Type of paper:Â | Essay |
Categories:Â | Company Government Financial analysis |
Pages: | 4 |
Wordcount: | 1037 words |
The city of Morrisville was incorporated in the year 1875 and is one of the most thriving cities in North Carolina. This region has been ranking highly regarding the most favorable places to live, raise a family, work or retire. As such, one of the unique aspects of this city is that high revenues are arising from property taxes because of the affinity for people to live here. With at least $14.7 million out of the possible $35.2 million in revenues that the city got in the latest financial report could be attributed to property taxes, showing the uniqueness of this city with regards to property ventures. Moreover, the largest part of the town's investment in capital assets includes investment in the area of property development, for example, land acquisition, machinery and the necessary land development equipment and buildings. Having access to major transport hubs such as the Raleigh International Airport, the state capital and the Interstate highways, the city is rightly placed for extensive investments in this area.
Challenges to Planning
The assets belonging to the town exceed the liabilities in 2015 by $124.5 million. Therefore, the town's net position has increased by $9.2 million. As earlier indicated earlier, the largest portion of the assets is used directly in the course of property development in the town, meaning that they cannot be liquidated to offset any increased debts for the town. This, in fact, means that the assets in the town are not available for future spending. Therefore, the town faces the challenge that in the face of increasing debts, the assets that it owns may not be used to service those debts. Other sources of revenue must be used to offset any imbalances in the finances of the town. Nonetheless, there exists a $19 million balance of the town's net position whose use is unrestricted. This may be used to meet any of the town's obligations including services to citizens.
Financial Statements Presentation
Financial reporting for cities makes provision for both governmental and business-type activities that the local government has been engaging in to finance the city's projects. As such, the financial presentation takes notice of the role of both the private sector and the public sector as contributors to the city's finances. As such, the presentation will include the share given by both sectors in the course of the financial year. It is important to note that GASB Rule No. 34 applies here as it relates to the financial analysis of local and state governments. This requirement enables the government to report on the revenues and expenditures gained from the government ventures that the organization is engaging in. Additionally, the managers of the governmental institutions are tasked to give their insights on the finances of the state or local government (GASB, 2014).
Furthermore, the GASB Rule No. 117 provides the directions for the presentation of financial statements for non-profit organizations such as the government. It is important to note that though the government may have an increasing net position; it is not operated on profits. Therefore, this provision works for the presentation of such an organization. This rule requires that the organization give a statement of its financial position, activities and cash flows. This is provided below as adopted from the 2013 Financial Reports (Morrisville, 2015):
GOVERNMENTWIDE FINANCIAL ANALYSIS
Governmental Businesstype Activities Activites Total
20152014 20152014 20152014
Current and other assets$29,254,073$27,388,610 $1,239,024$1,378,286 $30,493,097$28,766,896
Capital assets110,682,301103,717,771 805,551805,551 111,487,852104,523,322
Total assets139,936,374131,106,381 2,044,5752,183,837 141,980,949133,290,218
Longterm debt outstanding 12,912,449 13,142,159 155,000 12,912,449 13,297,159
Other liabilities 2,382,765 4,670,073 2,337 2,382,765 4,672,410
Deferred inflows of resources 2,825,466 4,931 2,825,466 4,931
Total liabilities 18,120,680 17,817,163 157,337 18,120,680 17,974,500
Net position: Net investment in capital assets 99,549,312 93,088,451 805,551 650,551 100,354,863 93,739,002
Restricted 5,131,025 5,701,761 5,131,025 5,701,761
Unrestricted 17,799,963 14,499,006 1,239,024 1,375,949 19,038,987 15,874,955
Total net position $ 122,480,300 $ 113,289,218 $2,044,575 $2,026,500 $ 124,524,875 $ 115,315,718
Fig 1: Morrisville Financial Analysis
Below represents the towns change in net position:
Governmental Activities
Businesstype
ActivitiesTotal
Revenues:
Program revenues:
201520142015201420152014
Charges for services $3,266,803 $2,989,395 $ $ $3,266,803 $2,989,395
Operating grants and contributions 508,875 497,609 508,875 497,609
Capital grants and contributions 7,627,332 5,305,670 7,627,332 5,305,670
Property taxes 14,745,618 14,577,176 14,745,618 14,577,176
Other taxes and licenses 1,724,212 1,753,968 1,724,212 1,753,968
Unrestricted intergovernmental 6,563,000 5,574,758 6,563,000 5,574,758
Unrestricted investment earnings 22,745 27,487 21,615 15,482 44,360 42,969
Miscellaneous 296,522 224,459 1,885 298,407 224,459
Parkland payment in lieu 551,487 551,487
Gain (Loss) on disposal of capital assets (41,118) 127,227 (41,118) 127,227
Total revenues 35,265,476 31,077,749 23,500 15,482 35,288,976 31,093,231
General revenues:
Expenses:
General Government 5,724,056 6,105,290 5,724,056 6,105,290
Development Services 2,900,259 2,552,421 2,900,259 2,552,421
Public Safety 9,274,703 8,324,497 9,274,703 8,324,497
Public Works Streets & Sanitation 4,805,597 3,768,812 4,805,597 3,768,812
Cultural and recreation 2,315,218 2,086,939 2,315,218 2,086,939
Interest on longterm debt 379,060 419,214 379,060 419,214
Water and sewer 5,425 13,606 5,425 13,606
Total expenses 25,398,893 23,257,173 5,425 13,606 25,404,318 23,270,779
Increases (decreases) in net position before
special items9,866,5837,820,57618,0751,8769,884,6587,822,452
Special items:
Transfer capital assets to the Town of Cary
Increases (decreases) in net position after
special items9,866,5837,820,57618,0751,8769,884,6587,822,452
Net position, July 1 113,289,218 105,468,642 2,026,500 2,024,624 115,315,718 107,493,266
Prior period adjustment(1,593,556)(1,593,556)
Prior period adjustment 918,055 918,055
Net position, June 30
$ 122,480,300 $ 113,289,218
$ 2,044,575
$ 2,026,500
$ 124,524,875
$ 115,315,718
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Let us consider a tabular representation:
GOVERNMENT AND NONPROFIT ACCOUNTING
SUMMARY OF GOVERNMENT ORGANIZATIONS PROJECTS
Criteria City of Morrisville
Types of Funds (e.g. Governmental, Proprietary, Fiduciary Governmental funds
Proprietary funds
Fiduciary funds
# Major Governmental Funds (name) Ten (10)
General Fund
Capital Projects Funds (9)
# Major Enterprise Funds (name)
One (1)
Water and Sewer
Activity of Enterprise Funds (e.g. utility)
Minimal activity due to a merger of the water and sewer activities with the Town of Cary
# Internal Service Funds Zero (0)
Activity of Internal Service Funds (examples)
N/A
# Major Component Units
Zero (0)
Activity of Component Units N/A
Component Unit presentation in Financial Statements
Not included in the report
# Minor Special Revenue Funds Zero (0)
Special Revenue Fund is included in the General Fund (GASB 54)
# Minor Capital Project Funds Eight (8)
# Minor Debt Service Funds Zero (0)
# Minor Permanent Funds Zero (0)
# Minor Enterprise Funds Zero (0)
Types of Fiduciary Funds which types and example of activity Pension Trust Fund
Retirement Health Care Trust Fund
Total General Fund Actual Revenues for fiscal year per fund financial statement $27,204,615
Main sources of revenue top 3 Ad valorem taxes ($14,784,833)
Unrestricted intergovernmental ($6,563,000)
Permits and fees ($2,100,027)
Main types of expenditures Public safety ($8,484,213)
Public works ($4,869,772)
General government ($3,115,978)
Total Enterprise Fund Revenues $18,075
Are Enterprise Funds self-supporting? No
Amount and type of Other Financing Sources (Uses) total all funds Four (4)
Transfers
Installment debt issuance proceeds
Claims and settlements
Fund balance appropriated
Amount of Federal $ received total all funds $315,110
Required Supplementary Information what information? Law Enforcement Officers Special Separation Allowance
Other Postemployment Benefits
Local Government Employees Retirement System
Firefighters and Rescue Squad Workers Pension
Statistical Section what type of information different than State of NC Government-wide Revenues
Assessed Valued of Taxable Property
Computation of Legal Debt Margin
New Commercial and Residential Activity
Unique Items items which were not noted in the State of NCs CAFR or not noted in class.
References
GASB. (2014). SUMMARY OF STATEMENT NO. 34. Retrieved April 21, 2016, from GASB: http://www.gasb.org/st/summary/gstsm34.html
Morrisville. (2015). Morrisville Comprehensive Annual Financial Report. Retrieved April 21, 2016, from http://www.ci.morrisville.nc.us/DocumentCenter/View/10452
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Essay Example: Morrisville Comprehensive Annual Financial Report. (2019, Aug 30). Retrieved from https://speedypaper.com/essays/unique-items
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