Please complete the following I & III-The Governmental Accounting Standards Board (GASB) has established accountability as the cornerstone of financial reporting for governments. Accountability, as...

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Please complete the following I & II










I-The Governmental Accounting Standards Board (GASB) has established accountability as the cornerstone of financial reporting for governments. Accountability, as defined by GASB, includes budgetary and fiscal compliance. In this assignment, you will explore a local government's Annual Comprehensive Financial Report (ACFR) for the elements of the ACFR and how those elements are incorporated by a local government.





Your professor will assign a local government ACFR for use in this assignment.




Instructions




Write a 3-5 page paper in which you address the following:







  1. Analyze the local government ACFR for the types of budgets the local government maintains. Provide at least three different budget types maintained by the local government and an example of what each controls.



  2. Analyze the Management Discussion and Analysis for at least three assertions made by management as to their budgetary and fiscal compliance. Provide an example of each of the three assertions you analyzed.



  3. Analyze the Budget-to-Actual reports in the local government ACFR for at least three indications of budgetary and fiscal compliance, such as significant or non-significant variances. Provide the implication for the local government of each of the three indications.



  4. Analyze the local government ACFR for at least three local government finance-related legal or contractual requirements. Provide an example of each of the three requirements.



  5. Use at least three quality sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment.












II-





In the United States, the management and auditors of publicly held companies must evaluate their internal controls annually. The purpose of the evaluation is to look for any control deficiencies. Doing so will help avoid any penalties such as the $10.5 million that the SEC imposed on Citigroup Inc. as a result of its internal controls failures. See the article from SEC.gov,





Citigroup to Pay More Than $10 Million for Books and Records Violations and Inadequate Controls











Links to an external site.





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You are an external auditor hired by Citigroup to perform an audit. You will be reporting to Citigroup's audit committee.




Instructions




Write a 2–3 page report for the audit committee in which you:







  1. Critique Citigroup's internal controls and the purpose they serve.



  2. Distinguish between operation and design control deficiency.



  3. Determine the reasons that led Citigroup Inc. to pay $10.5 million in penalties.



  4. Recommend techniques that will overcome the weaknesses of Citigroup's internal controls; justify the recommendation.



  5. Use three sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment.



Answered 5 days AfterJul 08, 2024

Answer To: Please complete the following I & III-The Governmental Accounting Standards Board (GASB) has...

Prince answered on Jul 13 2024
5 Votes
Solution of Part I & II
Student Name
13th July 2024
Part 1:
1. Types of budgets maintained by Cary:
There are numerous budget funds to account for the expenditures and revenues of local government, which is a comprehensive form of finance. As Rubin (2019) notes, local governments generally use multiple types of budgets to better govern their operations and forward planning.
A. Annual budgets:
General Fund budget - Cary's main operating fund that covers day-to-day governmental operations and services. That may me
an delaying actions on critical functions, such as public safety, general administration and parks and recreation. The Transit Special Revenue Fund budget in particular oversees public mass transit operations and secures funding for providing this highly important service. The Emergency Telephone System Special Revenue Fund replaced the 911 state budget, indicating that emergency communicative resources need a specific fund and governance system.
B. b) Multi-year project grants - where large amounts of money get allocated to big projects.
Cary examples long-term capital improvements and infrastructure projects in multi-year project budgets. The Capital Projects Fund, with sub-funds for Parks, Public Works (streets), Fire and General Governmental projects is used to plan and execute the most significant investments that span multiple fiscal years. The Utility Systems Enterprise Fund also engages in multi-year budgeting for water and sewer infrastructure projects. This requires a multi-year perspective for the federal community development initiatives that are managed by the Community Development Block Grant Special Revenue Fund as well. Multi-year budgets such as these, which are consistent with best practices in local government capital budgeting (Marlowe et al., 2009).
C. c) Internal Service Fund Budgets:
Cary employing Internal Service Fund budgets for the Health Insurance Internal Service Fund and Fleet Management Internal Service Fund is an advanced model of managing shared services across departments. It also enables the government organization to have budget that is based on these services so as to be able alocate costs appropriately and optimize service delivery (Kioko et al., 2011).
2. Management Assertions regarding both Budgetary and fiscal compliance:
a) Rating of AAA Bonds:
Management: "Cary Holds All Three AAA Bond Ratings for GO and Revenue Bonds, the Highest Rating Available from Each Agency."
This will demonstrate good fiscal management and maintain compliance with debt covenants. Though the highest bond ratings are within reach by adhering to sound fiscal policies and providing consistent financial performance.
b) Compliance with Legal Debt Limit
Management said: "The legal debt margin for Cary is $2.4 billion."
This statement is in compliance with a State of North Carolina statutory limitation on general obligations debt, which currently limits us to issue only up to 8% of the present total assessed value of all taxable property within our county. Making sure to stick within this limit is essential for fiscal and legal reasons (Marlowe, 2015).
c) Cautious Topline Projections
The MD&A states: "Cary was very conservative in their estimation of certain revenues...for the 2023 budget, including ad valorem taxes and other taxes that were under-budgeted by $4.9 million combined."
This comment builds on the broken-window model of conservative budgeting, a major support for fiscal stability and mandates to balance budgets (Hendrick 2011).
3. Budgetary and fiscal compliance indicators:
Budget-to-actual reports help provide valuable information regarding how well or not a local government is actually managing its fiscal resources in compliance with the budget. As noted by Justice et al. Although this seems like repeating things I have already said before, these same changes are necessary to determine economic sustainability and where actions on the profitability may need be needed (2020)
a) General Fund Positive Variance in Revenue:
The General Fund indicates the actual revenues were $225,390,830 compared to budgeted of $219,785,587 or a favorable variance of only $5.6 million. This represents a significant overperformance, suggesting very strong fiscal health and potentially conservative revenue projections. As indicated by Hendrick (2011), revenue variance results from the comparison of actual (with budget) revenues and positive variances occurring regularly can provide insight as to a government's ability to absorb economic ebs and tides, while maintaining services.
This means the local government either has more money to spend on services or save for a rainy day. The money would give Cary additional financial flexibility to handle unexpected events or invest in community priorities. But consistent large variances may also signal a requirement of more precise forecasting techniques.
b) General Fund Expenditure positive variance:
Budget The final budget was $243,978,290 with actual expenditures of $233,913 910-budget variance Actual better-$10M This is a good news because it means we are at least cost effectively controlling and managing our budget. Rivenbark and Roenigk (2011, p. 3) point out that although consistent...
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