Utilizing the City of Houston Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2022,

https://www.houstontx.gov/controller/acfr/acfr2022.pdf

assess the financial condition of the government. For purposes of this project, financial condition is broadly defined as a citys ability to provide an adequate range of services on a continuing basis. Specifically, it refers to a citys ability to (1) maintain existing service levels, (2) withstand major economic disruptions, and (3) meet the demands of a changing society in a changing economy.

Required: Analysis of expenditures and expenses.

Do any components of expenditures and, at the government-wide level, expenses exhibit sharp growth?

Is adequate budgetary control being exercised over expenditures?

How does the growth pattern of operating expenditures and expenses over the past 10 years compare with that of revenues?

Potential red flags or warning signs:

Expenditures increasing more rapidly than revenues.

Deferral of needed maintenance on capital plant.