Governmental and Nonprofit Accounting Comprehensive Local Government Project

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Governmental and Nonprofit Accounting Comprehensive Local Government Project

Objective and General Requirements: The object of this case is to help you obtain a better understanding of how to use financial and nonfinancial information to assess the current and long-term financial condition of the city of Radford by comparing it to the cities of Harrisonburg and Charlottesville.  All three cities have large state universities that do not pay property taxes.   

You will use the information provided in Radford City, Harrisonburg and Charlottesville CAFR to assess the current financial position and long-term financial condition or solvency of the city or county. The management discussion and analysis and the statistical section of the CAFR should be used. 

Overview:  For purposes of this project, financial condition is broadly defined as the ability of a city or county to provide an adequate range of services on a continuing basis.  Specifically, it refers to a city’s ability to (1) maintain existing service levels, (2) withstand major economic disruptions, and (3) meet the demands of a changing society in a changing economy. 

Assessing Financial Condition:

Read the MD&A for the city of Radford and briefly describe any major changes in the government’s finances identified in the MD&A.

Financial information: Financial information is intended to help the reader understand and assess how the County’s financial position has changed over time. Answer the following for all three governments.

1. How have governmental activities net position changed for the year?
2. How has the general fund’s fund balance changed for the year time?
3. For governmental activities, compute unrestricted net assets / expenses.
4. Compute general fund’s unassigned fund balance / general fund expenditures.
5. Based on the above, comment on how Radford compares to the other two cities.                                                                                

Revenue capacity information Revenue capacity information is intended to help the reader understand and assess the County’s ability to generate its own local revenue source. Use information from the general fund for this section. Answer the following for all three governments.

1. What are the largest two sources of revenue?
2. What percent of general revenue come from property taxes?
3. Compute local source revenue per capita and compare to other governments.
4. Based on the above, comment on the Radford’s ability to support its programs from local source revenue.

Expenses information Expenses information is intended to help the reader understand and assess the County’s ability to meet its most significant local expense source. Use the general fund for this section. Answer the following for all three governments.

1. What is the largest expenditure for the general fund?
2. What percent of expenditures come from it?
3. Compute expenditures per capita and compare to two other governments.
4. Based on the above, comment on the government’s ability to support its programs in the future.

Debt capacity information Debt capacity information is intended to help the reader understand and assess the affordability of the County’s current levels of outstanding debt and the

County’s ability to issue additional debt in the future. Answer the following for all three governments.

1. Compute debt per capita and compare to other governments. (can be found in the statistical section)
2. Compute total liabilities/total assets for governmental activities and compare to other governments.
3. Compute total liabilities/expense for governmental activities and compare to other governments.
4. Based on the above, comment on the government’s ability to support its programs in the future with debt.

Summary

Based on the above analysis, provide a brief summary of your opinion on the financial health of the Radford City.

Your paper should not exceed four typed pages.  This does not include any graphs or an appendix. In your analysis, you should compare the Radford City to Harrisonburg and Charlottesville.