Comprehensive Annual Financial Report for the City of Raleigh and Austin

Comprehensive Annual Financial Report for the City of Raleigh and Austin

A Comprehensive Annual Financial Report (CAFR) is a set of financial statements prepared by states, local counties or municipalities. The role of the report is to indicate how the budgeted money has been spent. CAFR consists of several government financial statements that need to comply with the accounting standards set in the GASB. The CAFR reports need to be standardized to prevent ambiguity in providing the report for funding from the government. There are three sections of the CAFR: introductory, fiscal, and statistical. It also plays a crucial role in combining the financial details of an enterprise with the accounting funds. A comparison of the CAFR for the City of Raleigh and Austin will entail the method of publication, auditing, and budget information and the nature of the audit report.

The publication methods for the City of Raleigh and Austin are the same. They both comply with the GASB standards, focusing on three primary sections. The first section introduces a letter from the county and municipal leaders. However, there are minor differences in the mode of financial statement presentation. The financial statements for Austin are simple to understand (Granof and Wardlow, 2010). There is no breakdown of the sources of funds and how they are being utilized. The financial statements for the City of Raleigh are more detailed. There is a section with information on the accounting funds and those that arise from the enterprise.

The auditor verifies all the CAFRs that have been audited. The information about the auditing is equally under the GASB standards. However, there are slight differences between the two. The CAFR for Austin has data from the internal audit process, while the one for the City of Raleigh has information from the external audit process. The audit information is apparent as no differences exist between the City of Raleigh and Austin.

There is no variation in the type of audit report provided between the City of Raleigh and Austin. The type of audit report that is being provided is that of an unqualified opinion. That implies that the information obtained from the City of Raleigh and Austin reports is free from misinterpretation. The reports have also been maintained following GASB. The City of Raleigh lacks an internal audit, while Austin has an internal audit function.

An analysis of the CAFR for the City of Raleigh gives a clear picture of how they spend the funds on both the government and other activities belonging to the enterprise. The cover page has a summary of the expenditure. The introductory section provides a list of names of the administrators. The administrator’s name is mentioned together with the official position they hold. The governance of the city of non-profit making, and the chart shows the mayor who is the leader. A summary of the financials is provided in the introduction. For instance, the City of Raleigh has a budget of $754,208,491, and so far, they have spent a total of $754,208,491 (Perry, 2015). There is also some information on the variation between the city’s low- and high-income earners.

The financial section provides a breakdown of the city’s funds sources. An indication of the net assets and liabilities is in the form of a balance sheet. There is also some information on earnings and spending plans for the city (Granof et al., 2016). There are various financial statements on the sources of revenue and the expenditure in different quarters of the year. It is important to note that the revenue sources have financial statements showing how all the money collected was utilized. The financial year for the City of Raleigh starts on July 1 and ends on June 30 of the same year.

The city utilizes variance analysis for budget-to-actual reports. The budgeted amounts are cots and city, implying that the generated revenue needs to balance the expenses. Since there is an increase in the city’s needs, the next financial year’s budget needs to be higher than that of the previous fiscal term. The variance analysis provides a budget versus the actual figures. Understanding the budget to predict revenue and the cost given for a particular future (Perry, 2015). The variance analysis’s effectiveness level is very high as it compares the budget and the actual figures. That implies that there is a high level of accuracy. Also, it is effective in the identification of the changes that take place in income and the sources of revenue or expenditure. For a non-profit organization, it is not expected that they will generate gains. Therefore, the variance is expected to be small.

Revenue is the amount collected by the income service of the public institution remission. It can be made equally as a private payment. The organization and the government mentioned above each remit their taxes through the Financial Treasury. The approach that is used is that of viewing taxes as returns on investment. The auditing reports clearly identify the deferred revenue that is collected from the above two entities. The agency budget equally provides a straightforward registration of the variation between the year-to-year level of taxes. Therefore, the opening of investment within society occurs when there is a shift or variation in the value of assets. Hence, the cost of the pension and the gains from the returns increase the actual level of tax (Perry, 2015). For instance, in Raleigh and Austin, there is a considerable variation in the value of the investment, which implies that the reports of the subsequent years will equally not be the same.

The creation of fair financial statements and the various steps is done according to Audit and the standards for financial statements. Also, there is a focus on maintaining internal control per the presentation and implementation by the top-level management. Management does not take responsibility for analyzing items at an organization’s disposal (Granof et al., 2016). The responsibility is to the extent of the ability of the government. The required data is presented for an audit process to be carried out and a compilation of all the required reports.

The general funds for the City of Raleigh and Austin reporting are by the priority of the funds. Significant financial reporting is done, and a reconciliation with the various financial statements is done during the auditing process. Also, various provisions are specific and need to be audited. The process was done and reported for the organization that is being contrasted. The last report is for the previous financial year, which has undergone a financial review based on the respective report that has been audited.

References

Granof, M. H., & Wardlow, P. S. (2010). Core Concepts of Government and Not-For-Profit Accounting. Wiley.

Granof, M. H., Khumawala, S. B., Smith, D. L., & Calabrese, T. D. (2016). Government and Not-for-Profit Accounting, Binder Ready Version: Concepts and Practices. John Wiley & Sons.

Perry E. James, Chief Financial Officer. (2015). The City of Raleigh, North Carolina: Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2015. https://www.raleighnc.gov/home/content/Finance/Articles/FinanceReports.htm.

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Comprehensive Annual Financial Report for the City of Raleigh and Austin

Review the financial statements and audit reports for a local county or municipality of your choice.

The financial statements of the government you selected should have at least three funds.

1. Compare and contrast the Comprehensive Annual Financial Report (CAFR) of the selected local government entity with the government entity
   • In your comparison, include the following:
     • The publication method of the CAFR.
     • Audit and budget information in the CAFR.
     • The type of audit report issued.
       

       Comprehensive Annual Financial Report for the City of Raleigh and Austin

     • The existence or nonexistence of an internal audit function within the government entity.
2. Prepare the analysis for the selected local government entity, including information on the introduction, financial section, and statistical section.
3. Analyze the methods used by the selected local government entity in comparing the budget-to-actual reports.
   • Include in your analysis an evaluation of the basis of accounting used for the budget and financial statements.
4. Analyze the sources of revenue for the selected local government.
   • Include information on both governmental and business-type activities, examining:
     • Information about the general fund.
     • Various management discussion and analysis items of note.
     • Year-to-year variations in the tax levels of income.
     • Deferred revenue.
     • Property taxes and how they are accounted for other sources identified as primary revenue for the entity.

This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.

The specific course learning outcome associated with this assignment: