Budget Management Functions: Financial Evaluation

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Budget Management Functions: Financial Evaluation

Financial planning and budgeting are claimed to be vital in public organizations, but how can you tell if all that planning actually is paying off? The answer is simple: by conducting financial evaluations. Evaluating financial activities primarily consists of performing independent audits and reviews, which look for errors or abuses in financial reports and compliance with laws and regulations. Auditing is, in fact, a requirement in most government organizations for a variety of reasons that you will consider this week.

This week, you focus on auditing practices and processes. You also explore how audits can help ascertain the financial condition, efficiency, and effectiveness of a program or organization.

Learning Objectives

Students will:
  • Evaluate the use of auditing concepts and practices
  • Evaluate the financial condition of an organization

Assignment: Application: Assessing Financial Condition

The regular evaluation of an organization's finances goes a long way toward establishing trust with stakeholders, such as tax payers, board members, clients, patrons, and funding agencies. Just as financial planning and budgeting are integral parts of an organization’s success, financial audits and evaluations are vital parts of the functioning of an organization. Evaluating the financial condition of an organization involves determining whether it has the revenue from taxes, fees, and other sources to meet its needs as well as if its assets exceed its liabilities. Assessing the financial condition is really just an analysis of the city's financial health.

In this Assignment, discuss the city in which you live and then evaluate its financial condition and opportunities for growth by addressing the bulleted statements below. Be sure to first review your readings and then research additional resources to assist in your evaluation. For example, it is helpful to examine available data and other public documents for that city. These resources are useful and should be incorporated into your paper, but remember that those resources do not count as scholarly (peer-reviewed, academic articles and texts).

To complete:

Write a 6- to 8-page paper (not including title page and reference page) that addresses the following:

  • Describe your local city or county entity. Include descriptive information as population, trends, and other important demographical information. (1 page)
  • Look at the largest source of taxes in the city, which could include sales tax, property tax or income tax. Is your entity’s revenue and expenditures balanced? Why or why not? In your assessment, consider the following three factors: amount of revenue that the entity is collecting, the percentage of total revenue contributed by sales tax, how much the city is spending. (2 pages)
  • Consider these six important factors that impact city revenue: Deterioration of revenue base, internal procedures or policies that may adversely affect revenue yields, over-dependence on obsolete or external revenue sources, changes in tax burden, poor revenue estimating practices, and inefficiency in the collection and administration of revenues. Select two that apply to your city, and then evaluate how these impact your city. (1- 2 pages)
  • You propose to increase city tax revenue, and you know from your course readings that price elasticity and demand are important considerations. Understanding the characteristics of your city, evaluate whether the following three tax increase options would be effective assuming all would be legally possible: 1) a .5% increase in sales tax, 2) a 3% increase in restaurant tax, and 3) a 5% increase in tourism tax. In your evaluation, consider price elasticity and positive and negative externalities for each type of tax.This is where knowing your city and its major sources of revenue are especially important. (1 – 1 1/2 pages)
  • As part of your conclusion, provide one recommendation to improve the city’s financial health. Examples may include (but are not limited to) the need to shift public or customer service priorities or a need to shift policies because of a loss of competitive position. Be creative – one suggestion may be to research examples of other similar cities and determined what changes have worked for them. (1/2 - 1 page)

Use proper APA formatting and include the following:

  • A title page and running head
  • An introduction that states the purpose of the paper
  • Level 1 headings to define each part (bullet) of the paper
  • A conclusion to synthesize the entire paper
  • A minimum of three additional scholarly sources to support your paper
  • In-text citations as appropriate
  • A reference list

some sources to read these will be helpful

Aikins, S. K. (2011). An examination of government internal audits' role in improving financial performance. Public Finance & Management, 11(4), 306–337.

Retrieved from the Walden Library databases.

Cromwell E.; Ihlanfeldt K. (2015). Local Government Responsibility to Exogenous Shocks in Revenue Sources: Evidence from Florida 68 (2), 339.376. Retrieved from http://coss.fsu.edu/keith-ihlanfeldt/wp-content/up...

the local city you will write on and search on is Fargo, North Dakota
please do not write another city

Linnas, R. (2011). An integrated model for the audit, control and supervision of local government. Local Government Studies, 37(4), 407–428.
Retrieved from the Walden Library databases.
Mikesell, J. L. (2018). Fiscal administration: Analysis and applications for the public sector (10th ed.). Boston, MA: Wadsworth.
  • Chapter 3, "Budget Methods and Practices" (pp. 106-142)
  • Chapter 8, "Taxation: Criteria for Evaluating Revenue Options" (pp. 354-400)

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Explanation & Answer

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Financial Condition
Institution Affiliation
Instructor’s Name
Student’s Name
Course Code



Financial Condition of Fargo, North Dakota City
Evaluation of the financial condition of an entity or city provides adequate information
for investments and employment opportunities in the area. In most cases, the financial evaluation
established the regulation, policies, and procedures that are observed to develop a close
relationship with the locals, private and public sectors. Over the last few years, various cities in
the United States have established financial projections and plans for the next ten years.
Therefore, the report target to highlight, discuss some of the financial issues, and the possible
changes to implement in Fargo, North Dakota city. The discussion will describe the local city
demographics and markets trends, sources of taxes, and revenue expenditure. Secondly, the
paper will analyze the critical factors that influence revenue growth and evaluate how they affect
the city. Additionally, the discussion will propose some of the best tax increase policies for
revenue generation in the city by addressing the price elasticity and externalities of the proposed
tax policies. Lastly, the evaluation of financial condition will provide one recommendation to
improve the city’s financial health.
Description of the City
Fargo is a city with the largest population in the state of North Dakota. According to the
2017 estimated census report, the city population was 122,359. That is, 17% of the state
population leaves in the city. At the same time, it is the 225th most populous city in the United
States. Fargo was founded in 1871 on the Red River where it is made up of health care,
education centers, industrial centers and retail stores around eastern North Dakota (Leistritz,



Recently, the city has expanded rapidly since the 1980s because of the growth of the
residential population in the south and southwest areas. Further, private developers have invested
in the city for developments of real estates, industries and rehabilitation process of the houses
within the city. At the same time, the city is the home for the largest Shopping mall the West
Acres, which has become the catalyst for the retail and economic growth in the city.
Additionally, the city’s law and governments create the policies and regulations that govern
businesses and traders in the city. Thus, Fargo is run by four commissioners and ...

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