Accounting Implications of Operating Golf Courses as Part of

School: Colorado State University, Global Campus - Course: ACT 555 - Subject: Accounting

Many cities in Florida operate municipal golf courses.In recent years, tourism and the popularity of golf have fallen off, leading the golf courses to operate at a loss, often up to $1 million per year.Supporters of the golf courses note that the municipal courses are part of the cities' Parks and Recreation departments which benefit the entire community, while others have criticized the local governments for injecting money into a business that should be funded primarily through user charges. What are the accounting implications of operating the golf courses as part of the General Fund rather than an enterprise fund? What are some other options you would suggest for the cities and what questions would be associated with those alternatives? What are the accounting implications of operating the golf courses as part of the General Fund rather than an enterprise fund? According to the Governmental Accounting Standards Board (GASB), the general fund is the government's primary operating fund that is used to account for all resource inflows and outflows not associated with another fund. It is utilized for the core administrative activities and operational tasks of the government entity. On the other hand, the enterprise fund is a self- supporting government fund that is used to report activities, goods, and services provided to the public in exchange for a fee. Since golf courses are only used by privileged persons, not by the major populace, the establishment of municipal courses will not benefit the community at large. In this case, if such golf courses are accounted for using the general fund rather than the enterprise fund, there will be serious accounting implications that will diminish the usefulness and effectiveness of the end product statements of financial information (Reck et al., 2022). Also, since annual appropriated budgeting plans are legally required for the general fund, the budgetary information may be no longer applicable as golf services are included in the essential activities funded by the said fund. What are some other options you would suggest for the cities and what questions would be associated with those alternatives? In my opinion, the government of Florida should include the operations of golf courses activities in the enterprise fund since generally, this service will only benefit a certain group of people, not the whole community. They should impose to pay fees that comprise the enterprise fund in

accumulating the aggregate direct and indirect costs in providing services for private individuals and business industries. However, considering the supporters of golf courses that claim municipal courses are part of the cities' Parks and Recreation departments, there will be questions that can be associated with this option, for example, "how can they be assured of the fees they pay for the service charges in golf activities?", and "what can be the solution to lessen the fees charged for availing such services?"