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Detroit is Not Broke!

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My friend, that means we are already sitting at over $12 billion in current assets, despite the CAFR statement of net assets claiming only $11 billion. And we've only looked at two types of funds.

How about the "discretely presented component units" (page 62-63)? They have assets of over $500 million, long-term debt of $166,728,140, and only reported as $214,130,890 or less than half their asset value.

Then you can read how some tricks work in the "Notes to financial statements":

(j) Deferred Revenue

Deferred revenue represents revenues received, but for which the revenue recognition criteria have not been met . Accordingly, these revenues are deferred until such time as the revenue recognition criteria is met.

(So why don't they refer liabilities until they are actually current liabilities?)

(k) Bond Premiums, Discounts, Issuance Costs, and Deferred Amounts on Refunding

In the government-wide and proprietary fund financial statements, bond premiums and discounts are deferred and amortized using the effective interest method. Issuance costs (deferred charges) and gains and losses (deferred amounts) on refunding are deferred and amortized over the life of the bonds using the straight-line method.

In other words, the liabilities reflect things like interest, so the actual liabilities of today are much less without future interest charges.

On page as "Interest paid on Bonds, Notes, and Leases", we see interest on just Enterprise funds at ($224,029,617).

I suggest reading the notes section.

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Clearly, the CAFRs need an independent audit, not from an emergency auditor who specializes in bankruptcy filing, but from a team of unbiased forensic accountants out to measure and present a realistic picture of Detroit's assets, liabilities, and projections for both in the future.

 

 

What about the surrounding area?

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http://newthinking.blogspot.com/

Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:
http://www.americaisnotbroke.net/

Scott is a former President of Common Ground-NYC (http://commongroundnyc.org/), a Geoist/Georgist activist group. He has written dozens of articles for (more...)
 

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Detroit is Not Broke!