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Introduction

Maryland is a state in the United States defined by its abundant coastlines and waterways in the Atlantic Ocean and the Chesapeake. Baltimore is its largest city and has a long history of major seaport. In the 17th and 18th century, the state economy was heavily centered on the cultivation of tobacco. However, the need to cheap labor saw its expansion over the years. By 2015, the state had a diversified economy ranging from biotechnology to manufacturing and service. This paper presents a Comprehensive Annual Financial Report (CARF) analysis for the state of Maryland. The state of Maryland had a transmittal letter in 2015 written by the state comptroller Peter Franchot. In the letter, the comptroller indicated that the state recaptured about $4.6 billion as a result of strategic investment in advanced technology. The state has also intercepted millions of dollars in child support payments and reunited more than $500 million in unclaimed property. The comptrollers reports that the state is focused on pursuing reforms aimed at ensuring the state achieves its long term goals. The comptroller reiterates that he is dedicated to serving the state of Maryland (Peter Franchot, 2016).

Certificate of Achievement for Excellence in Financial Reporting

The GFOA awarded a Certificate of Achievement for Excellence to the state for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2015. Lawrence J. Hogan Jr. was the governor of the state of Maryland in 2015. Kathleen Dumais a democrat was the house majority leader while Guy J. Guzzone was the senate majority leader. Harris Andy was the representative of congress district one as of 2015 (Peter Franchot, 2016).

An organizational chart was provided. The voters of Maryland were at the top of the chart then followed by the governor. The executive, judicial and legislative departments of state followed in the chart. Principal executive departments followed in the chart.

Finance

Report from the Independent Auditor

SB & Company LLC audited the financial statements of the State of Maryland. The opinion of the auditor on the financial statements was that the statements were free from material misstatements, were prepared consistent with to the principles of accounting accepted in the United States. They also presented a true perspective of the State’s performance and position for the fiscal year 2015. (Peter Franchot, 2016).

Management's Discussion and Analysis

The management of the state provided this overview of financial activities in 2015. Condition of government is estimated by the income from all sources minus expenditure. Maryland government revenue in 2015 is $38,214,220 governments have generated additional 7% revenue comparatively last year 2014 it was $35,413,019. In term of expense Maryland expenditure in 2015 are 40,060,785 which were 38,413,090 in 2014 (Peter Franchot, 2016). It reveals that Maryland generated 7 Percent additional revenue by just increase four percent in expenditure side we can say that government performance is quite better than 2014. Budge revenue Collection was expected in 2019 $17,762,928 and actual revenue collection is 18,186,189 which is 2% more than expected revenue. Expected budgetary expenditure in 2015 are $18,049,565 actual expenditure in 2015 was $17,686,333 which indicate that government has reduce it 2% of its expenditure than estimated expenditures (Peter Franchot, 2016).

Basic Financial Statements

SB & Company LLC audited the financial statements of the State of Maryland. The opinion of the auditor was that the statements were free from material misstatements, were prepared based on the accounting principles not only I US bust across the world, and they presented a true and fair view of the State’s performance and position for the year financial year 2015.

Financial Statements Notes

This section provided extra financial information that is critical for understanding the financial statements for the state of Maryland. The government financial statements reports on all non-fiduciary activities of the state as well as its component units. The statement of activities shows the level in which a given segment or function of offset by program revenues. The state reports various major governmental funds including enterprise funds, special revenue fund, general fund, and fiduciary funds.

Required Supplementary Information

The auditor did mention internal controls in their report. The auditor however did not give an opinion on the entity’s internal controls. Instead, they gave a disclaimer that they only considered the internal controls to help in developing appropriate audit procedures and not to give an opinion on them

Governmental Funds

Two Government Funds have been provided as major funds on the statements. They include the “General Fund and the Special Revenue Fund” (Peter Franchot, 2016). The total assets amount for the state is $ 8,759,967. For Government Funds, Federal Revenue accounted for the largest source of revenue at $ 12,378,980, 000. For Government Funds, Health and Mental Hygiene accounted for the largest expenditure at $ 14, 295,022,000. The entity has special revenue funds which are include in the reportas major governmental fund. The State of Maryland maintains 5 government funds. The State maintains permanent funds. They include the state reserve fund and the current restricted fund. The total fund balance on the state’s balance sheet was $ 8,759,967,000 (Peter Franchot, 2016).

Proprietary Funds

Proprietary funds also known as enterprise fund are Government-Owned fund aims to provide goods and services in exchange of fee Maryland government has Total Six enterprises fund, out of which four are Major enterprise fund. Name of these funds are “the employment loan program, Economic development program, the Maryland lottery and Gaming control agency and the Maryland transportation authority” (Peter Franchot, 2016). Operating income of all enterprise funds are positive except economic development loan program. This program has negative operating income worth ($8,407,000), unemployment loan program has positive operating income worth $36,203,000, Maryland lottery and gaming fund had positive operating income worth $1,319,016,000, Maryland transportation authority has positive operating income worth $862,534,000. Maryland has three major and four non major internal services fund (ISF). Major internal services fund includes “Maryland higher education Activities, Maryland Prepaid College trust and Maryland Stadium Authority and Non Major includes Maryland Food center, Maryland environmental services, Maryland industrial development financing authority, and Maryland technology Development Corporation” (Peter Franchot, 2016).

Fiduciary Funds

Maryland offers all 4 types of Fiduciary fund. Fiduciary fund are used to provide resources for the wellbeing of other entities outside the jurisdiction. Fiduciary fund include “pension fund, employee benefit Trust fund, investment trust fund, and agency fund” (Peter Franchot, 2016). Maryland pension and employee benefit trust fund are “Retirement and pension fund system, the Maryland transit administration pension plan, the postretirement health benefit and the deferred compensation plan” (Peter Franchot, 2016). “The investment trust fund includes transaction assets, liabilities and net position of an external investment pool. Agency funds account for the Assets held for distribution by the state agent for the other organization” (Peter Franchot, 2016).The component units for the state of Maryland are based on the auditor’s report. Maryland Technology Development Corporation is one of the component units for the state. The stare of Maryland had an individual fund schedule in 205bthat was well outlines in the CAFR.

Statistical section

The unemployment rate for the State of Maryland in 2019 was 3.9% and the per capital income was $ 62,914. This was higher than the national unemployment rate. The total population in 2019 was 6,042,718 and the school enrollment was 1,019,971. This was a significant improvement from the unemployment rate 0f 7.7% recorded in 2010. This is an indication that the state needed to do better in terms of widening the economy to reduce unemployment rate. The following graph shows the rate of unemployment rate in the State of Maryland from 2015 to 2019.

References

Peter Franchot, (2016), comprehensive annual financial reports of the State of Maryland fiscal year ended June 30, 2015.

Peter Franchot, (2019), comprehensive annual financial reports of the State of Maryland fiscal year ended June 30, 2019.

Unemployment rate in maryland from 2015 to 2019

Year

Unemployment rate