Condition Of The Cities: A View From The CAFRs

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
Dwayne McSwain PhD, Associate Professor (Creator)
Appalachian State University (ASU )
Web Site:

Abstract: The “Great Recession” created continuing financial challenges for governments, particularly cities. Many cities faced lower tax bases—including lower property values, lower taxable incomes and lower taxable sales—and reduced state financial assistance. Some were required to fund various costs previously borne by states. Such fiscal stress increases risks in governments on several dimensions, including: entering into an ill-advised agreement that transfers unreasonably large amounts of future revenues from public facilities to another party in exchange for current payments that relieve current-year budgetary pressures; inappropriate charges of expenditures to restricted revenue sources—whether from restricted grants or restricted tax revenues; misapplication of accounting guidance—perhaps to shield resources from expenditure in the current period. Currently, governments are finding that implementing the Governmental Accounting Standards Board’s (GASB) new statement on fund balance classification and fund type definitions can require reclassifying large amounts of fund balance from special revenue funds or general fund reserves into general fund unassigned fund balance, exposing those amounts to undesirable expenditure pressures.

Additional Information

Kinnersley, R., McSwain, D., & Shoulders, C. (2011). "Condition of the Cities: A View from the CAFRs." Journal of Government Financial Management, Winter 2011. Vol. 60, No. 4. Copyright (2011 & 2019). Association of Government Accountants. AGA® and the Journal of Government Financial Management® are registered trademarks. Republished with permission of author(s). All rights reserved. Publisher version of record available at:
Language: English
Date: 2011
fund balance classification, fund type definitions, financial challenges, cities, GASB, expenditures, lower tax bases

Email this document to