Matanuska-Susitna Borough, Alaska (CAFR)

MATANUSKA-SUSITNA BOROUGH, ALASKA (CAFR) 6

Matanuska-SusitnaBorough, Alaska (CAFR)

Matanuska-SusitnaBorough, Alaska (CAFR)

Exercise4-15

  1. Government activities, Government-wide level

  1. The government-wide financial statement provides information regarding the finances of Matanuska-Susitna Borough that is comparable to a business enterprise. It can be noted that Borough’s government-wide financial statements have categorized its government activities, business-type activities, and the total activities in isolated columns. Both government and the business-type activities are separated under the title primary government.

  2. Borough’s statement of net position has presented the assets and liabilities in their order of relative liquidity this implies that the statement of net position begins off with cash and those assets that can easily be converted to cash or can be consumed, whereas, the liabilities are reported as they are anticipated to be paid off.

  3. It is certain that the information on the expenses of government activities is recorded at their functional level of detail.

  4. Borough’s statement of activities shows the program revenues having been described as operating grants &amp contributions, fees, fines &amp charges for services, and the capital grants &amp contributions.

  1. General fund

  1. The statements and schedules relating to the general fund presented for Matanuska-Susitna Borough are incorporated in the balance sheet and the statement of revenues, expenditures, and changes in fund balances.

  2. In each schedule and statement, they were intended to provide an overall breakdown of every fund that is within the city perimeters.

  3. All assets presented in the general fund balance sheet are of noncurrent or non-liquid in nature except for the prepaid items and the inventories. The noncurrent assets i.e. the prepaid items and inventories are then reported in the non-dispensable fund balances where they are offset by equal amounts.

  4. From Borough’s general fund balance sheet, there are no noncurrent liabilities included.

  5. It can be observed that the revenue classification in the statement of revenue, expenditure and changes in fund balances are sufficiently detailed to be meaningful since it outlines the taxes and the intergovernmental items.

  6. It can be observed that the government has avoided recording expenses instead of expenditure because it only reports expenditures rather than expenses.

  1. Special revenue funds

  1. Borough’s statements and schedules relating to the special revenues funds can be found in the Combining Balance Sheet Statement and the Combining Statement of Revenues, expenditures, and changes in fund balances.

  2. The two items above are the only combining statements. Similarly, statements for individual special revenue funds like the non-area-wide services and service areas, fire service areas, and road service areas special revenue funds have been presented.

  3. Yes, Matanuska-Susitna Borough CAFR has further classified its expenditures by characters like capital outlay and debt service.

  4. Yes, it can be seen that the current expenditures have been categorized by function, for instance, general government, emergency services, and public services.

Exercise5-15

  1. General and other capital assets

  1. Borough’s government-wide statement of net position has presented capital assets as line entries. From the face of Borough’s financial statement, it can be observed that the non-depreciable capital assets have been recorded on an isolated line from the capital assets that are depreciable. As such, they are not presented separately in notes to the financial statements. The GASB standards hold that capital assets disclosures should be presented in the notes, whereby, the general capital assets are reported in isolated columns of government activities as well as under the business-type activities items. In the case of Borough, the notes have included the capital assets disclosures. The disclosures have clearly shown the opening balance as at July 1, 2014, additions and deletions where necessary and the closing balance as at June 30, 2015, for each class of capital asset, and similar information for the accumulated depreciation for every key function. Additionally, disclosures for each capital asset were presented separately for the government activities, business-type activities and individually in their component units. Borough`s notes to financial statement have specified the capitalization threshold of its capital assets and infrastructure to cost more than $ 5,000 with a useful life of more than two years. The notes also show the amounts of depreciation expenses allocated to every key function for the government activities at the government-wide level. Proper disclosures of the depreciation policies as well as outlines of the estimated lives of the key items of the depreciable capital assets have been presented in the notes. The notes to financial statements have not provided any disclosures relating to the capitalization of works of art or historical possessions. Matanuska-Susitna Borough has entered into lease agreements from 2008, as such, limited information on accounting policies have been released for those assets that were acquired under the lease.

  2. Other

Thecost of construction work in progress has been reported as assetsthat are not being depreciated in the notes to financial statement.In the general funds is where the cash received from the sale ofgeneral capital assets is recorded where they are recorded under theheading other financing sources.

  1. Capital projects funds

  1. Title and content.

Localimprovement units are the label for those funds that primarilyfunction as capital project funds. Borough’s CAFR has outlined thebase for the accounting treatment to be used for capital projectsfunds in the notes. This basis for accounting used conforms to theGASB accounting canons. For each project, separate capital projectfunds have been established.

  1. Statements and Schedules

Thecapital project funds can be found on the balance sheet and thestatement of revenues, expenditures, and changes in fund balances.Capital projects funds differ in relation to the budgeting proceduresadopted and size when they are compared to the statements shown inthe text. The dissimilarities are just a matter of arrangement andterminologies and thus, do not characterize deviances from the GASBaccounting standards.

  1. Financial resources inflow

Financialresources utilized for construction and assets acquisition arecategorized based on their foundations. Proceeds from bond issuancesand operating transfers from other funds are presented under theother financing sources under the statement of revenues, expendituresand changes in fund balances under the deficiency of revenues asexpenditure. On the other hand, intergovernmental grants andcontributions and interest on investment are recorded as revenues.For Borough, the capital project fund utilizes the modified accrualapproach for accounting and the inflows of current financialresources in measurement focus. Similarly, the tax supported bondswere sold at a premium. The accounting treatment for the premium onthe bond issuance was recorded in the statement of revenues,expenditures and changes in fund balances under other financingsources as a debit amount.

  1. Fund expenditures

Clearclassifications, well elaborated and complete details have beenprovided for Borough’s capital projects fund expenditures. In whichcase, they are satisfactory to meet the information requests of thecreditors, administrators, grantors and other interested parties. Forthose projects that are yet to be complete as at the date ofreporting financial statement, regular comparisons of the percentagesof authorizations for every project expended to date with thecompletion percentages were facilitated. Likewise, those projectsthat are completed within the financial year, the report is comparedto the overall expenditures for every project with authorization forthe projects. For those projects with cost overruns, they werefinanced by special assessment units through issuing long-term debts.

  1. Assets acquired under capital leases

UnderBorough’s CAFR, no general capital assets were purchased by theprimary government or other units during the year 2015. Where theprimary government was to lease capital assets from other functionalunits, the fund entry will record expenditures on debit and credit toother financing uses under the capital lease agreement. Thegovernment-wide entries will report a debit to the equipment and acredit to the capital lease payable.