Reference no: EM133522289

Case Study: Select the King County, Washington COMPREHENSIVE ANNUAL FINANCIAL REPORT. For the Fiscal Year Ended December 31, 2021 and Introduce and explain the composition of the reporting entity with regards to the Name of the primary government and what, if any, component units are included in the CAFR, How many funds the primary government use? and Which funds are major?Also compute ratios and Analyze the financial condition of the city in relation to

Question i. Analysis of revenues and revenue sources with regards to

1. How stable and flexible are the city's revenue sources in the event of adverse economic conditions?

2. Is the revenue base well-diversified, or does the city rely heavily on one or two major sources?

3. Has the city been relying on intergovernmental revenues for an excessive portion of its operating expenditures?

4. What percentage of total expenses of governmental activities is covered by program revenues? by general revenues?

5. how any extraordinary or special items reported in the statement of activities deserve attention?

6. Discuss any other observations you have about revenues that you consider important.

Question ii. Analysis of the reserves of the city with regards to

1. Are the levels of financial reserves (i.e., fund balances, contingency funds, and unrestricted net assets) adequate to meet unforeseen operational requirements or catastrophic events?

2. Is insurance protection adequate to cover losses due to lawsuits or damage to property?

3. Is an adequate amount of cash and securities on hand, or could the city borrow quickly to cover short-term obligations?

Question iii. Analysis of the expenditures and expenses of the city with regards to

1. how any components of expenditures and, at the government-wide level, expenses exhibit sharp growth?

2. Is adequate budgetary control being exercised over expenditures?

3. How does the growth pattern of operating expenditures and expenses over the past 10 years compare with that of revenues?

Question iv. Analysis of the debt burden of the city with regards to

1. What has been the 10-year trend in general obligation long-term debt relative to trends in population and revenue capacity?

2. Are significant debts of other governments (e.g., a school district, a county) supported by the same taxable property? What has been the trend for this "overlapping" debt?

3. Are there significant levels of short-term operating debt? If so, has the amount of this debt grown over time?

4. Are there significant debts (e.g., lease obligations, unfunded pension liabilities, 77 accrued employee benefits) or contingent liabilities?

5. Are any risky investments such as derivatives disclosed in the notes to the financial statements? Are the types of investments adequately explained, and are their risks adequately disclosed?

Question v. What have been the trends in demographic and economic indicators of the city, such as real estate values, building permits, retail sales, population, income per capita, percent of population below the poverty level, average age, average educational level, employment and unemployment, and business licenses?

Question vi. what are the Potential "red flags" or warning signs. of the city with regards to

1. Decline in revenues

2. Decline in property tax collection rate

3. Expenditures increasing more rapidly than revenues

4. Declining balances of liquid resources and fund balances

5. Reliance on nonrecurring (i.e., special item) revenues to support current-period operations

6. Growing debt burden

7. Growth of unfunded pension and other employee-related benefits such as compensated absences and postemployment health care benefits

8. Deferral of needed maintenance on capital plant

9. Decrease in the value of taxable properties, retail sales levels, or disposable personal income

10. Decreasing revenue support from federal or state government

11. Increasing unemployment

12. Unusual climatic conditions or the occurrence of natural disasters

13. Ineffective management and/or dysfunctional political circumstances

Question vii. in summary State your opinion on the financial condition of this governmental unit and should be supported with the results of your analysis.