ANALYZING THE FINANCIAL CONDITION OF WALDEN HEIGHTS

TO PREPARE

Using the most recent financial report (ACFR) for Walden Heights, analyze the following elements:

What were the major industries or sectors of the economy, as presented in the Introductory section?

Note two interesting things you learned from the MD&A section about the financial condition of the city. Did anything surprise you?

If this number is negative, this may, or may not, indicate financial distress, and should be examined further.

Review the Statement of Activities and consider each of the functions/programs as a percentage of the total government spending.

Write a paper in which you include the following:

Statement of Activities Assessment (1 paragraph)

Based on your assessment of the Statement of Activities, create a pie chart that shows each of the functions/programs as a percentage of the total government spending. (Note: Use the information in the Primary Government section only [through the “Total Primary Government” line item]). Include the pie chart you created. What conclusions can you draw about the city’s priorities?

Conclusion (1–2 paragraphs)

Based on a synthesis of everything you reviewed about the city’s financial position in the previous year, what changes would you recommend for the upcoming budget?

Walden University, LLC. (2022).

Revenue and expendituresLinks to an external site.

[Interactive media]. Walden University Blackboard.

https://waldenu.instructure.com

Note: This interactive media discusses how government accounting differs from other forms of accounting, the concept of solvency, and components of the Annual Comprehensive Financial Report (ACFR, formerly the CAFR).Also note:Included in this week’s Learning Resources is a PDF document containing the content found in this interactive media and is made available for students who might prefer a PDF format.

Document:

Revenue and Expenditures (PDF)

Download Revenue and Expenditures (PDF)

Note: This PDF contains the content found in the interactive media in this week’s Learning Resources and is made available for students who might prefer a PDF format.

Texas Comptroller of Public Accounts. (2013, September 11).

Explanation of a comprehensive annual financial report (CAFR)Links to an external site.

[Video]. YouTube.      Note: This media program is approximately 4  minutes.

ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Fiscal Year Ended December 31, 202W
Walden Heights, Nebraska, USA
Where History Meets the Future!
CITY OF WALDEN HEIGHTS, NEBRASKA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Fiscal Year Ended December 31, 202W
SUBMITTED BY:
CITY PLANNING OFFICE
This document is a fictitious and truncated version intended for academic purposes only.
It is not intended to represent an actual and comprehensive Annual Comprehensive Financial Report.
1
July 30, 202X
TO THE HONORABLE MAYOR, MEMBERS OF THE COUNCIL, AND
CITIZENS OF THE CITY OF WALDEN HEIGHTS:
We are pleased to present the Annual
Comprehensive Financial Report of the City of
Walden Heights for the fiscal year ended December
31, 202W, to the City Council, the Mayor and the
citizens of Walden Heights.
This report provides a complete and accurate picture
of the City’s financial status and fulfills our continuing
disclosure responsibilities in accordance with
governmental reporting standards. Our ability to
manage the City’s fiscal affairs and provide a full
disclosure of the City’s fiscal condition is exhibited by
the unmodified audit opinion that follows.
Management assumes full responsibility for the
accuracy of the data found in this report, and the
completeness and reliability of the presentation,
including all disclosures.
Both the City Charter and Nebraska State law
require an annual audit of the City’s funds and
accounts be made by a recognized independent and
qualified accountant covering all financial
transactions, affairs, and financial
condition of the City, with the audit report published
within six months after the close of the fiscal year.
The goal of the independent audit was to obtain
reasonable assurance about whether the financial
statements of the City are free from material
misstatement. The City selected Garrett, Castleberry
& Company, Certified Public Accountants, to perform
the annual independent financial statement audit for
fiscal year 202W.
2
Generally accepted accounting principles require
that management provide a narrative introduction,
overview, and analysis to accompany the basic
financial statements in the form of Management’s
Discussion and Analysis (MD&A). This letter of
transmittal is designed to complement the MD&A
and should be read in conjunction with it. The
Walden Heights MD&A can be found immediately
following the auditor’s report in the financial
section of this report.
PROFILE OF THE GOVERNMENT
The City of Walden Heights, the county seat of
Haines County, is located along the Suzanne
River near the Oglala National Grassland of
northwest Nebraska. Walden Heights was
incorporated December 21, 1815 and was
founded by the first textile makers of the United
States. According to the US Bureau of the
Census, the estimated population of Walden
Heights has grown from 5,222 (2010) to 6,534
(202W). Demographics are 62% Caucasian; 12%
African American; 19% Hispanic; 2% Native
American; 5% Asian, and those identifying as
more than one race 10%.
LOCAL ECONOMY
Today, the city fascinates tourists and students of
all ages as they wander through its historical and
environmental attractions,
.
including a scenic hiking trail between the Suzanne
River and Freyya’s Organic Strawberry Farm.
Surrounded by the lush fields of corn, soybeans, and
sugar beets tended by local area farmers, this trail
not only delights visitors with its scenic beauty but
reminds them of the importance of agriculture to
Walden Heights and the Cornhusker State. Many
Walden Heights farm owners have taken the lead on
sustainable farming practices, and the DDA has
been instrumental in promoting cutting edge projects
to promote growth in this area.
Local citizens have transformed their Victorian
homes – including 15 listed on the National Register
of Historic Places – into small bed and breakfast inns
to accommodate a steady influx of visitors. Each
month, the Walden Heights Gazette selects a
different inn to tell its unique story. On a much larger
scale, the newly restored Henry David’s Hotel Resort
and Conference Center has been earning 5-star
reviews for excellence complemented by the nearby
Kelsey’s Pub & Grill, also having a 5-star rating for
local craft beers and sandwiches.
One of the city’s most prized capital assets is the [to
be named] Egyptian museum, curated by Nizam El
Ghazaly and housed in one of the city’s oldest
buildings. In addition to a few contemporary
Egyptian arts and crafts and replicas of ancient
designs, the museum displays rare Egyptian coins,
scarabs, gold jewelry, Coptic textiles, and Egyptian
carpets featuring symbols of lotuses, flowers, and
other motifs in a tradition that reaches back to 16th
century Cairo.
Walden Heights is also home to the Boden Hilltop
Academy, a private coeducational preparatory
school founded in 2007 to offer a high-quality
alternative to New Harbor North High School across
the river from our city. In addition to its reputation for
academic excellence, the Academy integrates
community service into the curriculum.
An energetic local non-profit organization is the
Support Alliance for Depression, Anxiety & Bipolar
(SADAB) of Walden Heights. They serve the
community by providing free, peer-led support
groups for those living with mood disorders such as
depression, anxiety, bipolar, PTSD, etc. Additionally,
they maintain the state’s largest mood-disorderspecific resource library, with nearly 200 books and
electronic resources. They’ve served Walden
3
Heights and the surrounding area for over 25
years and are contemplating a strategic
partnership with another local non-profit, the
Harbor House Homeless Shelter. Together they
hope to expand outreach to those experiencing
homelessness and mental health issues.
The city’s leadership collaborates with the Historic
Preservation Commission, the Boden Academy
college preparatory school, and the Walden
Heights Chamber of Commerce, to promote the
city’s historic textile museums, its semi-annual
arts and crafts fairs, the Summer Strawberry Fest,
and tours of the Brogan Dam that was built in
1935, four miles to the north of the city.
Compared to many mid-sized cities in the United
States, Walden Heights has experienced steady
growth and prosperity. There was a decline in
tourism during the COVID-19 pandemic, and the
city’s tax base and economic well-being are
strongly tied to changes in this sector of the
economy. If these declines persist, our City’s
revenue streams and employment rates may be
vulnerable.
The long-term decline in unemployment rates took
a turn upward in 2020 due to the economic impact
of the Coronavirus Pandemic, with unemployment
rates climbing to 4% in 202W Unemployment.
Unemployment (Haines County)
202W 4%
201V 2%
201U 3%
201T 4%
201S 5%
201R 5%
201Q 7%
201P 8%
LONG-TERM FINANCIAL PLANNING
Unassigned fund balance in the General
Fund is $1,588,994 or 41 percent of the 202X
annual revenue budget. The City maintains these
funds to provide cash flow throughout the year
and as a buffer against unforeseen events.
RELEVANT FINANCIAL POLICIES
The Council has adopted a comprehensive set of
financial policies which guide and direct the Finance
Department throughout the year. These policies
address fund balances, the use of one-time
revenues, issuance of public debt, purchasing, and
procurement, cash and investment management,
accounting, practices and water and sewer billing.
These policies were designed to provide assurance
that the City is able to meet its fiduciary responsibility
to its citizens. The Council reviews and updates
these policies on an ongoing basis.
MAJOR INITIATIVES
The Downtown Development Authority of
Western Heights (DDA), a legally separate entity,
was created by the city to stimulate and sustain
economic development in Downtown Walden
Heights. The DDA works closely with downtown
businesses and city leaders to ensure continued
growth and investment into the downtown area
while preserving its unique heritage.
The City Council will involve local citizens and
stakeholders in public sessions to discuss and
debate future plans.
A recent inspection of Brogan Dam was conducted
by the State’s Dam Safety Officials and the U.S.
Army Corps of Engineers, focused on infrastructure,
property, and the natural environment downstream.
The Mayor and City Council members will continue
to collaborate with the State’s Dam Safety Officials
and the U.S. Army Corps of Engineers on a plan that
includes strengthening the levee system and
improvements to fulfill the requirements of the
National Dam Rehabilitation Act (NDRA) of 2016. An
NDRA grant program can provide some limited
funding to strengthen the levee system, and city
leaders, including members of the City Council, will
consider cost-effective solutions to pay for any
additional costs as well as funding a new “green
initiative” that can serve as a model of environmental
protection for the region.
Respectfully submitted,
Derrick Willard
City Comptroller
.
____________________________________________________________________________
100 STOUT ROAD • WALDEN HEIGHTS, NE 69343 • PHONE (308) 999-9999
WWW.WALDENHEIGHTS.GOV
4
Garrett, Castleberry & Company, LLC
Accounting & Business Advisors I Certified Public Accountants
Honorable Mayor and
Members of the City Council
Walden Heights, Nebraska
Report on the Financial Statements
We have audited the financial statements of the governmental activities, the business-type activities, the
discretely presented component unit, major funds, and the aggregate remaining fund information of
Walden Heights, Nebraska, as of and for the year ended December 31, 202W.
Management’s Responsibility for the Financial Statements
In accordance with accounting principles generally accepted in the United States of America,
Management is responsible for the preparation and fair presentation of these financial statements,
including the design, implementation, and maintenance of internal control relevant to the preparation and
fair presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States, including planning and performing the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement. The
auditor uses their judgment to identify the procedures that will be performed to obtain audit evidence
about the amounts and disclosures in the financial statements. In making those risk assessments, the
auditor considers internal control relevant to the City’s preparation and fair presentation of the financial
statements in order to design appropriate audit procedures. Accordingly, we express no such opinion. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, the discretely
presented component unit, major funds, and the aggregate remaining fund information of the city of
Walden Heights, Nebraska, as of December 31, 202W, and the respective changes in financial position
and, where applicable, cash flows thereof, and the respective budgetary comparison of the General Fund
for the year then ended in accordance with accounting principles generally accepted in the United States
of America.
5
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 202W
As management of the City of Walden Heights, the following represents a narrative overview and analysis
of the financial activities of the city for the fiscal year ended December 31, 202W. Readers are
encouraged to consider this information in conjunction with any additional basic financial statements and
other information that may be provided. All amounts, unless otherwise indicated, are expressed in whole
dollars.
This Management’s Discussion and Analysis (MD&A) is a fictitious, truncated version intended
for academic purposes only and not intended to represent an actual and comprehensive MD&A.
The section titles below represent the typical categories included in an MD&A.
View the Statement of Net Position and Statement of Activities below.
FINANCIAL HIGHLIGHTS
Government Wide Financial Statements
Fund Financial Statements
Debt Obligations
OVERVIEW OF THE FINANCIAL STATEMENTS
Government Wide Financial Statements
Statement of Net Position
Statement of Activities
Fund Financial Statements
Governmental Funds
Proprietary Funds
Notes to the Financial Statements
Other Information
GOVERNMENT-WIDE FINANCIAL ANALYSIS
6
WALDEN HEIGHTS, NEBRASKA
STATEMENT OF NET POSITION
December 31, 202W
ASSETS
Current assets
Cash and cash
equivalents
Restricted Assets
Cash and cash
equivalents
Receivables (net)
Accounts
Taxes
Fines
Intergovernmental
Inventory
Pre-paid items
Internal balances
Total Current
Assets
Noncurrent assets
Capital Assets
Non-depreciable
Depreciable (net)
Total noncurrent
Assets
Total Assets
Primary Government
Component
Units
Governmental
Activities
Business-type
Activities
Total
Downtown
Development
Authority
4,744,584
4,813,808
9,558,392
368,708
0
378,077
378,077
0
4,251
175,427
48,522
28,275
0
42,669
(109,839)
801,507
0
0
0
142,541
192,782
(109,839)
805,759
175,427
48,522
28,275
142,541
235,451
0
0
0
0
0
0
2,924
0
4,933,889
6,218,876
11,372,444
371,632
2,241,614
5,867,569
8,109,183
313,085
30,819,056
31,132,141
5,372,471
36,686,626
42,059,097
0
0
0
13,043,072
37,351,017
53,431,541
371,632
367,195
753,253
36,374
2,621,577
2,621,577
0
2,988,772
3,374,830
36,374
50,388
3,519
0
104
158,247
10,500
1,111
104
5,445
0
0
0
DEFERRED OUTFLOWS of RESOURCES
Deferred outflows
386,057
of resources –
pension
Deferred charges on
0
refunding
Total deferred
386,057
outflows of
resources
LIABILITIES
Current liabilities
Payables
Accounts
Intergovernmental
Deposits
Interest
107,858
6,981
1,111
0
7
Accrued payroll
liabilities
Compensated
absences
Notes payable
Capital leases payable
Liabilities payable from
restricted assets
Interest payable
Customer deposits
payable
Revenue bonds
payable
Total current
liabilities
Noncurrent liabilities
Net pension liability
Compensated
absences
Notes payable
Capital leases
payable
Revenue bonds
payable
Total noncurrent
liabilities
Total liabilities
72,603
46,291
118,894
5,689
74,790
61,866
136,656
0
0
0
164,366
27,365
164,366
27,365
0
0
0
0
68,491
187,777
68,491
187,777
0
0
0
630,000
630,000
0
263,344
1,240,171
1,503,515
11,134
606,780
19,882
600,773
16,445
1,207,554
36,328
57,448
0
0
0
5,328,250
60,880
5,328,250
60,880
0
0
0
21,145,851
21,145,851
0
626,663
27,152,200
27,778,864
57,448
890,008
28,392,372
29,282,380
68,583
87,319
163,638
7,582
8,073,282
9,214,777
17,288,060
0
0
618,843
4,025,153
12,717,279
83,999
0
5,560,965
14,859,743
83,999
618,843
9,586,119
27,577,023
0
0
331,840
331,840
DEFERRED INFLOWS of RESOURCES
Deferred inflows
76,319
of resources –
pension
NET POSITION
Net investment in
capital assets
Restricted for:
Debt service
Capital outlay
Unrestricted
Total net
position
8
WALDEN HEIGHTS, NEBRASKA
STATEMENT OF ACTIVITIES
December 31, 202W
Program Revenues
Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions
Net
(Expense)
Revenue
(60,750)
160,078
0
0
$(1,103,722)
0
0
0
0
148,562
0
29,610
0
0
107,019
18,565
0
0
0
1,380,368
0
(35,244)
(225,983)
9,764
(49,867)
0
53,286
0
0
(661,428)
(60,750)
391,536
125,584
1,380,368
(1,066,486)
4,747,284
60,750
4,722,797
11,576
0
(73,660)
771,705
0
842,344
4,099
0
74,737
5,518,990
60,750
5,565,141
15,676
0
1,077.30
9,543,717
0
5,956,678
141,260
1,380,368
(2,065,409)
278,722
0
0
1,296
0
(277,426)
Expenses
FUNCTION/ PROGRAMS
Primary
Government
Governmental
activities
General
1,323,556
Government
Judicial
183,806
Public Safety
333,002
Public Works
1,418,779
Culture and
49,867
Recreation
Housing and
714,714
Development
Total
Governmental
4,024,726
activities
Business-type
Activities
Water and
Sewage
Solid Waste
Total
business-type
activities
Total primary
government
Component
Unit
Downtown
Development
Authority
Housing and
Development
Change in net position
Net (expense) revenue
General revenues
Taxes
Property
Sales
Franchise
Insurance Premium
Intangibles
Alcoholic beverages
Indirect
Costs
Governmental
Activities
2,066,486
1,148,097
1,012,223
467,064
356,310
26,182
181,382
9
Primary Government
Business-Type
Activities
Total
1,077
(2,065,409)
0
0
0
0
0
0
1,148,097
1,012,223
467,064
356,310
26,182
181,382
Component
Unit
(277,426)
0
0
0
0
0
0
Occupational
Hotel/Motel
Other
Payments from Walden Heights
Investment income (loss)
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position – beginning
Net position – ending
117,484
316,596
7,581
0
40,158
46,881
(277,446)
3,442,517
1,376,030
1,134,124
12,717,279
10
0
0
0
0
41,016
0
277,446
318,463
319,540
14,540,202
14,859,743
117,484
316,596
7,581
0
81,175
46,881
0
3,760,980
1,695,571
25,881,452
27,577,023
0
0
0
252,917
0
1,674
0
254,591
(22,835)
354,676
331,840
1
ANALYZING THE FINANCIAL
CONDITION OF WALDEN HEIGHTS
As you continue to grow and develop your
store of financial knowledge and experience, this week you examine several sections of an
important government financial document known as the Annual Comprehensive Financial
Report (ACFR). This is a recent name change, so in the Learning Resources you may see it
referred to as the Comprehensive Annual Financial Report (CAFR).
An ACFR provides taxpayers with information about the government’s financial position
for the previous fiscal year. In the budget cycle, these reports are published during the
audit/assessment phase, and they provide historical information about how monies were
spent. An ACFR is divided into 4 sections:
•
•
•
•
Introductory
Financial
Statistical
Other Reporting
This week, you will learn about ACFR components and what valuable information can be
obtained from them. You will engage with the city of Walden Heights as an introduction to
the ACFR and use that foundation to select a real-world city, such as your hometown, to
further explore an ACFR. Begin this week’s visit to Walden Heights at the local television
station and view their broadcast transcript about the release of the ACFR from the
previous administration.
RESOURCES
Be sure to review the Learning Resources before completing this activity.
Click the weekly resources link to access the resources.
2
WEEKLY RESOURCES
Required Readings
Financial Statements Resources
•
Mikesell, J. L. (2018). Fiscal administration (10th ed.). Cengage Learning.
o
Chapter 2, “The Logic of the Budget Process”
Note: Read only the following section:
▪
Comprehensive Annual Financial Report (CAFR) and Monitoring Financial
Performance (pp. 84–87)
•
Capital Business Solutions. (2018, September 3). 3 major differences between
government and nonprofit accountingLinks to an external
site.. https://www.capitalbusiness.net/resources/3-major-differences-governmentnonprofit-accounting/
•
Document: Annual Comprehensive Financial Report (ACFR) for Walden Heights
(PDF)Download Annual Comprehensive Financial Report (ACFR) for Walden Heights (PDF)
MS Excel Resource
•
Excel Easy. (n.d.). Pie chartLinks to an external site.. https://www.exceleasy.com/examples/pie-chart.html
Note: This resource explains how to create a pie chart with title, data labels, and a
legend.
Writing Resource
•
Walden Writing Center. (n.d.). Walden templates: OverviewLinks to an external site..
https://academicguides.waldenu.edu/writingcenter/templates
Note: As you access this site, make sure to review the video related to how to use the
Course Paper template. Once you review, you can download the Graduate APA
Course Paper Template for this week’s Assignment.
Required Media
•
Walden University, LLC. (2022). Revenue and expendituresLinks to an external
site. [Interactive media]. Walden University Blackboard.
https://waldenu.instructure.com
Note: This interactive media discusses how government accounting differs from other
forms of accounting, the concept of solvency, and components of the Annual
Comprehensive Financial Report (ACFR, formerly the CAFR).
3
Also note: Included in this week’s Learning Resources is a PDF document containing
the content found in this interactive media and is made available for students who
might prefer a PDF format.
•
Document: Revenue and Expenditures (PDF)Download Revenue and Expenditures
(PDF)
Note: This PDF contains the content found in the interactive media in this week’s
Learning Resources and is made available for students who might prefer a PDF
format.
•
Texas Comptroller of Public Accounts. (2013, September 11). Explanation of a
comprehensive annual financial report (CAFR)Links to an external site. [Video].
YouTube. https://www.youtube.com/watch?v=jCX1FaEBpRs
Note: This media program is approximately 4 minutes.
Walden Heights Resources
•
Walden University, LLC. (2022). Walden HeightsLinks to an external site. [Multimedia].
Walden University Blackboard. https://waldenu.instructure.com
Go to the Walden Heights interactive city and click on the Walden Heights City
Planning Office. Review the most recent “Annual Comprehensive Financial Report
(ACFR) for Walden Heights” and “ACFR News Release Script” video.
TO PREPARE
•
Using the most recent financial report (ACFR) for Walden Heights, analyze the following
elements:
o What were the major industries or sectors of the economy, as presented in the
Introductory section?
o Was an independent audit conducted, and in the auditor’s opinion, were the financial
statements presented fairly?
o Note two interesting things you learned from the MD&A section about the financial
condition of the city. Did anything surprise you?
o Review the Statement of Net Position, and consider the following:
▪ What percentage of the assets was liquid (cash) and what percent was capital?
▪ What percentage of the total liabilities was pension-related?
▪ What was their Unrestricted Net Position?
▪ If this number is negative, this may, or may not, indicate financial distress, and
should be examined further.
o Use both ratios provided in this week’s interactive media to assess the city’s solvency.
▪ The Liabilities-to-Assets Ratio: Divide total liabilities by total assets.
▪ The Liabilities-to-Net-Position Ratio: Divide total liabilities by net position.
4
Review the Statement of Activities and consider each of the functions/programs as a
percentage of the total government spending.
Download and use the Graduate APA Course Paper Template for this week’s Assignment,
accessed from the Learning Resources.
o
•
ASSIGNMENT (1–2 PAGES, NOT INCLUDING TITLE
PAGE AND REFERENCES PAGE(S)):
Write a paper in which you include the following:
•
Introduction (1–2 paragraphs)
Introduce the city of Walden Heights, including its major industries/sectors and two
interesting facts about its financial condition.
•
Statement of Net Position Assessment (1–2 paragraphs)
Based on your assessment of the Statement of Net Position, how would you
describe the city’s solvency? Include the results of your computations.
•
Statement of Activities Assessment (1 paragraph)
Based on your assessment of the Statement of Activities, create a pie chart that
shows each of the functions/programs as a percentage of the total government
spending. (Note: Use the information in the Primary Government section only
[through the “Total Primary Government” line item]). Include the pie chart you
created. What conclusions can you draw about the city’s priorities?
•
Conclusion (1–2 paragraphs)
Based on a synthesis of everything you reviewed about the city’s financial position in
the previous year, what changes would you recommend for the upcoming budget?
Be sure to support your Assignment with specific references. In addition to the Learning Resources, search
the Walden Library and/or the internet for peer-reviewed articles to support your Assignment. Use proper
APA format and citations, including those in the Learning Resources.
1
Title of the Paper in Full
Student Name
Program Name or Degree Name (e.g., Master of Science in Nursing), Walden University
COURSE XX: Title of Course
Instructor Name
Month XX, 202X
2
Title of the Paper in Full
AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq
rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj
kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA
bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt
uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll
mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc
dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv
wwww xxxx yyyy zzzz.
Level 1 Heading
AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq
rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj
kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA
bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt
uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll
mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc
dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv
wwww xxxx yyyy zzzz.
Level 2 Heading
AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq
rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj
kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA
bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt
3
uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll
mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc
dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv
wwww xxxx yyyy zzzz.
Another Level 2 Heading
AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq
rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj
kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA
bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt
uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll
mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc
dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv
wwww xxxx yyyy zzzz.
Level 3 Heading
AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq
rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj
kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA
bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt
uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll
mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz.
4
Level 4 Heading. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm.
AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss
tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll
mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz.
Level 4 Heading. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm.
AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss
tttt uuuu vvvv wwww xxxx yyyy zzzz.
Level 3 Heading
AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq
rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj
kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA
bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt
uuuu vvvv wwww xxxx yyyy zzzz.
Level 1 Heading
AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq
rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj
kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA
bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt
uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc dddd eeee ffff gggg hhhh iiii jjjj kkkk llll
mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv wwww xxxx yyyy zzzz. AAA bbb cccc
dddd eeee ffff gggg hhhh iiii jjjj kkkk llll mmmm nnnn oooo pppp qqqq rrrr sssss tttt uuuu vvvv
wwww xxxx yyyy zzzz.
5
References
(Note that the following references are intended as examples only.)
American Counseling Association. (n.d.). About us. https://www.counseling.org/about-us/aboutaca
Anderson, M. (2018). Getting consistent with consequences. Educational Leadership, 76(1), 2633.
Bach, D., & Blake, D. J. (2016). Frame or get framed: The critical role of issue framing in
nonmarket management. California Management Review, 58(3), 66-87.
https://doi.org/10.1525/cmr.2016.58.3.66
Burgess, R. (2019). Rethinking global health: Frameworks of Power. Routledge.
Herbst-Damm, K. L., & Kulik, J. A. (2005). Volunteer support, marital status, and the survival
times of terminally ill patients. Health Psychology, 24(2), 225–229.
https://doi.org/10.1037/0278-6133.24.2.225
Johnson, P. (2003). Art: A new history. HarperCollins. https://doi.org/10.1037.0000136-000
Lindley, L. C., & Slayter, E. M. (2018). Prior trauma exposure and serious illness at end of life:
A national study of children in the U.S. foster care system from 2005 to 2015. Journal of
Pain and Symptom Management, 56(3), 309–317.
https://doi.org/10.1016/j.jpainsymman.2018.06.001
Osman, M. A. (2016, December 15). 5 do’s and don’ts for staying motivated. Mayo Clinic.
https://www.mayoclinic.org/healthy-lifestyle/adult-health/in-depth/5-dos-and-donts-forstaying-motivated/art-20270835
Sue, D. W., & Sue, D. (2016). Counseling the culturally diverse: Theory and practice (7th ed.).
Wiley.
6
Walden University Library. (n.d.). Anatomy of a research article [Video].
https://academicguides.waldenu.edu/library/instructionalmedia/tutorials#s-lg-box7955524
Walden University Writing Center. (n.d.). Writing literature reviews in your graduate
coursework [Webinar].
https://academicguides.waldenu.edu/writingcenter/webinars/graduate#s-lg-box-18447417
World Health Organization. (2018, March). Questions and answers on immunization and vaccine
safety. https://www.who.int/features/qa/84/en/
MMPA 6431: Finance and Budgeting for the Public Sector
Week 4 Interactive: Revenue and Expenditures
Financial Reports: The ACFR and Its Components
As you continue to grow and develop your store of financial knowledge and experience, this week you will begin
examining several sections of an important government financial document known as the Annual Comprehensive
Financial Report (ACFR). This is a recent name change, so in the Learning Resources it is sometimes referred to as the
Comprehensive Annual Financial Report (CAFR).
An Annual Comprehensive Financial Report (ACFR) is an important government financial document that provides
taxpayers with information about the government’s financial position for the previous fiscal year. In the Budget Cycle,
these reports are published during the audit/assessment phase and provide historical information about how monies were
spent.
© 2022 Walden University, LLC
Page 1 of 5
MMPA 6431: Finance and Budgeting for the Public Sector
Exploring the Introductory and Financial Sections of the ACFR
An Annual Comprehensive Financial Report (ACFR) is divided into 4 sections: Introductory, Financial,
Statistical, and Other Reporting.
This interactive focuses on the subsections of the first two ACFR sections (i.e., Introductory and Financial), specifically the
following subsections: introductory subsection, Auditor’s Opinion, Management Discussion & Analysis (MD&A), Statement
of Net Position, and Statement of Activities.
Read the valuable information that can be learned from each of the following subsections of an ACFR.
© 2022 Walden University, LLC
Page 2 of 5
MMPA 6431: Finance and Budgeting for the Public Sector
Introductory subsection
The Introductory section typically is addressed to the citizens, residents, and taxpayers.
Auditor’s Opinion
This subsection is contained in the Financial Section of the ACFR includes whether the auditor believes the financial
documents have been produced and presented fairly.
Ideally, a government’s ACFR should be externally and independently audited, since having an internal audit by a
government official can diminish the trustworthiness of the report. The auditor’s opinion should include the words
“presents fairly” and “in accordance with GAAP.”
Management Discussion & Analysis (MD&A)
The Management Discussion & Analysis (MD&A) is also a subsection of the Financial Section of the ACFR. It is a
narrative written by government officials and is considered to be supplementary information, and thus is not audited.
It often includes charts, graphs, and tables to improve readability, and should include a discussion of conditions that are
expected to significantly impact the government’s financial position.
Statement of Net Position
Contained in the Financial Section of the ACFR, the Statement of Net Position subsection is essentially the government
version of the non-profit Statement of Financial Position, also known as the Balance Sheet. This audited statement
contains a very useful number known as the Unrestricted Net Position. This number can provide insights into the
government’s current solvency, and whether they may be pushing current costs onto future taxpayers.
If the Unrestricted Net Position is negative, this could be a sign of financial distress. If the Liabilities-to-Net-Position ratio is
greater than 1.0, then there is a burden being placed onto future taxpayers.
Statement of Activities
Also contained in the Financial Section of the ACFR, the Statement of Activities subsection provides information about
revenues and expenses, broken down by program. A reader can compare the costs against the revenues for each
program, and how the government chose to finance any difference.
© 2022 Walden University, LLC
Page 3 of 5
MMPA 6431: Finance and Budgeting for the Public Sector
Knowledge Check
1. Of the ACFR documents listed below, which two are audited?
a. Statement of Net Position
b. Management Discussion & Analysis (MD&A)
c. Auditor’s Opinion
d. Statement of Activities
Answer Key: a. Statement of Net Position and d. Statement of Activities
Interpreting the Financial Statements
When reviewing the two financial statements—the Statement of Net Position and the Statement of Activities—you will see
a couple of column headings that may need some clarification. These are the headings for Business-type Activities and
for Component Units, which are alongside the heading for Government Activities.
Read the following descriptions of the two headings.
Business-type Activities
Government-run organizations financed predominantly by user fees rather than by public funds such as taxes.
Component Units
An organization that is legally distinct from the government, yet the government still maintains financial
accountability. Includes Public Benefit Corporations and Public Authorities.
© 2022 Walden University, LLC
Page 4 of 5
MMPA 6431: Finance and Budgeting for the Public Sector
Knowledge Check
Read the example in the first column and decide whether it represents a business-type activity or a component unit.
Check your answers using the Answer Key below.
Examples
Municipal Golf Course
Waste-collection Service
Municipal Airport
Public Utilities
School District
Housing Authority
Business-type Activity
Component Unit
Business-type Activity
X
X
Component Unit
Answer Key:
Examples
Municipal Golf Course
Waste-collection Service
Municipal Airport
Public Utilities
School District
Housing Authority
© 2022 Walden University, LLC
X
X
X
X
Page 5 of 5