ACC 548 Week 1 Individual Assignment Comprehensive Annual Financial Report Briefing
ACC 548 Week 1 Individual Assignment Comprehensive Annual Financial Report Briefing fin571
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Date Created: 11/11/15
Comprehensive Annual Financial Report Brie ng Each year the State of Nevada issues the Comprehensive Annual Financial Report CAFR The most recent being the 2011 report that was issued by Kim R Wallin the State Controller for the fiscal year ending June 30 2011 In recent elections there have been some additions to the Nevada elected board members The purpose of this paper is to provide an overview of government accounting and reporting and to introduce the Nevada CAFR to the newly elected board members Also contained is an evaluation of the Management Discussion amp Analysis MDampA section contained in the 2011 report Governmental Accounting and Reporting Budgeting and accounting are particularly important for a government entity Any individual with the capacity to make decisions concerning the governing body should possess the fundamental knowledge of budgeting and accounting The Governmental Accounting Standards Board GASB sets the accounting and financial reporting standards for state and local governments whereas the Financial Accounting Standards Board FASB sets these standards in forprofit business Granof amp Wardlow 2011 Governmental objectives and missions are different than those in forprofit business Forprofit business is highly measured by increasing profits and shareholder value Financial metrics are based specifically on revenue and net income targets whereas these measures would not be of much significance to governmental reporting Government focus cannot always be measured in dollars and cents and tends to be based more so on service efforts and accomplishments In addition the actual budget holds more significance in government than in regular business The budget is technically what governs the government whereas in business the marketplace and competition is the driving force Granof amp Wardlow 2011 Furthermore annual financial reports are more important in forprofit business than the associated budget State of Nevada CAFR The State of Nevada issues the CAFR in accordance with the Nevada Revised Statutes NRS and the State Accounting Procedures Law The reports objective is to provide a clear picture of the State of Nevada government as a unified single entity and to provide fundbased financial statements The State of Nevada CAFR is divided up into four sections A brief outline of the contents of each section is shown below 0 Introductory Section This section includes the letter of transmittal that summarizes the governments profile financial information the economic outlook major initiatives and awards and acknowledgements for the state Also included are the constitutional officers and an organizational chart 0 Financial Section This section is the bulk of the report It includes the independent auditor s report management discussion and analysis government and fund financial statements supplementary information and statements and schedules for multiple funds associated with the State of Nevada 0 Statistical Section The section includes statistical information that aid in supporting the financial section Analysis on trends for government assets fund balances sales tax debt ratios and margins demographic and economic statistics state employees and operating indicators 0 Compliance Section Include in the section is a letter from the independent auditor that acknowledges the overall presentation of the financial statements and the effectiveness of internal controls over financial reporting The State of Nevada was admitted to the Union in 1864 The majority of land contained in Nevada is owned and operated by the federal government 80 respectively Nearly 88 of the entire population of Nevada is located in one of two population centers Washoe County and Clark County Nevada does not collect a personal income tax as the economy and tax base is reliant on gaming tourism federal activities and the mining industry Wallin 2011 The State of Nevada reporting entity prepared the associated financial statements in conformity with Generally Accepted Accounting Principles GAAP as applied to government units in the United States of America The financial statements conform to the requirements of GASB the accepted standard setting body for government accounting and financial reporting The accounting and reporting principles are based on the theory that publicly elected officials are accountable to their residents throughout the state Wallin 2011 Management Discussion amp Analysis Evaluation The analysis of the basic financial statements of the State of Nevada is broken up into separate sections 1 governmentwide financial statements 2 fund level financial statements and 3 the notes to the financial statements In additionto the analysis of the basic financial statements the analysis of other supplementary information is included The governmentwide financial statements provide an overview of all revenues and expenses for the fiscal year The statement of net assets and the statement of activities provide users with a year over year picture of whether the overall financial position of the state is improving Each statement is reported in either government or businesstype activities Government activities would be primarily supported by states taxes whereas the business activities are intended to be selfsufficient The State of Nevada s financial position improved slightly from 2010 to 2011 as net assets increased by 50 million Wallin 2011 Governmentwide revenues increased from 2010 This increase was primarily due to increased revenues from sales taxes gaming taxes mining taxes and lodging taxes All of these increased revenues are key indicators on the economic progress of the state More people are spending more money which is a positive indicator of stability Governmental activities realized a net increase in assets of 266 million which was partially offset by the business activities net assets decrease of 216 million Expenses exceeded revenues for both government and businesstype activities in 2011 resulting in the use of 4 billion in general revenues Wallin 2011 The governmental funds for the State of Nevada decreased from 2010 by 120 million to 146 billion These funds are made up of the general fund which is the chief operating fund of the state the state highway fund the municipal bond fund and the consolidated bond interest redemption fund Proprietary funds of the state consist of enterprise funds and internal service funds Enterprise funds are allocated to programs outside of the state whereas internal services are allocated to state agencies Total ending balances for enterprise and internal service funds is negative 52 million and 58 million respectively Slight budget variations on both general fund sources and expenditures arose primarily from reduced intergovernmental revenues and timing differences Capital assets at the end of the fiscal year hold a net book value of 55 billion Capital assets for the state consist of land buildings equipment software infrastructure and construction in progress In addition long term liabilities increased 84 million during the fiscal year This increase was primarily due to the issuance of general obligation bonds References Copley P A 2011 Essentials of Accounting for Governmental and NotforProfit Organizations 10th ed Retrieved from The University of Phoenix eBook Collection database Granof M H amp Wardlow P S 2011 Core Concepts of Government and NotforProfit Accounting 2nd ed Retrieved from The University of Phoenix eBook Collection database Wallin K R 2011 State of Nevada Comprehensive Annual Financial Report Retrieved from http controllernv govF inancialReports CAFRpdffile sF Y 1 1Allpdf
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