Financial Statement Analysis

Cuyahoga County, Ohio

Financial Statement Analysis: Year Ended December 30, 2011

Mindy Moore

Professor: Michelle R. Slabiak

ACC410

August 27, 2012

Cuyahoga County, Ohio

Financial Statement Analysis: Year Ended December 30, 2011

Analyze the method of accounting used for the general fund and all other funds in existence by the government. Evaluate the reasoning for the use of the method of accounting for each of the funds as required by GASB.

The governing body of Cuyahoga County government agency ensures financial statements conform to GAAP for the regulation of government entities. The county further acknowledges to adhere to the principles; rules and legislation mandated by GASB for all if its accounting governance. “The County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements” (Department of Finance, 2011). Fund accounting is an accounting method used by government and non-profit agencies where incomes are distributed two or more fund accounts to help agencies account for all transactions. The County funds include 46 separate governmental funds. The County also maintains proprietary funds; enterprise and internal service. There are no fiduciary funds shown in the fund statements “because the resources of those funds are not available to support the County's own programs” (2011).

The reasoning for government agencies to use fund accounting to manage resource is simple. “Fund accounting promotes control and accountability over restricted resources” (Granof & Wardlow, 2011, p. 22). GASB Statement No. 34 mandates governments’ financial statements include two sets of analysis, government-wide financial statements and fund statements. “The government-wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues from other functions that are intended to recover all or a significant portion of their costs through...