THIS IS FOR AN ACCOUNTING CLASS.Discussion Question week 2
This CAFR report is on the State of Maryland.

Introductory/Financial Section

(1) Was the entity’s annual report for the previous year awarded a “certificate of achievement for excellence in financial reporting” by the GFOA?

1. Yes. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the State of Maryland for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2018.

(2) Which public accounting firm audited the financial statements? What was the auditor’s opinion on the financial statements?

2. SB & Company LLC audited the financial statements of the State of Maryland. The auditor’s opinion on the financial statements was that the statements were free from material misstatements, were prepared in accordance to the accounting principles accepted in the United States, and they presented a true and fair view of the State’s performance and position for the year ended June 30,2019.

(3) Did the auditor mention internal controls in their report?  Did the auditor provide an opinion on the entities internal controls?

The auditor did mention internal controls in their report. The auditor however did not give an opinion on the entity’s internal controls. Instead, they gave a disclaimer that they only considered the internal controls to help in developing appropriate audit procedures and not to give an opinion on them

(4) Was an organizational chart presented?  What person, group or entity was at the top of the chart? 

Yes. An organizational chart was provided. The voters of Maryland were at the top of the chart.

Governmental Funds

1. How many Governmental Funds are presented as major funds on the financial statements? Two Government Funds have been presented as major funds on the financial statements. They include the General Fund and the Special Revenue Fund.

(2) What is the total assets amount (in thousands) on the Governmental Funds balance sheet (include both major and non-major funds)?
1. The total assets amount on the Governmental Funds balance sheet is $ 8,759,967.

(3) For Governmental Funds, what activity accounted for the largest source of revenue (found on the “Statement of Revenues, Expenditures and Changes in Fund Balance”)?
For Government Funds, Federal Revenue accounted for the largest source of revenue at $ 12,378,980, 000

4.For Governmental Funds, what activity accounted for the largest source of expenditure (found on the “Statement of Revenues, Expenditures and Changes in Fund Balance”)?

For Government Funds, Health and Mental Hygiene accounted for the largest expenditure at $ 14, 295,022,000.

(5) Does your entity have any special revenue funds presented on the financial statements as a major Governmental Funds?
 Yes. The entity has special revenue funds presented on the financial statements as major governMaryland Financial Analysis

Question No: 1

1) How many major enterprise funds does the entity maintain (if any)?
Enterprise fund are Government-Owned fund aims to provide goods and services in exchange of fee Maryland government has Total Six enterprises fund, out of which four are Major enterprise fund. Name of these funds are the employment loan program, Economic development program, the Maryland lottery and Gaming control agency and the Maryland transportation authority.

Question No: 2

(2) Are all the major enterprise funds operating at a profit (Operating Income)?
Operating income of all enterprise funds are positive except economic development loan program. Economic development loan program has negative operating income worth ($8,407,000), unemployment loan program has positive operating income worth $36,203,000, Maryland lottery and gaming fund had positive operating income worth $1,319,016,000, Maryland transportation authority has positive operating income worth $862,534,000.

Question No: 3

Does the entity maintain any internal service funds (major and/or nonmajor)?

Yes there are three major and four non major internal services fund (ISF). Major internal services fund includes Maryland higher education Activities, Maryland Prepaid College trust and Maryland Stadium Authority and Non Major includes Maryland Food center, Maryland environmental services, Maryland industrial development financing authority, and Maryland technology Development Corporation.

Question no: 4

Do the financial statements include a statement of cash flows for proprietary funds? If so, is the direct method or indirect method used?
Fiduciary Funds
Yes there is cash flow statement of proprietary fund at page no 37 of Maryland financials 2019 report. They used indirect method in cash flow statement.

Question no: 4 & 5

4. There are four types of fiduciary funds. Does this entity maintain all four types?
5. What are the purposes of the entity’s fiduciary funds?
Maryland offers all 4 types of Fiduciary fund. Fiduciary fund are used to provide resources for the wellbeing of other parties outside the government jurisdiction. Fiduciary fund include pension fund, employee benefit Trust fund, investment trust fund, and agency fund. Maryland pension and employee benefit trust fund are Retirement and pension fund system, the Maryland transit administration pension plan, the postretirement health benefit and the deferred compensation plan. The investment trust fund Consist on transaction assets, liabilities and net position of an external investment pool. Agency funds account for the Assets held for distribution by the state agent for the other organization.

Question No: 1

(1) What is the financial condition of the government you selected?
Condition of government is estimated by the income from all sources minus expenditure. Maryland government revenue in 2019 is $38,214,220 governments have generated additional 7% revenue comparatively last year 2018 it was Remember the CAFR PowerPoint presentation is due in week 6 and the corresponding CAFR paper is due
in week 7
See the “Project Descriptions – CAFR and NFP” in the week 1 folder.
Think of the PowerPoint presentation as a presentation of your paper.

The way I would this project is to imagine that you had to describe the CAFR to a friend who has studied
accounting but who is not familiar with governmental accounting (or seen a CAFR).
The week 2 and 3 discussion postings should assist you with the creation of your project.
Possible questions to answer (in no particular order). Please do not limit yourself to the questions below.

What is the government reporting entity and the date of the CAFR?
Who is the report created for?
Who audited the report? What was audited (financials, statistics, internal controls, etc.)? What was the
opinion? Date of auditors report?
What was the source of the accounting principles?
What is fund accounting?
What are the fund categories? How are they different?
What are the financial statements included in each category?

What types are funds are in each category?
Did my entity have all the different types of funds? What funds were not included?
What are the measurement focus and basis of accounting of the different funds?
What are the Government Wide Statements? Are all the funds included in the Government Wide
What did I learn from the MD&A? Look for and summarize key issues addressed in the “Management’s
Discussion and Analysis” section of the CAFR.
Review the “Statistical Section”. Summarize key statistics addressed in this section.

What is the financial condition of your government? For example, compare current revenues and
expenses with the prior year.
Compare the budgeted amounts with the actual amounts.

What were the major assets/liabilities for your government?
What were the sources of revenues and expenditures?
What are the three major section of a CAFR?
What is the distinction between a major vs non-major fund. What is the test to determine this?
What were the major funds for your CAFR

Review the “Statistical Section”. Summarize key statistics addressed in this section.

Very Important

Submitted papers may be run through Turnitin. Turnitin checks submitted papers and

identifies plagiarism. If it is found that part of the paper was plagiarized, the student will not receive a

warning. The issue will be escalated to the Director of Accounting at UMUC.

Please review UMUC’s policy on Academic Dishonesty and Plagiarism

Our course focuses on the financial reporting for government entities at the state and local level using Generally Accepted GASB
The key financial report for government entities at the state and local level is the Comprehensive Annual Financial Report (CAFR) . You will select a government entity with a recent CAFR as a key project and learning process for our course.
The CAFR itself is educational to explain its structure, beginning with the table of contents. The details of the CAFR are presented at a web site such as .

Access this web site to begin your study of the CAFR structure. As you consider the organization of the example CAFR you should read your government entity CAFR so you can develop a plan for your project as you learn about the form (CAFR) and your government entity.
Table of Contents

Introductory section

· Letter of Transmittal
· Certificate of Achievement for Excellence in Financial Reporting
· Statewide Elected Officials as of June 30, 2015
· 2015 State Organization Chart

Financial section

· Independent Auditor’s Report
· Management’s Discussion and Analysis
· Basic Financial Statements
· Notes to the Financial Statements
· Required Supplementary Information
· Governmental Funds
· Proprietary Funds
· Fiduciary Funds
· Component Units
· Individual Fund Schedules

Statistical section

· Statistical Section

Learn more about the IRS Form 990 and Not for Profit (NFP) Organizations

Learn more about the Comprehensive Annual Financial Report (CAFR):
     State of Maryland General Revenue Reports
     State of Maryland Local Government Landing Page

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