net investment in capital assets, unrestricted net position and restricted net position? 4. In the Basic Financial Statement section, list each financial statement provided in the order presented in the section and identify and explain the following: Financial statements provided in order presented in the section are: government -wide financial statements including Statement of Net Position Statement of Activities Fund Financial Statements including Balance Sheet Governmental Funds 9 Reconciliation of the Balance Sheet - Governmental Funds to the Government-wide Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds to the Government-wide Statement of Activities Statement of Fund Net Position - Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds. Statement of Cash Flows - Proprietary Funds. Statement of Fiduciary Net Position - Fiduciary Funds Statement of Changes in Fiduciary Net Position - Fiduciary Funds Statement of Net Position - Component Units. Statement of Activities - Component Units. a. On the statement of net position, list the specific accounts and the amounts under Governmental Activities section and explain the following items: 10 Due from ... Due from component units $49,517,000 Due from external parties $14,056, 000 These are amounts from component units and third parties to cater for governmental activities (CAFR p.40). Inventories $183,597,000 Internal balance $116,250,000 Capital assets (net) $30,415,387,000 Accounts payable and accrued liabilities $986,034,000 Current portion of long term liabilities $12,157,996,000 Net Position (indicate how much is net investment in capital assets, how much is restricted and how much is unrestricted) $20,114,236,000 Unrestricted $5,559,978,000 Restricted $ 14,554,258,000 b. On the statement of net position, is the total net position in the Governmental Activities section listed as a positive or negative number? Interpret briefly what the total represents. 11 The total net position in the Governmental Activities section is listed as a positive number meaning the funding of governmental activities has no deficit balance. c. On the statement of activities, identify and list the largest expense in the Governmental Activities section? Identify and list the smallest? The largest expense in the governmental activities section is individual and Family Services $14,024,213,000 and the smallest is Interest and Charges on Long-term Debt $240, 007,000 d. On the statement of activities, what is the total interest expense reported? The total interest expense reported is Interest and Charges on Long-term Debt $240,007,000 e. On the statement of activities, identify and list the largest charge for service under program revenues in the Governmental Activities section? Identify and list the smallest? The largest charge for service is transportation worth $675,270,000 and the smallest is administration of justice $284,226,000. f. Explain the items under the category \"Operating Grants and Contributions\". Operating grants and contributions are contributions from donors and third parties in this case to finance governmental activities in functions as general government, education, transportation, resources and economic development, individual and family services administration of justice and interest and charges on long-term debt. 12 g. Explain the items under the category \"Capital Grants and Contributions\". Item under category capital grants and contributions are grants and contributions from donors and third parties to cater for capital expenditures in functions or education programs, general government, transportation, resources and economic development ,individual and family services, administration of justice, interest charges on long-term debt. h. List the business-type activities found on the statement of activities. Virginia lottery Virginia college savings plan Unemployment compensation Alcoholic Beverage control Risk management Local choice health care Route 460 funding corporation of Virginia Consolidated laboratory eVA procurement system Department of Environmental Quality Title V Wireless E-99 13 Museum and Library Gift Shops Behavioral Health Canteen and Work activity i. On the statement of activities, identify the largest \"net expense\" for Governmental Activities. Identify any programs or functions in that section that generated \"net revenues\" and list the amount(s). Individual and family services. j. On the statement of activities, list the types of general revenues and transfers provided. Taxes and other taxes k. On the statement of activities, did the general revenues and transfers offset the total \"net expense\" to provide a positive increase to the fund balance? How much of a positive change resulted? If there was a negative change, how much resulted? Yes they did. Positive change was $20, 114,236,000. l. Where there any discretely presented component units presented on the statement of activities or the statement of net position? Yes or No. If yes, briefly describe. 14 fNo. 5. In the Basic Financial Statement section, in examining the Balance Sheet for the General Fund (and possibly non-major other governmental funds), identify and explain the following: a. In the fund balance section, list the restricted components and the unrestricted component(s). Restricted components $1,320,000. b. Explain the difference among non-spendable, restricted, committed, assigned, and unassigned fund balances. Non-spendable fund balances are those that the government of the commonwealth cannot spend, restricted funds are those that are held for spending on certain activities /functions, committed funds are those set aside to be spend on given functions, assigned fund balances are set to be spend of known programs and unassigned fund balances are not that have not been allocated to be spend on known programs. c. Explain how the balance sheet for the General Fund is different from the Statement of Net Position of the state you are examining. Provide examples of notable differences. Balance sheet assess assets and liabilities of the commonwealth like cash and cash equivalents and investments whereas statement of net position shows resources of the commonwealth available to meet its programs and functions like capital assets 15 6. In the Basic Financial Statement section, in examining the proprietary fund Statement of Net Position, and the Statement of Revenues, Expenses, and Changes in Fund Net Position, as well as the Statement of Cash Flows, identify and explain the following: a. What is the method of accounting that is used to account for proprietary funds? b. What are the specific propriety fund categories that are reported on the proprietary fund Statement of Net Position? c. List the assets and liability accounts (ignore amounts) that are reported on the propriety fund Statement of Net Position. If any of these accounts are non-current, so indicate. d. On the Statement of Net Position, in the net position section at the bottom of the statement, explain why the majority of the amounts are listed as \"restricted\". e. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, what is the net amount of revenues minus expenses described? what are the specific words that are used? Hint: \"operating . . . \" ] f. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, how much depreciation expense is listed for each enterprise fund category? g. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, how much is the operating income (loss) for each of the specific enterprise funds listed? h. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, list the type(s) and how much is (are) the non-operating income (loss) for each of the specific enterprise funds listed? 16 i. On the Cash Flows Statement, is the direct or indirect method being used (per SFAS No. 95)? Does a reconciliation schedule follow the Cash Flows Statement? j. On the Cash Flows Statement, briefly discuss some of other operating activities (inflows and outflows). For example, if one of the enterprise funds is a lottery, what are the inflows and outflows in the operating area? k. On the Cash Flows Statement for propriety funds, how does the order of activities reported differ with the order of activities of a for-profit operation? l. On the Cash Flows Statement, explain how the financing activities section is presented and contrast such reporting with the financing activities' section of a for-profit operation. Provide specific examples in your response. 7. In the Basic Financial Statement section, in examining the fiduciary fund Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position, identify and explain the following: a. On the Statement of Fiduciary Net Position, what are the specific categories of funds (pension, private purpose trusts, agency, etc.)? The specific categories are pensions and other employee benefit trusts, investment trust, agency and private purpose trusts. (p.29) b. On the Statement of Fiduciary Net Position, describe in a few sentences, the types of assets listed, if the assets are mainly current or non-current, and some of the specific assets for each of the funds that are reported. 17 Types of assets reported in the statement of fiduciary net position are cash and cash equivalents, investments, and others (CAFR p.63). c. On the Statement of Fiduciary Net Position, many of the assets are intra-fund receivables. List some examples with amounts Examples of amounts are due from internal parties 30,327,000. a. On the Statement of Fiduciary Net Position, many of the liabilities are intra-fund payables. List some examples with amounts. Example is due to internal parties $65 private purpose funds, and $13,822 pension and other employee benefit trust funds all in thousand dollars. b. On the Statement of Fiduciary Net Position, list some of the accounts reported in the Net Position section. How much (in total) in Net Position is reported for Agency Fund(s)? Some accounts reported in net position are investments, contributions, receivables and accounts payable. c. On the Statement of Changes in Fiduciary Net Position, why is the statement presented with the headings \"additions\" and \"deductions\"? The statement is presented with headings additions and deductions to show inflows and outflows of resources. 18 d. Are the results of the Statement of Fiduciary Net Position and Changes in Fiduciary Net Position included in the government-wide financial statements? Explain. The results are not included because they are balances controlled separately either by commonwealth or external. 8. In the Basic Financial Statement section, what are the specific component units of the state government? What are the financial statements that were prepared? List them. Specific component units are loans and dues .Statements prepared are loans receivable from component units and due from component units. 9. In the Basic Financial Statement section, on what page do the Notes to Financial Statements begin and on what page do they? How many disclosure notes are provided? What is the first disclosure note referred to as? Notes to the financial statements begin on page 74 of the CAFR. and end on page 176.40 disclosure notes are provided with first is Summary of Significant Accounting Policies a. How much debt is the state carrying (see disclosure on debt)? The state is carrying $601,632, 000 debt (CAFR p.36) 10. In the Required Supplementary Information section of the CAFR, identify and explain the following: a. On the Budgetary Comparison Schedule, what revenue item had the largest DIFFERENCE between the original budget and the final budget? 19 The CAFR does not have a budgetary comparison schedule that shows such differences. b. On the Budgetary Comparison Schedule, what expenditure item had the largest DIFFERENCE between the original budget and the final budget? The CAFR does not have a budgetary comparison schedule that shows such differences. c. On the Budgetary Comparison Schedule, what is the total difference in revenues between the final budget and the actual (on a budgetary basis)? Was this over (under) budget? What item(s) contributed the most to this difference? The CAFR does not show such differences (CAFR p.25) d. On the Budgetary Comparison Schedule, what is the total difference in expenditures between the final budget and the actual (on a budgetary basis)? Was this over (under) budget? What item(s) contributed the most to this difference? The CAFR does not show these differences in expenditures mentioned in the case. 11. The ability to properly interpret financial ratios is critical to your understanding of governmental financial reporting. In Chapter 10 of the text, turn to pages 418-20. The ratios on page 418 are used to analyze government-wide financial reporting in a CAFR. Most of the ratios are briefly explained in Illustration 10-4. Please calculate the following ratios: Financial Position Ratios - 20 #1 Unrestricted Net Position (Assets), = # 3 Debt to Assets, and=total debt/total assets that shows the gearing level of the state. #4 Current Ratio= current assets /current liabilities=315,612/199,176=1.58 showing the commonwealth is in position to settle its current liabilities as they fall due. (CAFR p.53). Financial Performance - #6 Change in net position, #7 Interfered equity, and There is no interfered equity in this case. #9 BTA self-sufficiency, this indicates level at which business activities are covered by current costs Financial Capability - #11 bonded debt per capita, = (short term debt +long term debt - cash equivalents)/population (9,163,129)8433=$1,086.58. #12 Available legal debt limit, is given by debt applicable to percentage limit which is =3.04% x42.8 billion total debt (CAFR p.27) #13 Property taxes per capita.this is given by property taxes collected per capita given provided by property taxes divided by the population and this is =12.5% to 70% (CAFR p. 149). 12. In a well-developed paragraph or two, after examining the financial statements, disclosures, and calculated some ratios in the CAFR of the state you selected, write in some detail any particular items or impressions that interested you, what you learned from examining the CAFR. Do you believe you understand the financial operations of a government better after having taken this course and completed this project? 21 The government has a good current ratio and therefore is able to meet any obligations that are short term as they fall due. The net position is as well positive. This implies the state is in position to finance its functions without deficits. 1 St. John's University The Peter J. Tobin College of Business Department of Accounting and Taxation ACC 639 Summer 2017 Governmental and Not-For-Profit Accounting Professor: Dr. Benjamin R. Silliman, C.P.A. Comprehensive Annual Financial Report (CAFR) Project Name: _____________________________________________________________ State Assigned: Virginia 2 Download the most recent (2016) state CAFR (not the state's pension CAFR) and use it to respond to the following items: 1. Identify the state you are examining and provide the exact URL of the web page from which you downloaded the CAFR (copy-and-paste the URL, do not type; then test the URL to be sure it opens correctly). The city am examining is the city of Virginia. The Web Page from which I have downloaded the CAFR is http://www.doa.virginia.gov/reports/CAFR/2016/2016CAFR.pdf What is the most recent fiscal year (and indicate the last date of the fiscal year)? Also indicate the date the C AFR was published and the name of the Chief Executive Officer of the state (the governor). The most recent fiscal year is 2016 and the last date of the fiscal year is June 30, 2016.The date the CAFR was published is December 15.2016.The name of the chief executive officer of the state (the governor) is The Honorable Terence R. McAuliffe. 2. In the Introductory Section, there is a Letter of Transmittal. Briefly explain in your own words the purpose of the Letter of Transmittal and identify and explain the following: The purpose of the letter of transmittal is to serve as an introduction to the CAFR as it accompanies the CAFR .The recipient of the letter of transmittal is able to identify the context in which to view the CAFR. What is the date on the letter? 3 The date on the letter is December 15, 2016. a. To whom is the Letter addressed? The letter is addressed to The Honorable Terence R. McAuliffe Governor of the Commonwealth of Virginia. b. From whom is the Letter written (also identify the office on the letterhead where the letter was written)? The letter is written from the office of the comptroller with the letter head, Commonwealth of Virginia, Office of the Comptroller. c. What are some of the highlights that were mentioned for the most recent fiscal year? The highlights must be expressed in your own words. Do not copy and paste text from the CAFR. The highlights mentioned for the most recent fiscal are transmittal letter and organization charts for the state government, the state auditor's report in the financial section as well as management' s discussion and analysis(MD$A) and financial statements, both combining and individual fund financial statements and supporting schedules.(CAFR P.6) d. Was the state organizational government chart provided? The state organizational government chart was provided. Briefly explain how the state is organized (administration with agencies, legislative, and judiciary). The state is organized in Executive branch which comprise of the Attorney general, the governor and lieutenant Governor .The administrative agencies are comprised of the 4 governor followed by the chief staff then several secretaries like secretary of administration, Agriculture and forestry, Commerce and Trade, Public safety and Homeland Security, secretary of technology., secretary of transportation, finance and veterans and defense Affairs. Other administrative Agencies answerable to the governor are interstate organization contributions and secretary of commonwealth and office of inspector general. The administrative organization compromise of the organization of the department of accounts. (CAFR P. 19-22) e. Were there any component units? If so, how many? There were component units which represented 29.5 percent of total assets and deferred outflows. They are 48 (CAFR P.28)., 26 non-higher education component units and 22 higher education institutions that are reported as discretely presented component units. f. Does the Letter contain any discussion on the budget and appropriations? The letter contains discussions of budget appropriations. Briefly explain in a paragraph the state's budgetary policies (including appropriations). The state's budgetary policies are preparation of budget principally on cash basis .The budget represents appropriations as authorized by the general assembly on a basis of a period of after two years. (Biennial basis) at the program. The commonwealth does monitor expenditure activities for ensuring expenditures do not exceed appropriated amounts. A central general ledger recording total appropriations and related expenditures for all agencies and institutions included in the approved budget is maintained by the 5 comptroller. Systematic controls are in place to control to prevent disbursements that that go beyond authorized appropriations. g. Who signed the letter? The letter was signed by David A. Von Moll, comptroller of the commonwealth of Virginia. 3. In the state's Financial Section, there is an auditor's report. Briefly explain the purpose of the auditor's report and also identify and explain the following: The purpose of the auditor's report is to express an opinion on whether the city's financial statements were free from material misstatement. a. What is the date on the letter? The date of the letter is December 15, 2016. b. Given the last date of the fiscal year, exactly how many days had passed until the dated audit report letter? The last date of the fiscal year was June 30, 2016 and exactly 168 had passed until the dated audit report letter. c. To whom is the auditor's report addressed? 6 The auditor's report is addressed to The Honorable Terence R. McAuliffe Governor of Virginia and The Honorable Robert D. Orrock, Sr. Chairman, Joint Legislative Audit and Review Commission. d. From whom is the auditor's report written (also identify the office on the letterhead where the report was written)? The auditor's report is written from Martha S. Mavredes, Auditor of Public Accounts. The office on the letter head where the report was written is Richmond, Virginia 23218(CAFR p.24). e. Was the audit performed by an independent audit firm? If not, what organization performed the audit? The audit was not performed by an independent audit firm but by an independent CPA Martha S. Mavredes, Auditor of Public Accounts (CAFR p.24). f. Usually in the second paragraph of the auditor's report, the phrase \"We conducted our audits in accordance with . . .\" What is the auditor referring to? The auditor is referring to compliance with conformity to auditing standards generally accepted in the United States of America and those that can be applied to financial audits contained in Government Auditing standards as issued by the comptroller general of the United States. He is referring to conformity to standards that govern and regulate the scope of their audit. 7 g. Is there any place on the auditor's report that refers to Generally Accepted Accounting Principles? What paragraph is this and why is it included in that paragraph? There is no place on the auditor's report that refers to generally accepted accounting principles. h. In the Management's Discussion and Analysis (MD&A) section, there is a section that discusses the Government-wide Financial Analysis. Briefly explain in your own words some significant results that are highlighted on the Statement of Net Position and Statement of Activities that occurred during the current fiscal year. There is a section that discusses the Government-wide Financial Analysis in the MD&A section. (CAFR p.27). Some significant results that are highlighted on the statement of net position and statement of activities are highest cash and equivalents in governmental activities compared to business type activities (CAFR p.40).Non-depreciable and depreciable capital assets are highest for governmental type activities compared to business activities Statement of activities shows how the net position of the commonwealth changed in the current fiscal year. In the statement of activities the governmental activities expenses exceed those on expenses on business-type activities. (CAFR p.42). i. On the Statement of Activities, what is the largest revenue source and largest expense source? How large? 8 The largest revenue source on the statement of activities is individual and fiduciary income tax by 35%. The largest expense source on the statement of activities is individual and family and services by 39% (CAFR p. 32). j. In the major governmental funds section of the MD&A, in the General Fund, does the paragraph indicate the amount of the ending fund balance for the fiscal year? How much? Also, is any part of the fund balance unreserved? How much? The paragraph indicates the amount of the ending fund balance for the fiscal year of $710.3 million. The part of this fund balance is unreserved and is $114.4 million. k. Explain the difference among net investment in capital assets, unrestricted net position and restricted net position? 4. In the Basic Financial Statement section, list each financial statement provided in the order presented in the section and identify and explain the following: Financial statements provided in order presented in the section are: government -wide financial statements including Statement of Net Position Statement of Activities Fund Financial Statements including Balance Sheet Governmental Funds 9 Reconciliation of the Balance Sheet - Governmental Funds to the Government-wide Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds to the Government-wide Statement of Activities Statement of Fund Net Position - Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds. Statement of Cash Flows - Proprietary Funds. Statement of Fiduciary Net Position - Fiduciary Funds Statement of Changes in Fiduciary Net Position - Fiduciary Funds Statement of Net Position - Component Units. Statement of Activities - Component Units. a. On the statement of net position, list the specific accounts and the amounts under Governmental Activities section and explain the following items: 10 Due from ... Due from component units $49,517,000 Due from external parties $14,056, 000 These are amounts from component units and third parties to cater for governmental activities (CAFR p.40). Inventories $183,597,000 Internal balance $116,250,000 Capital assets (net) $30,415,387,000 Accounts payable and accrued liabilities $986,034,000 Current portion of long term liabilities $12,157,996,000 Net Position (indicate how much is net investment in capital assets, how much is restricted and how much is unrestricted) $20,114,236,000 Unrestricted $5,559,978,000 Restricted $ 14,554,258,000 b. On the statement of net position, is the total net position in the Governmental Activities section listed as a positive or negative number? Interpret briefly what the total represents. 11 The total net position in the Governmental Activities section is listed as a positive number meaning the funding of governmental activities has no deficit balance. c. On the statement of activities, identify and list the largest expense in the Governmental Activities section? Identify and list the smallest? The largest expense in the governmental activities section is individual and Family Services $14,024,213,000 and the smallest is Interest and Charges on Long-term Debt $240, 007,000 d. On the statement of activities, what is the total interest expense reported? The total interest expense reported is Interest and Charges on Long-term Debt $240,007,000 e. On the statement of activities, identify and list the largest charge for service under program revenues in the Governmental Activities section? Identify and list the smallest? The largest charge for service is transportation worth $675,270,000 and the smallest is administration of justice $284,226,000. f. Explain the items under the category \"Operating Grants and Contributions\". Operating grants and contributions are contributions from donors and third parties in this case to finance governmental activities in functions as general government, education, transportation, resources and economic development, individual and family services administration of justice and interest and charges on long-term debt. 12 g. Explain the items under the category \"Capital Grants and Contributions\". Item under category capital grants and contributions are grants and contributions from donors and third parties to cater for capital expenditures in functions or education programs, general government, transportation, resources and economic development ,individual and family services, administration of justice, interest charges on long-term debt. h. List the business-type activities found on the statement of activities. Virginia lottery Virginia college savings plan Unemployment compensation Alcoholic Beverage control Risk management Local choice health care Route 460 funding corporation of Virginia Consolidated laboratory eVA procurement system Department of Environmental Quality Title V Wireless E-99 13 Museum and Library Gift Shops Behavioral Health Canteen and Work activity i. On the statement of activities, identify the largest \"net expense\" for Governmental Activities. Identify any programs or functions in that section that generated \"net revenues\" and list the amount(s). Individual and family services. j. On the statement of activities, list the types of general revenues and transfers provided. Taxes and other taxes k. On the statement of activities, did the general revenues and transfers offset the total \"net expense\" to provide a positive increase to the fund balance? How much of a positive change resulted? If there was a negative change, how much resulted? Yes they did. Positive change was $20, 114,236,000. l. Where there any discretely presented component units presented on the statement of activities or the statement of net position? Yes or No. If yes, briefly describe. 14 No. 5. In the Basic Financial Statement section, in examining the Balance Sheet for the General Fund (and possibly non-major other governmental funds), identify and explain the following: a. In the fund balance section, list the restricted components and the unrestricted component(s). Restricted components $1,320,000. b. Explain the difference among non-spendable, restricted, committed, assigned, and unassigned fund balances. Non-spendable fund balances are those that the government of the commonwealth cannot spend, restricted funds are those that are held for spending on certain activities /functions, committed funds are those set aside to be spend on given functions, assigned fund balances are set to be spend of known programs and unassigned fund balances are not that have not been allocated to be spend on known programs. c. Explain how the balance sheet for the General Fund is different from the Statement of Net Position of the state you are examining. Provide examples of notable differences. Balance sheet assess assets and liabilities of the commonwealth like cash and cash equivalents and investments whereas statement of net position shows resources of the commonwealth available to meet its programs and functions like capital assets 15 6. In the Basic Financial Statement section, in examining the proprietary fund Statement of Net Position, and the Statement of Revenues, Expenses, and Changes in Fund Net Position, as well as the Statement of Cash Flows, identify and explain the following: a. What is the method of accounting that is used to account for proprietary funds? Accrual basis of accounting is used to account for proprietary funds. b. What are the specific propriety fund categories that are reported on the proprietary fund Statement of Net Position? These are enterprise and internal service funds categories are reported on proprietary fund net position. c. List the assets and liability accounts (ignore amounts) that are reported on the propriety fund Statement of Net Position. If any of these accounts are non-current, so indicate. Assets are current assets i.e. and cash equivalents, investments, receivables net, due from other funds, due from external funds, due from component units,inventory,prepaid items and others and non-current assets are investments ,receivables and depreciable and nondepreciable capital assets. Liability accounts are current liabilities i.e. Accounts payable, amounts payable to other governments, due to other funds ,due to external parties ,unearned revenue, obligations under securities lending program and others and non -current liabilities are interfund payable, claims payable due to more than one year ,long term liabilities due in more than one year. 16 d. On the Statement of Net Position, in the net position section at the bottom of the statement, explain why the majority of the amounts are listed as \"restricted\". Majority of amounts are listed as restricted because a restriction has put on them by funders against spending on unauthorized activities. e. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, what is the net amount of revenues minus expenses described? What are the specific words that are used? Hint: \"operating . . . \" ] Operating income f. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, how much depreciation expense is listed for each enterprise fund category? Virginia lottery $2,929,000 and savings plan $535,000 g. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, how much is the operating income (loss) for each of the specific enterprise funds listed? Virginia lottery $592,628,000, Virginia college savings plan $43, 668,000,unemployment compensation $203,546,000. h. On the Statement of Revenues, Expenses, and Changes in Fund Net Position, list the type(s) and how much is (are) the non-operating income (loss) for each of the specific enterprise funds listed? 17 Virginia lottery $987, 000, Virginia savings plan ($212,000) and unemployment compensation ($16,000) (CAFR p.56-58) i. On the Cash Flows Statement, is the direct or indirect method being used (per SFAS No. 95)? Does a reconciliation schedule follow the Cash Flows Statement? Indirect method is used and the reconciliation schedule follows the cash flow statement (CAFR p.58). j. On the Cash Flows Statement, briefly discuss some of other operating activities (inflows and outflows). For example, if one of the enterprise funds is a lottery, what are the inflows and outflows in the operating area? k. On the Cash Flows Statement for propriety funds, how does the order of activities reported differ with the order of activities of a for-profit operation? l. On the Cash Flows Statement, explain how the financing activities section is presented and contrast such reporting with the financing activities' section of a for-profit operation. Provide specific examples in your response. 7. In the Basic Financial Statement section, in examining the fiduciary fund Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position, identify and explain the following: a. On the Statement of Fiduciary Net Position, what are the specific categories of funds (pension, private purpose trusts, agency, etc.)? 18 The specific categories are pensions and other employee benefit trusts, investment trust, agency and private purpose trusts. (p.29) b. On the Statement of Fiduciary Net Position, describe in a few sentences, the types of assets listed, if the assets are mainly current or non-current, and some of the specific assets for each of the funds that are reported. Types of assets reported in the statement of fiduciary net position are cash and cash equivalents, investments, and others (CAFR p.63). c. On the Statement of Fiduciary Net Position, many of the assets are intra-fund receivables. List some examples with amounts Examples of amounts are due from internal parties 30,327,000. a. On the Statement of Fiduciary Net Position, many of the liabilities are intra-fund payables. List some examples with amounts. Example is due to internal parties $65 private purpose funds, and $13,822 pension and other employee benefit trust funds all in thousand dollars. b. On the Statement of Fiduciary Net Position, list some of the accounts reported in the Net Position section. How much (in total) in Net Position is reported for Agency Fund(s)? Some accounts reported in net position are investments, contributions, receivables and accounts payable. 19 c. On the Statement of Changes in Fiduciary Net Position, why is the statement presented with the headings \"additions\" and \"deductions\"? The statement is presented with headings additions and deductions to show inflows and outflows of resources. d. Are the results of the Statement of Fiduciary Net Position and Changes in Fiduciary Net Position included in the government-wide financial statements? Explain. The results are not included because they are balances controlled separately either by commonwealth or external. 8. In the Basic Financial Statement section, what are the specific component units of the state government? What are the financial statements that were prepared? List them. Specific component units are loans and dues .Statements prepared are loans receivable from component units and due from component units. 9. In the Basic Financial Statement section, on what page do the Notes to Financial Statements begin and on what page do they? How many disclosure notes are provided? What is the first disclosure note referred to as? Notes to the financial statements begin on page 74 of the CAFR. and end on page 176.40 disclosure notes are provided with first is Summary of Significant Accounting Policies a. How much debt is the state carrying (see disclosure on debt)? The state is carrying $601,632, 000 debt (CAFR p.36) 20 10. In the Required Supplementary Information section of the CAFR, identify and explain the following: a. On the Budgetary Comparison Schedule, what revenue item had the largest DIFFERENCE between the original budget and the final budget? The CAFR does not have a budgetary comparison schedule that shows such differences. b. On the Budgetary Comparison Schedule, what expenditure item had the largest DIFFERENCE between the original budget and the final budget? The CAFR does not have a budgetary comparison schedule that shows such differences. c. On the Budgetary Comparison Schedule, what is the total difference in revenues between the final budget and the actual (on a budgetary basis)? Was this over (under) budget? What item(s) contributed the most to this difference? The CAFR does not show such differences (CAFR p.25) d. On the Budgetary Comparison Schedule, what is the total difference in expenditures between the final budget and the actual (on a budgetary basis)? Was this over (under) budget? What item(s) contributed the most to this difference? The CAFR does not show these differences in expenditures mentioned in the case. 21 11. The ability to properly interpret financial ratios is critical to your understanding of governmental financial reporting. In Chapter 10 of the text, turn to pages 418-20. The ratios on page 418 are used to analyze government-wide financial reporting in a CAFR. Most of the ratios are briefly explained in Illustration 10-4. Please calculate the following ratios: Financial Position Ratios - #1 Unrestricted Net Position (Assets), = # 3 Debt to Assets, and=total debt/total assets that shows the gearing level of the state. #4 Current Ratio= current assets /current liabilities=315,612/199,176=1.58 showing the commonwealth is in position to settle its current liabilities as they fall due. (CAFR p.53). Financial Performance - #6 Change in net position, #7 Interfered equity, and There is no interfered equity in this case. #9 BTA self-sufficiency, this indicates level at which business activities are covered by current costs Financial Capability - #11 bonded debt per capita, = (short term debt +long term debt - cash equivalents)/population (9,163,129)8433=$1,086.58. #12 Available legal debt limit, is given by debt applicable to percentage limit which is =3.04% x42.8 billion total debt (CAFR p.27) 22 #13 Property taxes per capita.this is given by property taxes collected per capita given provided by property taxes divided by the population and this is =12.5% to 70% (CAFR p. 149). 12. In a well-developed paragraph or two, after examining the financial statements, disclosures, and calculated some ratios in the CAFR of the state you selected, write in some detail any particular items or impressions that interested you, what you learned from examining the CAFR. Do you believe you understand the financial operations of a government better after having taken this course and completed this project? The government has a good current ratio and therefore is able to meet any obligations that are short term as they fall due. The net position is as well positive. This implies the state is in position to finance its functions without deficits. 1 St. John's University The Peter J. Tobin College of Business Department of Accounting and Taxation ACC 639 Summer 2017 Governmental and Not-For-Profit Accounting Professor: Dr. Benjamin R. Silliman, C.P.A. Comprehensive Annual Financial Report (CAFR) Project Name: _____________________________________________________________ State Assigned: Virginia 2 Download the most recent (2016) state CAFR (not the state's pension CAFR) and use it to respond to the following items: 1. Identify the state you are examining and provide the exact URL of the web page from which you downloaded the CAFR (copy-and-paste the URL, do not type; then test the URL to be sure it opens correctly). The city am examining is the city of Virginia. The Web Page from which I have downloaded the CAFR is http://www.doa.virginia.gov/reports/CAFR/2016/2016CAFR.pdf What