Examine the city’s government-wide statement of activities and statement of revenues, expenditures, and changes in fund balances—governmental funds and prepare a brief report responding to the following questions.

a. Refer to the government-wide statement of activities. Do any functions show net revenues, or do they all show net expenses? Is the fact that most, if not all, functions or programs show a net expense a problem? Why or why not?

b. On the government-wide statement of activities, are any indirect expenses reported as separate line items? If so, what are the expenses?

c. Compare the amount reported for property taxes on the statement of revenues, expenditures, and changes in fund balances to the amount reported as general revenue on the statement of activities. Do the two amounts agree? If not, can you think of a reasonable explanation for the difference?

d. Compare the amounts reported as expenditures on the statement of revenues, expenditures, and changes in fund balances to the amounts reported as expenses for the same functions on the statement of activities. Do the amounts agree? If not, can you think of a reasonable explanation for the differences?

e. What, if any, special items or extraordinary items are reported on the statement of revenues, expenditures, and changes in fund balance and the statement of activities? Are the items and amounts the same on the two statements? If not, can you think of a reasonable explanation for the difference?