Chapter+9+HW+Solutions+to+Cases

Chapter+9+HW+Solutions+to+Cases - Solutions to Cases 9-1...

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Solutions to Cases 9-1. a . ABC organization is a component unit of Mason County. The organization is not fiscally independent since the county has the authority to modify and approve the capital budget. Therefore, the county is financially accountable for ABC. b . The Atkins Convention and Visitor’s Bureau is a component unit of the City of Atkins. Since the city has the right to approve the rate of the tax (i.e., the city sets the tax) it has the ability to impose its will on the Convention and Visitor’s Bureau through its control over revenue. Because the city can impose its will on the Convention and Visitors’ Bureau it is financially accountable for the bureau. c . The Sports Authority is not a component unit of Dawson County. As indicated, the Sports Authority is a legally separate entity with its own board; therefore, the only question is if there is fiscal dependency on the county. Since the actions of the Sports Authority are voluntary and the recommendations of the county need not be incorporated, no fiscal dependency is created. d . The County Aviation Authority is a component unit of the City of Middle Falls. If the city is legally obligated to assume debt responsibilities in the event of a default a financial burden has been imposed on the city; therefore, the Aviation Authority would be considered a component unit.
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