GASB Statement 34, Basic Financial Statements and Management Decisions Select a local government in your state and review the financial statements and audit report for the county or municipality. The financial statements of the government selected should have at least three funds.

Located in Muscogee County, the city of Columbus, Georgia is the state's third-largest city with over 194,000 residents. The Consolidated Government of Columbus, Georgia recently released its latest Comprehensive Annual Financial Report (CAFR) for the 2011 fiscal year. Among the various funds for which this report records accounting practices are the city's General Fund, Special Revenue Funds, Debt Service Funds, and Capital Projects Funds.

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.

According to Figure A-1, Major Features of Columbus Consolidated Government's Government-Wide and Fund Financial Statements, the accrual accounting method is the city's preferred form of accounting, in accordance with the guidelines set forth by the Governmental Accounting Standards Board (GASB). Accrual accounting is used within all of Columbus' citywide bookkeeping because the GASB has issued clear mandates as...

As the CAFR states, "the government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements" (Hodge, 2012). The stated reason for using this accounting method is that "under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows" (Hodge, 2012). Accrual accounting is the preferred form of accounting used by municipal governments because it provides a more accurate representation of a city's financial situation, with the formerly typical practice of transferring one year's debts to the next fiscal year curtailed entirely.
3.) Assess the application and compliance of GASB Statement 34, Basic Financial Statements and Management Decisions and Analysis for State and Local Governments to each of the funds.

According to a Summary of GASB Statement 34, which provides the framework for Basic Financial Statements -- and Management's Discussion and Analysis -- for State and Local Governments, "financial managers also will be in a better position to provide this analysis because for the first time the annual report will also…