Governmental Financial Reporting Coursework Example

Governmental Financial Reporting
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Governmental Financial Reporting
Question one
Administration of Children and Families (ACF) is a governmental organization under the U.S Department of health and human services. The cost allocation is based on the provisions of federal regulations at 2 CFR 225 which gives cost allocation guidelines and cost principles for state agencies to follow. According to the program Instruction (PI), there are certain allocation requirements among the departmental units that must be met before claiming title IV-E Federal Financial Particip0astion (FFP) (Information Memorandum, 2017). There are Adoption and Kinship Guardianship Assistance for administrative and training costs allowable and allocated as per the FFP rate (Information Memorandum, 2017). All costs have to be duly identified, allocated, and measured in accordance with the federal regulations at 2 CFR 225. The benefit of the method is that it ensures uniformity in identifying program costs.
Question two
Federal agencies are required to do annual reporting in accordance with the provisions of FASAB. In the financial section of the Annual Performance and Accountability Report, will contai8ng a balance sheet, statement of net costs, statement of changes in net position, and a statement of budgetary resources (U.S GAO, 2017). In certain departments, statement of custodial activity, statement of changes in social insurance, and statement of changes in social insurance will also be required.

The standards of reporting will be implemented by the Treasury and OMB.OMB will also provide guidelines on the statements format. Submission of management representation letters relating to the general and special purpose financial statements will be required. Final performance and accountability report (PAR), Agency Financial Report (AFR), or Annual Management Report will be needed from all state agencies. OMB and OFFM will receive PAR reports while the AFR and AMR will be sent to Main Treasury, GAO, and Financial Management Service (FMS). Final reports should be submitted to the Congress.
Question three
Cumulative results of operations and unexpended appropriations are the two major components of an agency’s net position. Under the unexpended appropriations, apportioned authority, commitments, and proprietary accounts including program costs and future funded expenses led to the year to year change of the component. There were unobligated appropriations and undelivered orders of $4,000 each which made up the $8,000 increase in the unexpended appropriations. The cumulative results of operations decreased due to a fall in the net cost of operations. Depreciation and accrued leave fell by $8.000 and $4,000 respectively causing a respective decline in the net cost of operations. An appropriation increase of $7,000 for financing emerged from the $37,000 purchase of inventory out of the finance cost of $37,000.
Question four
The balance sheet, income statement, and the cash flow statement are the most important statements that a board member of a publicly held institution will find useful in seeking to expand operations. In order to expand, the board will need to know the financial position of the company that is assets and liabilities and whether there is capacity for development in term of resources. The board also needs to determine whether the firm has been creating value for shareholders. The cash flow will indicate the liquidity position and hence help determine whether the firm will be in a position to finance debt obligations in future when the fall due. Besides the three statements, the operation plan will also be needed in the case of a privately-owned company.
Question five
Revenue from gift shop sales forms part of the cost of goods sold to the organization as it has sales value Funds from donors with specifications on time of usage is an endowment funding as it contains a condition on it.
Pledge by the donor for current year operations not yet paid is an income/revenue to the organization.
The statue that is only displayable but not saleable from donors is a leasehold to the organization as ownership has not been transferred.

References
Information Memorandum (2017). ACF Administration for Children and Families: U.S. Department of Health and Human Services Administration on Children, Youth and Families. Retrieved from https://www.acf.hhs.gov/sites/default/files/cb/im1207.pdf.
U.S GAO. (2017). Federal Financial Accountability. Retrieved from http://www.gao.gov/key_issues/federal_financial_accountability/issue_summary.