April 19, 2015
Assignment 4: Examine the C.A.F.R.
A financial analysis allows you to evaluate a CAFR for
completeness and indicators of relative financial strength. Using the CAFR
obtained in Week 1, write a paper answering the questions in exercises and
problems in Chapter 10 of your textbook: Accounting for Governmental &
Nonprofit Entities, by: Susan C. Kattelus, Jacqueline L. Reck,& Earl R.
Wilson (2010), (10-1) to conduct a financial analysis of your selected CAFR.
I have
chosen to analyze, the City of Gainesville, FL U.S.A. C.A.F.R., for the year,
2014. The purpose of this assignment, therefore, is to analyze the: “financial
condition,” of the City of Gainesville, FL U.S.A., based on the information
reported, in the city’s last C.A.F.R. report (Kattelus, Reck,& Wilson,
2010, p. 431). According to: Kattelus, Reck,& Wilson (2010): “financial
condition, is broadly defined as a city’s ability to provide an adequate range
of services on a continuing basis (p. 431).”
In
regards, to maintaining adequate continuing service levels, the: “financial
condition” review, (1) determines whether or not, the City of Gainesville, FL
U.S.A., has successfully constructed a budget, that earns enough revenue, to
cover existing expenses, and, if the projection, of the budget, into future
financial reporting periods, will continue to provide, enough revenue, to
continue to cover, the City of Gainesville, FL U.S.A. future expenses, as well
(Kattelus, Reck,& Wilson, 2010, p. 431). In addition, the: “financial condition”
review, of the City of Gainesville, FL U.S.A., (2) is supposed to be able to
determine, if the City of Gainesville, FL U.S.A., is doing well enough
financially, to: “withstand major economic disruptions (Kattelus, Reck,&
Wilson, 2010, p. 431).” Finally, the: “financial condition” review, of the City
of Gainesville, FL U.S.A., (3) is supposed to demonstrate, through their choice
of funds, and money allocations, that the city of Gainesville, FL U.S.A., is
able to: “meet the demands of a changing society in a dynamic economy
(Kattelus, Reck,& Wilson, 2010, p. 431).”
a)
Analysis
of revenues and revenue sources:
1. How
stable and flexible are the city’s revenue sources in the event of adverse
economic conditions?
The City of Gainesville, FL U.S.A., according to the 2014 C.A.F.R., does
not have stable, or flexible revenue resources (p. 155). The City of
Gainesville, FL U.S.A., according to the 2014 C.A.F.R., relies heavily, on only
two sources, of: own-source revenues-which are: property taxes, and revenues
from Gainesville Regional Utilities (p. 155). If there is a downturn in home
sales, and/or, if homes are depreciated for some reason, and lose their
property value-for instance, if home owners fail to care properly for their
property, and neglect their homes, then re-sale of the property will decrease,
thus, decreasing property taxes on the home. Additionally, many people are
relocating outside of the immediate Gainesville, FL area, because, the cost of
utilities in Gainesville, FL, are way too high. The City of Gainesville, FL
U.S.A., needs additional own-source revenue resources, to diversify, the
revenue base, for the City of Gainesville, FL.
2. Is
the revenue base well diversified, or does the city rely heavily on two major
sources?
No, according to the City of Gainesville, FL, C.A.F.R. (2014), the City
of Gainesville, FL, U.S.A., does not have a diversified revenue base (p. 155).
The City of Gainesville, FL U.S.A., only has two main revenue resources,
according to the City of Gainesville, FL U.S.A., C.A.F.R. (2014), and they are
listed as: property tax, and Gainesville Regional Utility, utility revenues (p.
155).
Homes, in the City of Gainesville, FL
U.S.A., are over-priced, and are often times for sale, way above market
value-which, in turn, raises the property taxes, of the homes sold.
Additionally, many people who work in Gainesville, FL-even people who work for
the City of Gainesville, FL choose to live outside of the City of Gainesville,
FL U.S.A., Gainesville Regional Utilities service area, because the utility
costs, in the City of Gainesville, FL, are astronomical. I called around,
before moving into an apartment, to find out how much utilities were running in
Gainesville, FL U.S.A., for the average 3 bed room home, and I was told by a
representative at Gainesville Regional
Utilities, that the average utility bill, is: $ 350.00 dollars U.S.D. .
When I complained to a local realtor, about the high price of utilities in
Gainesville, FL, he said, that many people complain, and, it has not made a
significant difference, in the price of utilities, in Gainesville, FL. The
realtor told me, that Gainesville, FL, has some of the highest utility rates,
within the state of Florida.
3. Has
the city been relying on intergovernmental revenues for an excessive portion of
its operating expenditures?
The city of Gainesville, FL appears to
rely heavily, on intergovernmental revenues, according to the information
provided, in the City of Gainesville, FL U.S.A., C.A.F.R., of 2014 (p. 185-187).
The City of Gainesville, FL, U.S.A., according to the C.A.F.R., from 2014,
spent a total of: $ 33, 666, 258 in Federal awards and State Financial
Assistance, as listed, on page 186. Then, a separate schedule, of total
expenditures, by the City of Gainesville, FL U.S.A., of Federal awards and
State Financial Assistance, in the City of Gainesville, C.A.F.R., of 2014,
lists on page 187, the total expenditures being: $4,499,076. There are a few
problems, with the information, provided in the City of Gainesville, FL
C.A.F.R. (2014), in regards to, the total amount, of: Federal and State
Financial Assistance, that is listed, which, I will explain further, in my
report, at the end of this research paper.
4.
What
percentage of total expenses of governmental activities is covered by program
revenues? By what general revenues?
Information, presented on page 5, of
the City of Gainesville, FL U.S.A. C.A.F.R., of 2014, indicates, that the City
of Gainesville, FL U.S.A., is not earning enough in revenues, to cover
expenses. The information, on page 5, of the City of Gainesville, FL U.S.A.,
C.A.F.R., of 2014, indicates, that there is a budget deficit, after the city’s
expenses, are subtracted, from the city’s revenues, and then, for the City of
Gainesville, FL U.S.A., to cover the deficit, that was generated by excessive
expenses, money is moved, from: “other financial sources”-including debt
financing, which is intended for other uses, to cover the budget deficit.
5) Do any extraordinary or special
items reported in the statement of activities deserve attention?
Yes, the financial statement, on page
5, of the City of Gainesville, FL U.S.A., C.A.F.R., from 2014, requires
attention. Due to the fact, that the revenues, do not cover the expenses, and,
money is moved out of an “other expenses fund,” to cover the budget deficit, I
suspect, accounting fraud, within the City of Gainesville, FL. I discuss the
reasons why, I suspect accounting fraud, within the City of Gainesville, FL,
more fully, in the research report, at the end of this research paper.
b) Analysis
of reserves:
1) Are
the levels of financial reserves adequate to meet unforeseen operational
requirements or catastrophic events?
2) Is
insurance protection adequate to cover losses due to law suits or damage to
property?
3) Is
an adequate amount of cash and securities on hand, or the city borrow quickly
to cover short-term obligations?
The answer, to all of the above, analysis of reserves questions, is as
follows: The City of Gainesville, FL U.S.A., according to the C.A.F.R., from
2014, is broke, and over-leveraged (p. 5). The City of Gainesville, FL U.S.A.,
has to borrow money, from “other accounts and funds,” and the City of
Gainesville, FL U.S.A., had to also take out additional loans and debt, in
order to cover the budget deficit, in 2014 (p. 5). The City of Gainesville, FL
U.S.A., according to the C.A.F.R., from 2014, does not have any adequate
financial reserves to cover: emergency situations, law suits, property damage,
or anything else (p. 5). The City of Gainesville, FL U.S.A., according to the
C.A.F.R., from 2014, is soo over-leveraged, that it may be unable, to gain
access, to additional emergency money-even from a lender (p. 5).
c) Analysis
of expenditures and expenses:
1) Do
any components of expenditures and, at the government-wide level, expenses
exhibit sharp growth?
Yes, the City of Gainesville, FL U.S.A., according the 2014 C.A.F.R.,
has had a dramatic increase, in the amount of money, that is being spent in the
area, of human services (MDA-4). The City of Gainesville, FL U.S.A., spent:
$384,825 on the area of human services, in 2013, and in 2014, the City of
Gainesville, FL U.S.A, according to the C.A.F.R., spent a total, of:
$2,216,579, on human services, support services program (MDA-4). Additionally,
the City of Gainesville, FL U.S.A., spent, in 2014, on government activities:
$64,021,054, on public safety (MDA-4). According to the C.A.F.R., of 2014, far
more was spent, to support government activities, by the City of Gainesville,
FL U.S.A., on public safety, than, in any other area (MDA-4). I do not
personally know, if Gainesville, FL U.S.A., is any safer, because of all the
money, that the City of Gainesville, FL U.S.A., spends on public safety?
2) Is
adequate budgetary control being exercised over expenditures?
No, adequate budgetary
control, is not being exercised over expenditures, on the City of Gainesville,
FL U.S.A. budget, from 2014 (p. 5). The budget, that was created, by the City
of Gainesville, FL U.S.A., according to the 2014 C.A.F.R., was not adequate, to
cover the existing expenses (p. 5). The City of Gainesville, FL, as stated in
the government-wide balance sheet, in the C.A.F.R., makes a great deal of
money, through their business-type funds and accounts, while, on the other
hand, the City of Gainesville, FL, is running a budget deficit, because of the
programs, that are funded, by the government activities funds (MDA-4). The City
of Gainesville, FL U.S.A., should consider going the base, of their
business-type activities and funds, to increase
revenues, for the City of
Gainesville, FL U.S.A., to cover expenses.
3) How
does the growth pattern of operating expenses over the past 10 years compare
with that of revenues?
The City of Gainesville, FL U.S.A. C.A.F.R, from 2014, only presents,
quantitative data, regarding changes in the revenue and expenses fund accounts,
for the past 9 years, from: 2005-2014 (p. 160). The City of Gainesville, FL
U.S.A., has had a negative balance, after expenses, are subtracted from
revenues, for the past 9 years, according to the 2014, City of Gainesville, FL
C.A.F.R. (p. 160). The C.A.F.R., for the City of Gainesville, FL, from 2014,
shows the City of Gainesville, FL, borrowing money, to cover a budget deficit,
from: “other funds,” for the past 9 years (p. 160).
d) Analysis
of debt burden:
1) What
has been the 10-year trend in general obligation long-term debt relative to
trends in population and revenue capacity?
In the past 9 years,
according to the: “changes in fund balances,” balance sheet, from the City of
Gainesville, FL U.S.A., C.A.F.R., the City of Gainesville, FL, has increasingly
borrowed, larger and larger amounts of money, in order to cover expenses, which
are not being covered by revenue (p. 160). According to the 2014 C.A.F.R., of
the City of Gainesville, FL, “City of Gainesville Changes in Net Positions,”
there has been a dramatic increase, in the amount of money, that is budgeted,
for human services (MDA-4). It appears, from the larger amount of money, that
has to be borrowed every year, to cover the expenses, of the City of
Gainesville, FL U.S.A., that are not covered by City of Gainesville, FL U.S.A.
revenues-according to the C.A.F.R., from 2014, that the City of Gainesville, FL
U.S.A., is digging itself into a hole, and going further and further into debt,
with more expenses every year, that cannot be covered by the revenue earned, by
the City of Gainesville, FL U.S.A. (p. 160).
2) Are
significant debts of other governments supported by the same taxable
properties? What has been the trend for this “over-lapping” debt?
There are a small number of other
governments listed, in the Gainesville, FL U.S.A. C.A.F.R, which are supported
by over-lapping taxes: Alachua County, Alachua County School District, St.
Johns Water Management District, and the Alachua County Library District (p.
162). The trend, for this over-lapping debt, has been mostly small decreases,
according to the City of Gainesville, FL U.S.A., C.A.F.R., of 2014-since the
tax year, of 2004 (p. 162).
3) Are
there significant levels of short-term operating debt? If so, has the amount of
this debt, grown over time?
4) Are
there any significant debts (e.g., lease obligations, unfunded pension
liabilities, 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?
Required:
a) Calculate,
insofar as possible, the financial ratios in Illustrations 10-3 and 10-4 of the
text. Evaluate the ratios in terms of the red flags and bench marks provided in
Illustrations 10-6 and 10-7 and long-term trend data for each ratio, if
available. List any assumptions you made.
b) Locate
any additional data that you think may be useful in assessing the financial
condition of this city; for example, see the U.S. Census Bureau’s Web site, at:
www.census.gov and the Web sites of cities
you consider comparable in size or other attributes, to this city.
c) Prepare
a result on the results of your analysis. The report should have an appendix
providing a few graphs and/or tables to support your analysis. In particular,
graphs showing revenues, expenditures, and key debt ratios for the past 10
years and selected demographic and socioeconomic trends are helpful. You may
want to include some of the ratios calculated in part b in an appendix. Be
succinct and include only data relevant to your analysis. Organize you report
along the lines of the ratios evaluated in part a.
City of Gainesville, FL U.S.A. Revenues and Revenue
Funds-Statistical Analysis:
To begin an analysis of the City of Gainesville, FL U.S.A. revenues, and
revenue resources, I decided to peruse, the statistical section, of the
C.A.F.R., which, according to: Kattelus, Reck,& Wilson (2010), is required
by the G.A.S.B., and which presents information, in the following five
categories:
1. financial
trends;
2. revenue
capacity information;
3. debt
capacity information;
4. demographic
and economic information; and
5. operating
information. (p. 362)
1) Financial
trends information, provides information, at both: “the fund level, and the
government-wide level,” about how the governments revenue resources, have
fluctuated, and ebbed and flowed, over a specific period of time-including the
financial changes, which have occurred to the fund balances, in the net asset
categories (Kattelus, Reck,&Wilson, 2010, p. 362).
2) Revenue
capacity information provides information, in regards to, the ability of the
City of Gainesville, FL U.S.A., and the ability of the City of Gainesville, FL
U.S.A., to create revenues-what are referred to as: “own-source revenues,”
i.e.: “property taxes, and user charges (Kattelus, Reck,&Wilson, 2010, p.
362).” The City of Gainesville, FL U.S.A. revenue capacity information section,
of the statistical analysis of the C.A.F.R., focuses on, the most “significant
own-source revenue” resources, for the City of Gainesville, FL U.S.A. (Kattelus,
Reck,&Wilson, 2010, p. 362).
3) The
debt capacity information provided in the statistical section, of the City of
Gainesville, FL U.S.A. C.A.F.R., provides information about the city’s: “debt
burden,” and the city’s ability to: “issue additional debt (Kattelus,
Reck,&Wilson, 2010, p. 362).”
4) The
demographic and economic information, in the City of Gainesville, FL U.S.A.,
C.A.F.R. statistical analysis section, provides information about: income,
unemployment, employers, etc., which is presented as a review over a designated
period of time, and, as a comparison, to other similar governments (Kattelus,
Reck,&Wilson, 2010, p. 362).
5) The
operating information, which is provided in the City of Gainesville, FL U.S.A.,
C.A.F.R., provides information on the City of Gainesville, FL U.S.A.,
pertaining specifically to the: “governments financial condition”-how well is
the City of Gainesville, FL U.S.A. doing, in earning, and generating revenues,
to cover expenses, and, is the revenue sustainable (Kattelus, Reck,&Wilson,
2010, p. 362)?
The
definition provided, in the City of Gainesville, FL U.S.A. C.A.F.R., for
operating expenses, is incorrect, compared to the definition, of operating
expenses (p. 362) and “financial condition (p. 431),” which are provided by
Kattelus, Reck,& Wilson (2010). Operating expenses, as defined by the City
of Gainesville, FL U.S.A., C.A.F.R. (2014), is as follows:
Operating Expenses: These
schedules contain service and infrastructure data to help the financial statement
user understand how the information in the City's financial statements relates
to the services the City provides. (p. 155)
According to Kattelus, Reck,& Wilson (2010), the
operating expenses, are supposed to provide information on the: “governments financial
condition (p. 362).” “Financial condition,” as defined by Kattelus, Reck,&
Wilson (2010), is supposed to be, the ability of the City of Gainesville, FL,
and the city’s ability, to meet, and to continue to meet, the operating needs,
of the City of Gainesville, FL U.S.A., which, includes, and is not limited to:
adequate revenues, to cover expenses (p. 431).
Although,
the City of Gainesville, FL U.S.A. C.A.F.R. (2014), includes the three
suggested categories, of: “number of government employees, demand or level of
services, and capital asset information,” the number of years covered, is not
10 years, the number of years covered, is only 9 years-at the most (p.176-1790,
it is impossible for me to determine, for the suggested schedules, and
information presented in schedules, if there is enough revenue being generated,
by the City of Gainesville, FL, to cover the expenses, and, there are almost no
notes, to explain the schedules-there are only a few foot notes (p. 176-179).
Schedule of Federal Awards and State Financial
Assistance Funds:
There
are a few problems, with the information provided, in the schedule of Federal
awards and State financial assistance section, of the City of Gainesville, FL
U.S.A. C.A.F.R., of 2014 on pages: 185-187. While the total expenditures, for
the Federal awards, and State financial Assistance money, seem to be listed, in
the Gainesville, FL U.S.A., C.A.F.R., of 2014, the total amount of the
financial awards, are not provided at all (p. 185-187).
I have no idea, from looking pages
185-187, in the City of Gainesville, FL U.S.A., C.A.F.R. (2014), how much
Federal and State financial assistance, are provided to the City of
Gainesville, FL U.S.A., every year, and, there is no indication, if there were
excess funds, or deficits, generated, from the Federal and State financial
assistance fund accounts. The amount of money, which is listed as: “Federal
Amount Provided to sub-recipients, is not equal, to the amount of money, which
is listed, as total expenditures given to the sub-recipients, as per
information, which is presented, in the City of Gainesville, FL U.S.A.,
C.A.F.R., of 2014, on page 188.
Suspected Accounting Fraud: City of Gainesville, FL
U.S.A.:
The movement of money, out of: “other
financial resources” fund accounts, into different City of Gainesville, FL
U.S.A. fund accounts, to cover the budget deficit, looks like: “cooking the
books” and what I have learned, about “money earnings management”-“Red Flag (p.
5)!” Additionally, the debit, for year,
of 2014, which is presented, at the bottom of the expenses column, although it
is in parentheses, on page 5, of the Gainesville, FL C.A.F.R. 2014, the fund
schedule, and financial accounting statement, is indicating that the debt
amount is in excess-“under”, instead of correctly indicating, that the total
debt amount is “over.”
From careful review, it looks to me,
from what I have recently learned, in advanced accounting, like, there may be
fraud occurring, in the financial accounting records, at the City of
Gainesville, FL-as per the information presented, and available, in the City of
Gainesville, FL U.S.A., C.A.F.R., from 2014. I recommend, a full investigation,
of the financial accounting records, of the City of Gainesville, FL U.S.A. .
Below, is a copy, of the City of Gainesville, FL Government-wide balance sheet,
on page 5, of the 2014 C.A.F.R.:
Analysis
of financial reserves:
The City of Gainesville, FL, U.S.A.,
according to the C.A.F.R., from 2014, is: broke, and over-leveraged (p.5). The
City of Gainesville, FL, according to the C.A.F.R., from 2014, is moving money,
in what looks like: “cooking the books,” and “money earnings management,” from
“other financial accounts and funds,” to cover expenses, which exceeded
revenues (p. 5). The City of Gainesville, FL U.S.A., according to the C.A.F.R.,
from 2014, may be so in debt now-there is no extra revenue to cover emergency
situations, or law suits, etc., that, the City of Gainesville, FL U.S.A., like
Detroit, Michigan, may have to consider filing for Bankruptcy, in Federal court
(p. 5).
Analysis
of expenditures and expenses:
Obama, since his last election, has
invited a huge number of physically disabled, mentally retarded, mentally ill,
and seriously physically ill people, from other countries, to live and work, in
America. As a result, Americans are required to pay more in taxes, and more in
insurance, both: health and life-and even car insurance. Americans are also
required to allocate, more U.S. government benefits, towards social service
programs, that support people, who can barely function, and, who require a
great deal of support. The City of Gainesville, FL U.S.A., according to the
C.A.F.R., from 2014, has increased spending in the area of human services,
from: $384,825, in 2013, to an incredible: $2,216, 579, in 2014 (MDA-4).
America cannot afford to support, the world’s: sick and dying mentally retarded
and mentally ill populattion, of dysfunctional adults.
Additionally, the City of Gainesville, FL
U.S.A., budget, from the 2014 C.A.F.R., indicates, that Gainesville, FL, spend
the most amount of money annually, in the category of government activities, on
public safety: $64,021,054. None of the other, government activities, that
generate expenses, within the City of Gainesville, FL U.S.A., according to the
2014 C.A.F.R., require an annual budget, of above: $16,176,189. It is painfully
clear, from the City of Gainesville, FL C.A.F.R., from 2014, that the City of
Gainesville, FL, is spending too much money, because, revenues, are not
covering expenses (p. 5). The following data, is from the MDA-4 page, in the
front of the City of Gainesville, FL U.S.A., C.A.F.R., from 2014, and shows,
with quantitative data, the dramatic increase, in spending, on human services,
in Gainesville, FL, from 2013-2014, and, the high cost, of public safety, in
Gainesville, FL U.S.A.:
According to the City of
Gainesville, FL U.S.A., information available, in the 2014 C.A.F.R., the City
of Gainesville, FL, has almost no budgetary controls in place (p. 160).
Although, the City of Gainesville, FL U.S.A., “changes in fund balances of
governmental funds,” balance sheet, is supposed to be for ten years-it only
presents financial information, for the past 9 years, from: 2005-2014-I wonder
why 2004, is missing (p. 160).
The City of Gainesville, FL, from
2005-2014, according to the: “changes in funds” balance sheet, has been running
a budget deficit, after expenses, are subtracted from revenues (p. 160). Large
amount of money, has been borrowed, over the past 9 years, by the City of
Gainesville, FL U.S.A.-as evidenced on the: “changes in funds,” balance sheet,
that is available, in the 2014, C.A.F.R. (p. 160). Last year-2014, the most
money, in the past 9 years, was borrowed, by the City of Gainesville, FL
U.S.A., according to the C.A.F.R.-in order to cover expenses, which totaled
beyond City of Gainesville, FL revenues: $40, 850,000 (p. 160).
Not balancing a budget, and over
spending, are serious detriments, to the U.S. economy. The U.S. Federal
government, does not set a good example for the rest of the country, by
applying budgetary limitations, and by saving, to pay off debt. I read on
Facebook recently, that a member of the U.S. Congress-one of our elected
representatives, thought that it was fine, that he, and other Congress members,
stated, that they were just guessing, about how much expenses, for the U.S.
government would cost, and that, they had no real idea, how much the U.S.
government would require for spending, to cover, or to balance, a U.S. budget.
The City of Gainesville, FL, is
required to have an audit performed, with the submission of the C.A.F.R, every
year, prior to submission for review. The City of Gainesville, FL, has been
engaging, in questionable accounting practices, which indicate, that the City
of Gainesville, FL, is not able to sustain itself financially, for at least-the
past 9 years, as graphically displayed, in the C.A.F.R., from 2014:
The
auditors, who having been reviewing the City of Gainesville, FL U.S.A.,
C.A.F.R. (2014), for the past 9 years-and I still wonder why, 2004, was not
included, in the last ten years, of: “changes in fund balances” statement,
should have recognized immediately, that there was something really wrong,
about the City of Gainesville, FL U.S.A., borrowing money, and creating
additional debit for the City of Gainesville, FL U.S.A., and moving money,
from: “other funds,” in order to cover costs, that could not be afforded, after
expenses, were subtracted from the City of Gainesville, FL U.S.A. revenues (p.
160).
When the last audit, by independent auditors,
was conducted, of The City of Gainesville, FL U.S.A., and the City of
Gainesville, FL U.S.A., C.A.F.R., two separate independent auditors, were
hired, by the City of Gainesville, FL-instead of just one:
Carr, Riggs,& Ingram,
L.L.C.: CRI: CPA’s and Advisors:
4010 N.W. 25th Place
Gainesville, FL 32606
Gainesville, FL 32606
Phone: 352-372-6300
Fax: 352-375-1583
Fax: 352-375-1583
P. O. Box 13494
Gainesville, FL 32604
Purvis, Gray& Company:
Certified Public Accountants:
P.O. Box 141270
|
Gainesville,
Florida
222 NE 1st Street
Gainesville FL 32601
Phone: (352) 378-2461
Fax: (352) 378-2505
Ocala,
Florida
Laurel Ridge Professional Center
2347 SE 17th Street Ocala, FL 34471
Phone: (352) 732-3872
Fax: (352) 732-0542
Email: info@purvisgray.com
|
Sarasota,
Florida
5001 Lakewood Ranch Blvd. N.
Suite #101 Sarasota, FL 34240
Phone: (941) 907-0350
Fax: (941) 907-0309
Tallahassee,
Florida
443 East College Avenue
Tallahassee, FL 32301
Phone: (850) 224-7144
Fax: (850) 224-1762 |
Both groups, of independent auditing C.P.A. firms,
have a number of branches, and locations, through-out, the United States.
Neither auditing firm, caught the possibly accounting fraud, which was
incredibly easy, for me to locate, on the City of Gainesville, FL U.S.A.,
C.A.F.R., from 2014, after only one class, in fraud detection (p. 5). I am not
a trained C.P.A. . It is my perception, of how easy it was to locate, the
suspected fraud, within the financial statements, from the City of Gainesville,
FL, C.A.F.R., from 2014, that both C.P.A. firms, may be complicit, in hiding an
act of accounting fraud, within the City of Gainesville, FL, U.S.A..
If, evidence can be collected, confirming the fact, that accounting
fraud, has in fact occurred, within the City of Gainesville, FL, based on the
information available in the C.A.F.R., from 2014, then, I honestly believe,
that both accounting firms, are negligible, for not reporting, the possible
incidence of fraud, when they conducted their audits. As negligible parties, to
a collusion to hide, account fraud, within the City of Gainesville, FL
U.S.A.-if the account fraud can be proven in court, then, both auditing firms,
should be sued, by the City of Gainesville, FL U.S.A. .
Analysis of Debt Burden:
According to the C.A.F.R., for the City of Gainesville, FL U.S.A., from
2014, the City of Gainesville, FL, is falling deeper, and deeper into debt,
with an accumulation of expenses, which cannot be adequately covered, by
revenues, which are earned by the City of Gainesville, FL (p. 160). On the City
of Gainesville, FL U.S.A., C.A.F.R., from 2014: “net position,” balance sheet, it
is indicated, that a significant amount of money last year, was allocated to
the human services fund (MDA-4).
It
appears, from data presented on the: “net position” balance sheet, that
expenses, may be increasing in Gainesville, FL U.S.A., because of a significant
increase, in the population, of people, who require human services (MDA-4).
However, other balances sheets, which are available in the City of Gainesville,
FL U.S.A., C.A.F.R., from 2014, present different quantitative data, regarding exactly
how much money, is being allocated, to human services, in Gainesville, FL
U.S.A. . I am not certain, why the numbers on the balance sheets are so
different-“Red Flag!” I wonder if the financial accounting department, at the
City of Gainesville, FL U.S.A., was being dishonest, about the amount of money,
which is being spent annually, on human services, in Gainesville, FL U.S.A.,
because the numbers of the various balance sheets-vary, to a great degree?
According to the City of Gainesville, FL U.S.A., C.A.F.R., from 2014,
the over-lapping tax debt, for the following financial entities: Alachua
County, Alachua County School District, St. Johns Water Management District,
and Alachua County Library District, has been slowly decreasing, since the tax
year, of 2004 (p. 162). It does not make sense to me, which the debt associated,
with over-lapping taxes through the City of Gainesville, FL U.S.A., are
decreasing, while, at the very same time, the City of Gainesville, FL U.S.A.,
is falling deeper, and deeper, into debt. Taxes, are one main source, of the
City of Gainesville, FL U.S.A. revenue. Taxes cannot be cut, and debt
associated with over-lapping taxes decreased, when, the City of Gainesville, FL
U.S.A., is not able to cover current expenses, with the small amount of
revenues earned. The following, is a graphic depiction, of the: “direct and
over-lapping government” expenses, from the City of Gainesville, FL U.S.A.,
C.A.F.R., from 2014:
References
Carr,
Riggs,& Ingram, L.L.C. . (Date of publication). CRI: CPA’s and Advisors. In
CRI: CPA’S
and Advisors: Carr, Riggs,& Ingram.
Retrieved from http://cricpa.com/location.aspx?ID=23
City of Gainesville Changes in Fund Balances of
Governmental Funds Last 10 Fiscal Years.
(2014). [Graphic illustration the City of
Gainesville, FL C.A.F.R. September 30, 2014]. City of Gainesville, FL
C.A.F.R. Retrieved from http://www.cityofgainesville.org/GOVERNMENT/CityDepartmentsAM/BudgetFinance/CAFR/tabid/189/Default.aspx
City of Gainesville Changes in Net Position. (2014).
[Graphic illustration the City of Gainesville,
FL C.A.F.R. September 30,
2014]. City of Gainesville, FL C.A.F.R. Retrieved from http://www.cityofgainesville.org/GOVERNMENT/CityDepartmentsAM/BudgetFinance/CAFR/tabid/189/Default.aspx
City of Gainesville, Florida Statement of Revenues,
Expenditures, and Changes in Fund
Balances, Governmental
Funds, for the Year Ended September 30, 2014. (2014). [Graphic illustration the
City of Gainesville, FL C.A.F.R. September 30, 2014]. City of Gainesville,
FL C.A.F.R. Retrieved from http://www.cityofgainesville.org/GOVERNMENT/CityDepartmentsAM/BudgetFinance/CAFR/tabid/189/Default.aspx
City of Gainesville Property Tax Rates Direct and
Overlapping Governments Last 10 Fiscal
Years. (2014). [Graphic
illustration the City of Gainesville, FL September 30, 2014]. City of
Gainesville, FL C.A.F.R. Retrieved from http://www.cityofgainesville.org/GOVERNMENT/CityDepartmentsAM/BudgetFinance/CAFR/tabid/189/Default.aspx
Expenses & Revenues-Governmental Activities and
Revenues by Source-Governmental
Activities. (2014).
[Graphic illustration the City of Gainesville, FL C.A.F.R. September 30, 2014].
The City of Gainesville, FL C.A.F.R. Retrieved from http://www.cityofgainesville.org/GOVERNMENT/CityDepartmentsAM/BudgetFinance/CAFR/tabid/189/Default.aspx
Kattelus, Susan C., Reck, Jacqueline L.,& Wilson,
Earl W. (2010). Accounting for Governmental
and Nonprofit Entities.
Boston: McGraw-Hill Irwin.
Unknown Author. (2014). Comprehensive Annual
Financial Report (C.A.F.R.). Retrieved from
Unknown Author. (n.d.). Purvis, Gray,& Company .
In Purvis, Gray,& Company: Certified
Public Accountants.
Retrieved from http://www.purvisgray.com/about.html?page=locations
I.
Appendix: Additional Graphic
Illustrations:
Graphic illustration of: Expenses to Revenues, for the
City of Gainesville, FL U.S.A., 2014 C.A.F.R, on page: MDA-5:
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