Analyzing Results of Operations

Using the finance or similarly named department ;link of a city’s Web site, download either the city’s entire comprehensive ;annual financial report (CAFR) or, if possible, just the portion of the CAFR that ;contains the basic financial statements. Print a copy of the government-wide ;statement of activities and a copy of the statement of revenues, expenditures, ;and changes in fund balances—governmental funds, along with the reconciliation ;between these two statements, and respond to the requirements below.

The city manager is concerned that some recently elected members of the city ;council will get a mixed message since the change in net position reported for ;governmental activities is noticeably different from the change in fund balances ;reported on the governmental funds statement of revenues, expenditures, and ;changes in fund balances. The city manager has requested that you, in your role ;as finance director, explain to the city council in clear, easy-to-understand terms ;for which purposes each operating statement is intended and how and why the ;operating results differ.

Required

a. Examine the two operating statements in detail, paying particular attention to ;the lines on which changes in net position and changes in fund balances are ;reported and develop a list of reasons why the two numbers are not the same.

b. Prepare a succinct and understandable explanation of the results of operations ;of this government from the perspective of each operating statement, in terms ;that a non-accountant council member would be able to understand.

http://cfo.dc.gov/page/annual-financial-report-cafr