CAFR Analysis—City of Chicago
The Comprehensive Annual Financial Report I chose to analyze is the CAFR of city of Chicago for the fiscal year ending December 31, 2014. I selected this report because I am quite familiar with this city due to several times travelling and this CAFR provided almost all the information necessary to conduct analysis.
This CAFR is divided into three main sections as follows:
Section 1: Introductory Section (unaudited) – This section includes the Letter of Transmittal, Certificate of Achievement for Excellence in Financial Reporting and a brief chart of how those government departments are organized.
Section 2: Financial Section (audited) – This ...view middle of the document...
In addition, the summary of Chicago government’s net position and activities and comparison between two years , basic information of major funds balances and changes in those funds, capital assets and debt administration, economic factors and next year’s budgets and rate were all stated in this part. By highlighting the key facts happened in 2014 and translating some data into graphs, government facilitated user who are not familiar with financial items to obtain the major information provided by those complicated financial statements without spending large amount of time and efforts.
The first two statements following management discussion and analysis was statement of net position and statement of activities.
Net position of the City’s governmental activities decreased $1,621.0 million to a deficit of $9,043.3 million compared to the $7422.3 million in 2013. According to the MD&A, the increased deficit was primarily due to increased pension costs. The net deficit has $28.7 million in net investment in capital assets, such as buildings, bridges, and $1,492.0 million restricted for specific purposes while having an unrestricted deficit of $10,564.0 million. This deficit will be paid off by issuing governmental bonds and other long-term debts and other revenues earned in future years. Deficit doesn’t mean that Chicago is experiencing financial problems. The deferred inflow of $1,576.3 million showed on the balance sheet as a liability will be recognized in the following years as the commitment being fulfilled.
The total revenues for all governmental activities were $5,729.1 million in 2014, having an increase of $172.8 million, compared to $5,556.3 million in 2013. In the $5,729.1 million, 65% was collected from general programs, such as property tax, other tax and grant contribution for general use while the rest 35% was generated from program revenues, such as licenses, permits, fines and charges to other services, operating grants and contributions and capital grants and contributions for special programs. The revenue increasing is mainly due to the increasing of taxes by $98.8 million.
While the growing of revenues in 2014, expenses rose at the same time. The total expenses for governmental activities in 2014 were $7,350.1 million. Compared to the $7,080.9 in...