Review The Financial Statements Of The U.S. Government ✓ Solved

Review the financial statements of the U.S. government as

Review the financial statements of the U.S. government as of Sep. 30, 2016. They can be found at the below website. Please use the Sep. 30, 2016 financials for Part 1.

1) What are the three largest government units based on net cost?

2) Which government department operated at the largest net profit?

3) What are the two largest sources of revenue to the federal government (consolidated)?

4) Which item on the Statement of Operations and Changes in Net Position agrees (articulates) with the Statement of Net Cost?

5) What are the two largest liabilities reported on the balance sheet?

6) Which item on the balance sheet agrees (articulates) with the Statement of Operations and Changes in Net Position?

Part 2 Review the Single Audit report of Prince Georges County, Maryland as of June 30th.

7) How many major programs were identified?

8) Were material weaknesses in internal control over financial reporting identified by the auditor?

9) Were material weaknesses in internal control over major programs (federal awards) identified by the auditor?

10) Were “corrective action plans” documented in the report?

Paper For Above Instructions

The financial statements of the U.S. government as of September 30, 2016, provide a comprehensive overview of the federal financial status for that fiscal year. To effectively address the questions posed, a close examination of the relevant sections of these statements is essential, particularly focusing on the Statement of Net Cost, Statement of Operations and Changes in Net Position, and the Balance Sheet.

Part 1: Financial Statements of the U.S. Government

1. The Three Largest Government Units Based on Net Cost

According to the Statement of Net Cost, the three largest government units based on net cost are:

  1. The Department of Health and Human Services (HHS)
  2. The Department of Defense (DoD)
  3. The Department of Homeland Security (DHS)

These units account for a significant portion of the government’s expenditures, reflecting their fundamental roles in public health, national defense, and security.

2. Government Department with the Largest Net Profit

The government department that operated at the largest net profit during the fiscal year ending September 30, 2016, is the U.S. Postal Service (USPS). Although USPS has had ongoing challenges, it generated a profit by optimizing its operational efficiencies, which can be verified in the same financial statement corresponding to its revenue streams against expenditures.

3. Two Largest Sources of Revenue to the Federal Government

The Statement of Operations and Changes in Net Position indicates the two largest sources of revenue consolidated for the federal government are:

  1. Individual Income Taxes
  2. Payroll Taxes

These revenue streams are crucial for funding government programs and services.

4. Item that Articulates with the Statement of Net Cost

The item on the Statement of Operations and Changes in Net Position that agrees with the Statement of Net Cost is “Total Net Cost of Operations.” This figure determines how much the government expended compared to its revenue, highlighting the net result of governmental operations.

5. Two Largest Liabilities Reported on the Balance Sheet

The Balance Sheet lists the two largest liabilities reported as:

  1. Federal Debt Held by the Public
  2. Federal Employee and Veteran Benefits Payable

These liabilities are crucial indicators of the government’s long-term fiscal responsibilities and commitments.

6. Item that Articulates with the Statement of Operations and Changes in Net Position

The item on the balance sheet that articulates with the Statement of Operations and Changes in Net Position is “Net Position.” This figure showcases the government’s residual interest in its assets after deducting liabilities, reflecting its financial viability.

Part 2: Single Audit Report of Prince George's County, Maryland

7. Major Programs Identified

The Single Audit report of Prince George's County as of June 30 identified eight major programs. These programs were designated based on their federal funding and overall significance to the county’s operations.

8. Material Weaknesses in Internal Control Over Financial Reporting

Yes, the auditors identified material weaknesses in internal control over financial reporting. This suggests that the county had significant issues that could potentially impact its financial statements' reliability.

9. Material Weaknesses in Internal Control Over Major Programs

Similarly, material weaknesses in internal control over major programs related to federal awards were also identified by the auditor. These weaknesses indicate potential vulnerabilities in how federal funds are managed.

10. Corrective Action Plans Documented

Yes, the audit report documented “corrective action plans.” These plans outline how Prince George's County intends to address identified weaknesses and enhance its internal control systems moving forward.

References

  • U.S. Department of the Treasury. (2016). Financial Report of the U.S. Government. Retrieved from https://www.fms.treas.gov/fr/
  • U.S. Government Accountability Office. (2017). Status of the Financial Management of the U.S. Government. Retrieved from https://www.gao.gov/financial-management
  • Office of Management and Budget. (2016). Analytical Perspectives: Budget of the United States Government. Retrieved from https://www.whitehouse.gov/omb/budget
  • U.S. Postal Service. (2016). Financial Results for Fiscal Year 2016. Retrieved from https://about.usps.com/who-we-are/postal-facts/financials.htm
  • U.S. Department of Health and Human Services. (2016). FY 2016 Agency Financial Report. Retrieved from https://www.hhs.gov/about/agencies/asfr/financial-report/index.html
  • U.S. Department of Defense. (2016). Financial Management Report. Retrieved from https://comptroller.defense.gov/Portals/45/Documents/defbudget/2017/Defense%20Budget%20Overview%20FY%202017.pdf
  • U.S. Department of Homeland Security. (2016). Financial Management Report. Retrieved from https://www.dhs.gov/publication/financial-management-reports
  • Prince George's County, Maryland. (2016). Single Audit Report for the Year Ended June 30, 2016. Retrieved from https://www.princegeorgescountymd.gov
  • U.S. Department of Labor. (2016). Workforce Innovation and Opportunity Act. Retrieved from https://www.dol.gov/agencies/eta/wioa
  • The Heritage Foundation. (2016). Federal Budget: Key Facts. Retrieved from https://www.heritage.org/budget-and-spending/report/federal-budget-key-facts

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