Discuss AGA GAFRB Exam Topic 2 Question 21

When a rural community creates a fire district to serve an area previously served by the county government, and the fire district receives no money or equipment from the county, this is an example of

Aa government merger.

Ba government acquisition.

Ca transfer of operations.

Dintergovernmental operations.
According to GASB Statement No. 69 (Government Combinations and Disposals of Government Operations), a transfer of operations occurs when one government relinquishes or ceases operations and another government assumes those operations, but no significant consideration (money, assets, or liabilities) is exchanged.
In this case, the fire district is assuming responsibility for fire protection without receiving funds or assets from the county. That aligns with the definition of a transfer of operations --- not a merger or acquisition.
Relevant Reference:
GASB Statement No. 69 -- Government Combinations and Disposals of Government Operations
GASB Codification Section G60 -- Combinations and Transfers
GFOA Guidance on Intergovernmental Restructuring
Answer : C. a transfer of operations

Suggested Answer: C

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21 comments · newest first

Leslie 2 days ago

Plus, no assets exchanged makes it clear.

Valda 7 days ago

Exactly! Just a shift in responsibility.

Alayna 12 days ago

I feel like A and B are misleading. No merger here!

Lenora 18 days ago

Right! It fits the definition perfectly.

Leslie 23 days ago

Agreed! They’re taking over without any funds.

Valda 28 days ago

I think it's definitely C. A transfer of operations.

Claudia 1 month ago

Same here! The explanation really helped clarify it.

Leah 1 month ago

I feel confident about this one. C makes the most sense!

Dahlia 1 month ago

Right! No money exchanged means it's definitely a transfer.

Maurine 2 months ago

I almost chose D, but it doesn't fit the definition.

Floyd 2 months ago

Agreed! The fire district is taking over without any funds.

Lavera 2 months ago

This question is tricky! I think it's C. a transfer of operations.

Rosenda 2 months ago

Totally agree, C is the correct answer!

Carman 2 months ago

Wait, how can they operate without any support?

Rusty 2 months ago

Seems right, but why no funding from the county?

Sherell 3 months ago

I thought it was a merger at first!

Kattie 3 months ago

This is definitely a transfer of operations.

Andra 3 months ago

Based on GASB Statement No. 69, it seems clear that since no assets or money were exchanged, it must be a transfer of operations. I’ll go with C.

Paola 3 months ago

I’m a bit confused because I thought a merger involved more collaboration between governments. Does this really fit the definition of a transfer of operations?

Leonor 3 months ago

I remember practicing a question similar to this where a city took over a service from the county, and it was classified as a transfer of operations. So, I feel confident about choosing C.

Lashanda 4 months ago

I think this is about how one government takes over the functions of another, but I'm not entirely sure if it's a transfer of operations or intergovernmental operations.

AGA GAFRB Exam - Topic 2 Question 21 Discussion