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Discussion Questions
1. if an internal service fund is making a profit does that mean the billing rate for internal customers should be reduced to get this back to a break-even proposition? Why or why not?
2. if a government agency can operate an internal service fund at a profit, shouldn’t it try to do so to save the taxpayers some money? Explain.
3. doesn’t operating any government unit at a profit go against the grain of what a not-for-profit organization is all about? If not, why not? If so, then why allow it?
4. why do you suppose this is the case: “GASB does not permit separate display of the realized and unrealized components of the change in fair value, with the exception of external investment pools.” Is there something that might cause a distortion in the financial reporting if this disclosure were allowed?
5. under a defined benefit plan how does an employer know how much to contribute per employee to insure there is enough in the retirement fund to pay for the employees pension when they retire?
6. what does the schedule of funding progress report show financial statement readers and why is it important?
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