non profit accounting questions

Problems 15-2, 15-5, 15-7, 15-8, and 15-12 15-2 Ratios can help users assess economic condition. The data that follow were taken from the CAFR of Chaseville, a mid-sized Midwestern city with a population of82,000. All dollar amounts are in thousands. Total assessed value of property $2,300,000 Total property tax levy 42,500 Direct debt 70,000 Overlapping debt 46,486 General fund: Cash and investments 3,120 Total assets 19,500 Total liabilities 16,23 0 Nonspendable fund balance 780 Unassigned fund balance 5,789 Total tax revenues 38,756 Total expenditures 44,600 Debt service expenditures 4,500 Revenue from own sources 46,500 Total revenues 48,865 Intergovernmental revenue 2,003 Public safety expenditures 9,321 Health and welfare expenditures 4,567 Indicate and calculate the ratios that would best compare Chaseville with similar cities as to whether 1. Chaseville is more dependent upon revenues from other governments 2. it is directing a greater share ofits expenditures toward public safety 3. it has the necessary liquid resources to be better able to meet its short-term obligations as they come due 4. it has a greater available general fund balance relative to revenues, to meet future needs 5. its citizens pay a higher tax rate 6. its citizens pay more in taxes per person 7. it is a wealthier city, in that its citizens own relatively more property 8. it exerts greater scal effort 15-5 Changes in mix ofrevenues and expenditures must be interpreted with care. The data that follow were drawn from the city of Boulder, Colorado's CAFR. Dates have been changed. They are from two statistical-section schedules showing the mix of revenues and expenditures for a 10-year period. They include amounts only from the general fund, special revenue funds, and debt service funds. 2013 2003 (in thousands) Revenues Sales and use taxes $41,941 $18,750 General property taxes 9,501 4,900 Other taxes 9,673 3,756 Charges for services 5,004 2,524 Intergovernmental 10,114 6,840 Proceeds from bonds and notes 16,330 Other 8,246 5,692 Total revenues $84,479 $58,792 Expenditures General government and administration $10,222 $3,975 Public safety 17,466 10,786 Public works 16,472 7,499 Housing and human services 6,195 4,093 Culture and recreation 16,764 9,016 Acquisition ofreal estate and open spaces 11,315 11,706 Debt service 10,816 2,886 Other 2,323 Total expenditures $91,573 $49,961 1. As a consultant for a citizens association, you have been asked to determine whether there have been signicant changes in the way the city acquires and spends its resources. Prepare a schedule in which you compare 2013 and 2003 in terms of the mix of revenues and of expenditures for each year. Note and comment on any items that might distort a straight forward comparison of revenues and expenditures. 2. Comment on any changes between the two years that you consider signicant. 3. Expenditures for debt service increased significantly. What are the most likely reasons for the increase? Is it necessarily a sign of increased nancial stress? 15-7 Qualitative factors may be as important as quantitative factors in assessing a government's scal health. You are a CPA in charge of auditing a midsized school district. You recognize that the risk of nancial failure is as much dependent on factors that are not reported in the basic nancial statements as on factors that are reported. Accordingly, you conduct a comprehensive analysis of the district. Some of your ndings are summarized as follows. For each, indicate how it might affect the ability of the district to service its outstanding debt and provide the services that its constituents expect. 1. Owing to an inux of new high-tech rms into a nearby community (which is not within the jurisdiction of the school district), the population within the district is increasing by approximately 8% per year. Most of the new arrivals are young engineers and other professionals. 2. A developer has under construction within the jurisdiction of the school district a senior citizens' retirement village. The village is expected to increase both the district's population and its land value by approximately 4% . 3. During the year, the district changed the pay date of its employees. Previously, employees were paid on the last day of the month; currently, they are paid on the rst day of the following month. 4. The district's largest taxpayer, representing 10% of its property tax revenues, manufactures blue jeans and other clothing made of denim. 5. The district's superintendent recently resigned in the wake of charges that he falsied student scores on statewide achievement tests. 6. School district elections are hotly contested. The present school board is composed ofthree members who are committed to ''traditional'' educational methods and four who are considered ''progressives.'' Board meetings are almost always contentious. 7. Voters of the county in which the school district is located recently approved the largest general obligation bond issue in the county's history. 8. One of two candidates for governor of the state in which the school district is located is a strong advocate of a school voucher plan. The plan would provide nancial assistance to students who elect to attend private schools. 15-8 One ofthe challengesofnancialanalysisin government is that it is not always obvious whether an increase in a nancial ratio is a sign ofincreasing or decreasing scal strength. Explain the signicance of each of the following ratios. For each of the ratios, indicate whether an increase can be interpreted as a sign of (1) increasing or (2) decreasing scal strength. Where appropriate, show how an increase in the ratio can be interpreted as a sign of either. Explain and justify your response. 1. Cash, short-term investments, and receivables/Current liabilities 2. Revenue from own sources/Median family income 3. Number of employees/Population 4. Property tax revenues/Total operating revenues 5. Nondiscretionary expenditures/Total expenditures 6. Unassigned general fund balance/Total operating revenues 7. Intergovernmental revenues/Total operating revenues 8. Expendituresforpublicsafety/Totalexpenditures