BUS 544 - CAFR Project: Analysis of Financial Condition Prepare a written evaluation of the City of Smithville's financi
Posted: Wed Mar 30, 2022 3:50 pm
- Bus 544 Cafr Project Analysis Of Financial Condition Prepare A Written Evaluation Of The City Of Smithville S Financi 1 (72.4 KiB) Viewed 56 times
Hint: A Current Liabilities ratio of .05 would be considered a warning sign. 6) Debt ratio Hint: this ratio indicates what percentage of the city's assets are held by creditors. The remaining percentage of the city's assets are held by the citizens. 7) Current ratio Hint: Although 1.0 is considered an acceptable benchmark current ratio in business, a ratio of 2.0 is often considered the benchmark for governments. 8) Interperiod equity ratio Hint: An interperiod equity ratio of less than one indicates that not all of the expenses are being covered by the revenues generated in the current period. 9) What is your evaluation of Smithville's overall financial position? Please explain. 10) In addition to the financial information provided, what other financial and nonfinancial information would be helpful in assessing performance and why?
City of Smithville Statement of Net Position As of December 31, 2023 Primary Government Governmental Business-type Component Assets Activities Activities Total Units (none) Cash 633,043 $ 381,392 $ 1.014,435 Receivables, net (Note 1) 271,984 94,088 366,072 Inventories 60,420 74,583 135,003 Capital assets, net (Note 2) 20,253,171 2,344,908 22,598,079 Total Assets 21,218,618 2,894,971 24,113,589 Liabilities Accounts and other payables 426,764 117,904 544,668 Intemal balances (Note 3) 3,100 (3,100) Short-term notes payable 150,000 150,000 Noncurrent liabilities 3,029,536 150,000 3,179,536 Total Liabilities 3,459,400 414,804 3,874,204 Net Position Net investment in capital assets 17,223,635 2,044,908 19,268,543 Restricted for: Public safety 54,000 36,000 Capital projects 1,000 1,000 Unrestricted 480,583 435,259 915,842 Total Net Position $ 17,759,218 $ 2,480,167 $ 20,239,385 Notes: 1. Receivables consist of: Governmental Activities: Taxes receivable-delinquent of $286,360 and related estimated uncollectible amount of $23,539;Interest and penalties receivable on taxes of $11,902 and related estimated uncollectible amount of $2,739. Business-type Activities: Customer accounts receivable or $99,813, less related allowance for for uncollectible accounts of $5,725. 2. Net capital assets consist of: Governmental Activities: Land $4,231,000, Infrastructure $13,162,000, less accumulated depreciation of $2,871,964; Buildings of $6,296,000, less accumulated depreciation of $1,940,846; and Equipment of $3,641,575, less accumulated depreciation of $2,264,594. Business-type Activities: Land of $600,000; Buildings of $1,650,000, less accumulated depreciation of $832,500 and Equipment of $1,800,000, less accumulated depreciation of $872,592. 3. Governmental Activities: the internal payable of $3,100 is reported as an internal balance (payable). The preferred practice (see Illustration 9-3 in the textbook) is to report the net internal balance (receivable) as a negative
City of Smithville Statement of Activities As of December 31, 2023 Program Revenues Operating Charges for Grants and Services Contributions Capital Grants and Contributions Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business-Type Activities Activities Total Component Units (none) $ $ 939,645 99,519 $ S Expenses $ 1,267,823 2,491,042 1,089,118 806,186 709,225 68,286 Functions/Programs Governmental Activities: General government Public safety Public works Health and welfare Culture and recreation Interest expense Total Governmental Activities 360,000 (328,178) (2,031,523) (1,089,118) (377,186) (328,178) (2,031,523) (1,089,118) (377,186) 429,000 293,639 (68.286) (68,286) 6,431,680 1,332,803 789,000 (4,309,877) (4,309,877) $ Business-type Activities Solid waste disposal 2,534,069 Total Primary Government $ 8,966,749 Component Units (none) 2,617,290 $3,950,093 $ 789,000 $ (4,309,877) 83,221 83,221 83,221 (4,226,656) General Revenues: Taxes: Property Sales Interest and penalties on taxes Miscellaneous Total General Revenues Change in Net Position Net Position, January 1 Net Position. December 31 1,859,913 1,940,203 6,918 91,250 3,898,284 (411,593) 18,170,811 $ 17,759,218 1,859,913 1,940,203 6,918 91,250 3,898,284 (328,372) 20,567,757 $ 20,239,385 83,221 2,396,946 $ 2,480,167
City of Smithville Balance Sheet Governmental Funds As of December 31, 2023 Street Improvement Fund $ 1,000 Street Improvement Debt Service Fund $ 37,500 General 594,543 262,821 9,163 60,420 $ 926,947 Total Governmental Funds 633,043 262,821 9,163 60,420 $ 965,447 $ 1,000 $ 37,500 $ $ Assets Cash Taxes receivable delinquent (net) Interest and penalties receivable on taxes (net) Inventory of supplies Total Assets Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Vouchers payable Due to other funds Due to federal government Due to state government Total Liabilities Deferred Inflows of Resources Fund Balances: Nonspendable--inventory of supplies Restricted for public safety Restricted for capital projects Restricted for debt service Committed for health and welfare Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances 219,121 3,100 133,973 36,170 392,364 219,121 3,100 133,973 36,170 392,364 74,386 74,386 60,420 54,000 1,000 37,500 60,420 54,000 1.000 37,500 43,000 302,777 498,697 43,000 302,777 460,197 1,000 37,500 $ 926,947 $ 1,000 $ 37,500 $ 965,447
City of Smithville Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2023 General Fund Street Improvement Fund Street Improvement Debt Service Fund Total Governmental Funds $ $ 361,000 $ 1,877,578 1,579,203 12,571 497,960 173,590 789,000 661,253 91,250 1,877,578 1,940,203 12,571 497,960 173,590 789,000 661,253 91,250 6,250 6,049,655 5,682,405 361,000 6,250 6,250 Revenues Taxes-property Taxes-sales Interest and penalties on taxes Licenses and permits Fines and forfeits Intergovernmental revenue Charges for services Miscellaneous revenues Accrued interest on bonds sold Total Revenues Expenditures General goverment Public safety Public works Health and welfare Culture and recreation Construction expenditures Interest expenditures Total Expenditures Excess of Revenues over (under) Expenditures Other Financing Sources (Uses) Interfund transfers in (out) Premium on bonds Proceeds of bonds Total Other Financing Sources/Uses Increase (Decrease) in Fund Balances Fund Balances, January 1 Fund Balances, December 31 1,175,043 2.214,350 862,998 734,390 645,400 1,175,043 2,214,350 862,998 734,390 645,408 3,360,000 37,500 9,029,689 (2.980,034) 3,360,000 5,632,189 50,216 3,360,000 (2.999,000) 37,500 37,500 (31,250) 38,750 38,750 30,000 3,000,000 3,000,000 1,000 68,750 37,500 38,750 11,466 448,731 460,197 30,000 3,000,000 3,030,000 49,966 448,731 498,697 $ $ 1,000 $ 37,500 $
City of Smithville Reconciliation of the Governmental Funds Balance Sheet to the Government- Wide Statement of Net Position As of December 31, 2023 Total fund balances $ 498,697 Capital assets used in governmental activities are not financial resources and therefore are not reported in in the funds 20,253,171 Long-term liabilities, including unamortized premium, are not due and payable in the current period and therefore are not reported in the funds (3,029,536) Deferred inflows of resources are recognized as revenues of governmental activities in the statement of net position 74,386 Accrued interest on bonds payable is not due and payable in the current period and therefore is not reported in the funds (37,500) Net position of governmental activities $ 17,759,218
City of Smithville Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-wide Statement of Activities For the Year Ended December 31, 2023 Net changes in fund balances—total governmental funds $ 49,966 Amounts reported for the governmental activities in the statement of activities are different because: Governmental funds report capital outlay as expenditures, 3,444,775 However, in the statement of activities, the cost of these assets is allocated over their estimated useful lives as depreciation expense. This includes $3,360,000 reported as construction expenditures in the capital project fund and $84,776 of equipment purchased by the General Fund and reported as expenditures. Depreciation expense reduces net position but has no effect on fund balances. (815,980) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long- term liabilities in the statement of net position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long- term liabilities in the statement of net position. There was no repayment of bond principal during the year but new bonds were issued in this amount (including unamortized premium of $29,536). (3,029,536) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in govern- mental funds. Accrued interest on deferred serial bonds payable was reported in the statement of activities. (37,500) Some revenues reported provided current financial resources but were previously reported as revenues in the statement of activities. (23,318) Change in net position of governmental activities (411,593) $
City of Smithville Statement of Net Position Proprietary Funds As of December 31, 2023 Business-type Activities, Enterprise Funds Solid Waste Disposal Totals $ Assets Current assets: Cash Customer accounts receivable (net of $5,725 for doubtful accounts) Due from other funds Inventories Total Current Assets Noncurrent assets: Capital assets: Land Buildings (net of $832,500 accumulated depreciation) Equipment (net of $872,592 accumulated depreciation) Total Noncurrent Assets Total Assets 381,392 94,088 3,100 74,583 553,163 600,000 817,500 927,408 2,344,908 2,898,071 85,600 27,429 4,875 150,000 267,904 Liabilities Current Liabilities: Vouchers payable Accrued payroll and fringe benefits Accrued interest payable Revenue anticipation notes-current Total Current Liabilities Long-term liabilities: Revenue anticipation notes-long term Total Long-term Liabilities Total Liabilities Net Position Net investment in capital assets Unrestricted Total Net Position 150,000 150,000 417,904 2,044,908 435,259 2,480,167 $
City of Smithville Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds For Year Ended December 31, 2023 Business-type Activities- Enterprise Funds Solid Waste Disposal Totals Operating Revenue: Charges for services (net of $973 provision for $2,617,290 doubtful accounts) Operating Expenses: Payroll and fringe benefits expense 1,344,067 Materials and supplies expense 875,797 Depreciation expense 309,330 Total Operating Expenses 2,529,194 Operating Income 88,096 Nonoperating Expenses: Interest expense 4,875 Change in Net Position 83,221 Total Net Position, January 1 2,396,946 Total Net Position, December 31 $2,480,167
City of Smithville Statement of Cash Flows Proprietary Funds For Year Ended December 31, 2023 Business-type Activities Enterprise Funds Solid Waste Disposal Totals $ 2,639,850 (1,483,358) (860,500) 295,992 Cash flows from operating activities: Cash received from customers Cash paid to employees Cash paid to suppliers Net cash provided by operating activities Cash flows from capital and related financing activities: Acquisition of equipment Net cash used by capital and related activities Net increase in cash and cash equivalents Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 (159,600) (159,600) 136,392 245,000 381,392 $ $ 88,096 Reconciliation of Operating Income to Net Cash Used by Operating Activities Operating income Adjustments: Depreciation Decrease in net accounts receivable Decrease in interfund receivables Increase in inventories Increase in vouchers payable Decrease in interfund payables Decrease in accrued payroll and benefits Net Cash Provided by Operating Activities 309,330 18,260 4,300 (20,523) 40,420 (4,600) (139,291) 295,992 $
City of Smithville Solid Waste Disposal Fund Statement of Net Position As of December 31, 2023 $ 381,392 Assets Current assets: Cash Customer accounts recevable Less: Allowance for doubtful accounts Due from other funds Inventory of supplies Total Current Assets 99,813 5,725 94,088 3,100 74,583 553,163 600,000 Property, Plant, and Equipment Land Buildings Less: Accumulated depreciation buildings Equipment Less: Accumulated depreciation equipment Total Assets 1,650,000 832,500 1,800,000 872,592 817,500 927,408 2,898,071 Liabilities Current liabilities: Vouchers payable Accrued payroll and fringe benefits Accrued interest payable Current portion of revenue anticipation note Total Current Liabilities 85,600 27,429 4,875 150,000 267,904 Long-term liabilities: Revenue anticipation note Total Liabilities 150,000 417,904 Net Position Net investment in capital assets Unrestricted Total Net Position 2,044,908 435,259 $ 2,480,167
City of Smithville Street Improvement Capital Projects Fund Balance Sheet As of December 31, 2023 Assets Cash Total Assets $ $ 1,000 1,000 Liabilities and Fund Balances Fund Balances: Restricted-capital projects Total Liabilities and Fund Balances $ $ 1,000 1,000
City of Smithville Street Improvement Bond Debt Service Fund Balance Sheet As of December 31, 2023 Assets Cash $ 37,500 Total Assets $ 37,500 Liabilities and Fund Balances Fund Balances: Restricted-debt service Total Liabilities and Fund Balances $ $ 37,500 37,500
City of Smithville Street Improvemont Bond Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended December 31, 2023 Revenues: Accrued interest on bonds sold $ 6,250 Expenditures: Interest on bonds 37,500 Excess of Expenditures over Revenues (31,250) Other Financing Sources: Premium on bonds 30,000 Interfund transfers in 38,750 Increase in Fund Balances 37,500 Fund Balances, January 1 Fund Balances, December 31 37,500
City of Smithville Street Improvement Bond Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual For the Year Ended December 31, 2023 Budgeted Amounts Variance Actual with Final Original Final Amounts Budget Revenues: Accrued Interest on bonds sold S 6,250 $ 6,250 $ 6,250 $ Expenditures: Interest on bonds 37,500 37,500 37,500 Excess of Expenditures over Revenues (31,260) (31,250) (31,250) Other Financing Sources: Premium on bonds 30,000 30,000 30,000 Interfund transfers in 38,750 38,750 38,750 Increase in Fund Balances 37,500 37,500 37,500 Fund Balances, January 1 Fund Balances, December 31 $ 37,500 $ 37,500 $ 37,500 1.1.1.
City of Smithville Legal Debt Margin Information Calculation of Legal Debt Margin for Fiscal Year 2023 Total Estimated Actual Valuation $ 341,581,818 Maximum general obligation debt, limited to 8% $ 27,326,545 of total valuation Outstanding bonds chargeable to the limit 3,000,000 Less amount reserved for long-term debt Net chargeable to bond limit 3,000,000 Legal Debt Margin - December 31 $ 24,326,545 Note: An additional $6,000,000 has been authorized for issuance over the next the next two years.
City of Smithville Tax Custodial Fund Statement of Changes in Fiduciary Net Position As of December 31, 2023 Additions Property tax collections for other governments Interest and penaltes collections for other governments Total Additions $ 12,811,984 57,654 12,869,638 Deductions Administrative fea Payments of property taxes to other governments Total Deductions Change in Net Position Net Position, January 1 Net Position, December 31 123,477 12,224,159 12,347,636 522,002 1,533,587 2,055,589 $ * Note: Ths amounts do not include additions and related distributions reported in the City of Smithville General Fund and governmental activities.