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City Of Boston Financial Reports

 1. Did the Government Issue long term debt to support governmental activities during the year? If so, does the government maintain a debt service fund to account for the resources to service the debt?

 In the year 2009, the government issued long term debts to public health departments in the form of mortgages. The debts together with previous debts were to be services in the form of annual mortgage repayments. The debts would be recorded in individual financial accounts for the debtors. This means that accounts for the public health and other future long term loaners would be created and maintained with constant annual and periodical servicing for the payments made towards the loans.

 Other financial policies implemented in this year with regard to loan repayment were the reduction of interests on loans to make repayment for public departments easier and encourage development and entrepreneurship through borrowing. It is perhaps more important to note that Boston city fund most of its capital developments through bonds. Those that were issued in the year 2009 will be redeemed in the year 2013.

  1.  Select one of the most recently established (and larger) capital projects funds (a major fund, if there is one).

$1a.       From where did the fund receive most of its resources?

 In January 2009, commonwealth debated and established policy that allowed municipality councils to set up and operate liability trust funds. In the same time the city council established through approval of council members a revocable OPEB trust fund. The fund was granted twenty million dollars to begin its operations.

$1b.      Did the city acquire or construct new capital assets using resources of this fund? If so, in what amount?

 From the audit report it does not seem like the fund was used to establish or build any city assets. Instead the fund was used to ensure proper service delivery such as improvement in the police department and improvements in the fire departments. Some of the funds were also invested in public health systems.

$1c.       Does the fund have any long-term debt associated with it? If so, does the government maintain a debt service funds to account for the resources to service debt?

 By the end of the financial year, the fund had not begun operating fully. Thus it had not been established where the resources required by the fund would come from and how they would be managed. It was therefore considered unwise and irrational to have the fund hand out any long term debts. Even the short term debts handed out were considered as inevitable.

  1.  What is the percentage of total net bonded debt to assessed value of property? What is the amount of net debt per capita?

The net debt per capita is often calculated to understand the state of debt of the city better. The net per capita in the city defines the amount of debt owed in relation to the income of the city and its specific people. It therefore shows the debt of each citizen in the Boston city. The 2009, net per capita for the city is 0.72% having dropped from 0.56% in the year 2008.the year 2008, had better and larger income generating projects which took the net per capita higher and reduced the debt. This brought the percentage lower for the year 2008, but significant reduction in income and increase in the debts incurred brought the percentage higher in 2009.

  1.  What is the city’s legal debt limit and legal debt margin?

The city of Boston’s legal debt limit was $4, 017,742 which was an increase from the approximate $3, 200,000 of the year 2008. To the city this is viewed as an advantage and increase in performance for public departments who are utilizing the finances issued to them in the form of funds or loans.

 On the other hand the legal debt limit is $ 4, 387, 466, which is in turn reduced by the debts that have already been issued but have not reached the recipients to get the legal debt margin.  Although the debt limit for 2008 and 2009 was the same, the debt that was incurred for the year 2008 was higher than that of the year 2009.

  Does the city have any lease obligations outstanding? Are these accounted for as operating capital leases?

The city had outstanding leases for the year 2009. This included residential leases but mostly was made up of business leases, where the city issued capital leases to its residences for buildings and lots that were empty. The leases had increased by $219 million for this year following an increase in the knowledge on non consequential leases which attracted many citizens.

 In the financial year ending June 2009, the leases were accounted for in the form of operating capital. This is to mean assets that are incurring income without generating much cost.

  1. What is the amount of any overlapping debt?

From the year 2009, there are no significant overlapping debts for the year 2009. The city’s debt service has assumed the $120 million to be obligated towards the city spending onwards to the year 2013, therefore eliminating the debt completely.

  1.  Per the city’s schedule of long-term obligations, what is the total long-term obligation for both governmental and business-type activities? Does this amount reconcile with the long term liabilities as reported on the government wide statement of net assets?

By the end of the financial year, the city had incurred long term obligations totaling to $916.8 million dollars, which was viewed as an increase from the previous year. The increase was accredited to the bond issued in March of 2009 series. Furthermore as the year progressed in the months that followed, the city issued more bonds totaling to $40 million dollars, in order to fund some obligations incurred by the city. The current outstanding liability of the city stands at in thousands $859,171. The amount once subtracted the debt due in a year, reconciles with the amount of government wide assets.

  1. Are any enterprise debt issues backed by the full faith and credit of the general government? If so, how is the liability disclosed?

The debt issued to business men and entrepreneurs are backed by the government that is the national government. They are therefore reported as operating capital and assets from the government. In the financial reports they are treated as liability for the municipal governments, even though the liability is guaranteed.

  1. Indicate the activities accounted for in internal service funds and major enterprise funds. Comment on whether any of these activities could also have been accounted for in the general fund or other governmental funds.

The internal service fund mainly deals with health insurance and benefits that accrue for the employees. From the fund, medical covers are paid and accident benefits are issued. The employees cover is issued by blue shield or blue cross insurers. The premiums are paid from the fund and the benefits accruing to employees are paid through the fund. It is therefore nor advisable for the fund to be included in the governmental funds.

 How are the internal service activities reported in the government-wide statements of net assets? How are they reported in the proprietary funds statement of net assets?

The internal funds are generally used to calculate the net assets which are included in the government funds. As such the relationship between the internal fund activities which is the health insurance of the employees, and the government fund is viewed as reduction negativity. This is to mean that the amount paid for activities in the internal fund is decreased from the government fund account.

 Did any of the internal service funds report significant operating surpluses or deficits for the year? Have any of these funds accumulated significant net assets balances over the years that were not invested in capital assets?

  1. Were any of the government’s enterprise funds “profitable” during the year? If so, what has the government done with the “earnings?” Has it transferred them to the general fund?

The convention centre bonds were especially profitable in the year 2009, earning a profit of $ 36.8 million. As compared to the other enterprise funds, the conventional bonds were not only the highest in profit making but also incurred the least liabilities. In the end the profit incurred from these bonds was transferred to the government funds. 

  1. If any of the internal service funds or enterprise funds were operating at a deficit, how is the operating deficit being financed?

The accounts in the enterprise funds were not operating in deficit. However, the hospital funds were not incurring any profit or loss. The amount of income was essentially equal to the liability. Though operating on such principles was difficult, the fund could easily experience great operational difficulties.

 Is there evidence that enterprise funds contribute amounts to the General Fund in lieu of taxes to help support services received by the enterprise fund?

 The enterprise fund taxes are issued as contribution to the government. The taxes are then used to fund the activities arising from the enterprise funds. For example the hospital funds are financed from taxes and the profits accruing are directed towards the government fund. As for all the taxes, they are collected by the municipal council and as such are used to develop any activities in the city. The result is a proper cycle.

 Are there receivables from other funds? If so, how are they presented in the fund statements; how are they presented in the government-wide statements?

There were receivables from interest and dividends in shares owned by the city. Investment in some shares provided an income of about $17 million. This was presented as a government asset in the city net assets calculations. The amount was also used in the comparison with the 2007 and 2008 amounts for the accruing year.

 Does the government have revenue bonds outstanding that are related to business-type activities? If so, for what activities?

The revenue refunding outstanding bonds go widely up to the financial year ending 2025. The total amount of revenue owed is $259,214,000, which consists of the principle amounts $184, 925, 000, with the interests accruing each year amounting to $74,289. The entire amount is not to be paid in the year 2025, since there are sums due in the periodic years between. However by 2025, the amount should be cleared.

 Do the financial statements include a statement of cash flows for proprietary funds? In how many categories are the cash flows presented? Is the statement on a direct or indirect basis?

There are statements of cash flow present for two types of proprietary funds that is the convention center funds and the hospital revenue funds. The presentation of the cash flow is in a direct manner not comparing or indirect relationships with others. The proprietary fund statements are presented together from the same cash flow accounts so that comparison is easy.

 Does the government maintain any fiduciary funds? If so, what are the funds and for what specific purposes have they been established?

Fiduciary account funds are used normally to establish the amount of money in circulation that is being held for others by the city. Fiduciary accounts in the statements are not presented in the government funds, but rather use the accrued accounting methods.

The Boston city has fiduciary accounts and statements for the employee retirement fund also known as the state Boston retirement scheme.  This fund accounts mostly for the net assets and liabilities of city employees. Its main purpose is to ensure that the employee’s investment for retirement is protected.


City of boston massachussets (june 2009): comprehensive financial report. Retrieved April

 19, 2010 from the website:


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