Week 1 Homework Christopher Burpee

P1-4, P1-5, P1-9

P1-4:
1.

a. Based on the information included in the financial statements of The University of Arizona (UA) from 2017 and
2018, the information is insufficient to measure the difference between 2017 and 2018. More information about
the goals about the goals of UA, students, partners, staff, and stakeholders would be needed to know if
accomplishments are being made. Having looked at UA goals on their website (reference link below) that.
Standard measures for educational institutions include student graduation rates, professional exam results, job
placement, income, happiness, prestige, and goodwill in general.

b. Likewise to as stated above, just the Balance Sheet and inflows and outflows do not contain sufficient
information to know if UA was able to achieve its goals in 2018 over 2017. According to the mission statement
from The University of Arizonas website most of their goals are non-monetary and therefore using financials to
evaluate this question is a fallacy of exclusive premises.

c. There is not enough information to determine if the universitys physical facilities were even adequate for
2017 and 2018. Facilities properties asset increased from 945 million in 2017, to 995 million in 2018. The
increase of 50 million was a 11.24% YOY increase but this is still not enough information to understand the
facility needs of the university or make predictions on the future adequacy.

d. The data provided by the financial statements is insufficient to determine the long term if the universitys
long-term financial position improved between year-end 2017 and year-end 2018. The financial reports do not
provide any information to the future fiscal demands so this is unevaluatable and therefore accurate predictions
cannot be made with the available information.

e. The balance sheet and Statement of Inflows and Outflows show very little change in ratios of revenues to
short-term or long-term debt from the fiscal year 2017 to 2018. One would assume that the university would be
able to satisfy its short-term obligations for cash. Even making this inference is still not enough information to
know for certain all possible short-term needs for cash.

2. After reviewing the Governmental Accounting Standards Board (GASB) and Financial Accounting Standard
Board objectives (FASB), the preceding questions are consistent with the with their objectives. The provided
statements do not provide enough information to review or predict the future performance of UA or compare
trends. More information is needed to know if the university is using its current resources to meet its goals and
expectations of stakeholders. This example highlights the differences between evaluating a business and a not-
for-profit and why different rules and expectations between the two exist.
http://neversettle.arizona.edu/mission-statement

http://www.fso.arizona.edu/financial-management/annual-reports

http://www.gasb.org/st/concepts/gconsum1.html

http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=%20MungoBlobs&blobkey=id&blobwhere=117
5820901017&blobheader=application%2Fpdf

P1-5:

1. If I lived across the campus from North Seattle College on College Way North in Seattle the overlapping
jurisdiction of governments over my personal property would include but not be limited to the following. City of
Seattle, King County, State of Washington, United States of America, also through bilateral, trade and United
Nations treats some foreign laws are also enforceable on American citizens. There are also several authorities on
the local level that also have control in the area. This includes Seattle City Light (electricity) and Puget Sound
Energy (gas), Washington Department of Transportation (roads), city of Seattle Parks, these are just a few of the
local and state but there are numerous other agencies that have jurisdiction over services, goods, and utilities
because of necessity for oversight. Just try and put an addition on the property across from school or a sign up
outside of ones business without dealing with governmental agencies and trip to Seattle Courthouse will ensue.

2. It would be difficult to assessing the financial wherewithal of one of those governments without considering
the others. Implications such as the financial health of all supporting agencies can affect another agencies ability
to levy bonds or raise taxes to increase funding. Also, often if one agency has limited funding such as Burien
Police Department, King County Sheriff may need to provide additional assets to make up for the shortfall in
local police coverage. Future budget issue may also force a municipality to move funds in future years to fix
budgets of departments or because of changes to tax revenue. I would use Seattle as an example but believe
that a place under current financial issues such a Flint, Michigan. Issues with their water system and subsequent
cover-up has led to a systemic city-wide failure and losses of current revenue.
P1-9:

1. Based on the limited data provided the city administrators should reject the offer from the private
corporation under the current terms. Although cutting the program would cost jobs some of that would be
made up by economic benefits provided by the company. The city would only stand to save 4 million on wages,
2.6 million for supplies, 1.3 million on cash expenditures, and $0.2 million on rent for a total of $8.1 million
dollars compared to the $8.5 million dollars for the service. This would cause a deadweight loss of $0.4 million
that could be used for other means or simply saved.

2. No matter which method of allocating overhead costs the city uses the real impact and total savings will only
be $8.1 million dollars. The offer should be rejected after due diligence shows that the cost of $7.9 million is not
truly accurate. Raw fiscal numbers still do not provide enough adequate information to analyze the deal. If the
private company offered better security or other benefits that would justify paying the higher cost and
possibility of unhappy residents.