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CMFO Exam > Capital Fund > Flashcards

Capital Fund Flashcards

1
Q

JE To Record Bond Ordinance

A

Debit: Funding (CIF, Down payments on improvements deferred charges to future taxation
Credit: Improvement Authorization Funded, Improvement Authorization Unfunded

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2
Q

JE Memo Entry

A

Debit: Estimated Proceeds of Bonds or Notes Authorized but not issued
Credit: Proceeds of Bonds or Notes Authorized but not issued

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3
Q

JE Sale of Notes

A

Debit Cash
Credit: Bond Anticipation Notes Payable
Debit: Proceeds of Bonds and Notes Anticipated but not issued
Credit: Estimated Proceeds of Bonds and Notes Anticipated but not issued

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4
Q

JE: Set up Ordinance which is completely funded by Capital Improvement Fund

A

Debit: Capital Improvement Fund
Credit: Improvement Authorization Funded

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5
Q

JE: Cancel unexpended balance of fully funded improvement authorization

A

Debit: Improvement Authorization Funded
Credit: Capital Improvement Fund

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6
Q

JE: To set up ordinance fully funded but through various sources

A

Debit: Fund Balance and Capital Improvement Fund
Credit: Improvement Authorization Funded

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7
Q

JE: To cancel ordinance fully funded through various sources

A

Debit: Improvement Authorization Funded
Credit: Fund Balance (always goes back to Fund Balance if through mixed sources)

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8
Q

JE: Set up Ordinance which involved mixed financing (funded and unfunded)

A

Debit: Capital Improvement Fund, Deferred Charges to Future Taxation Unfunded, Fund Balance, Capital Reserve
Credit: Improvement Authorization Funded
Improvement Authorization Unfunded

Memo Entry for unfunded portion
Debit Estimated Proceeds of Bond and Notes Authorized but not issued
Credit: Proceeds for Bonds and Notes Authorized but not issued

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9
Q

JE: Cancel Ordinance which involved mixed financing (funded and unfunded)

A

Debit: Improvement Authorization Unfunded and Improvement Authorization Funded
Credit: Capital Improvement Fund, Deferred Charges Unfunded, Reserve, Fund Balance

Memo entry for unfunded portion - Reverse
Debit: Proceeds for Bonds and Notes Authorized but not issued
Credit: Estimated proceeds for bonds and notes authorized but not issued

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10
Q

JE: To set up contracts payable or accounts payable or retained percentage due to contractor

A

Debit: Improvement Authorization Funded & Unfunded
Credit: Contracts Payable / Accounts Payable / Retained percentage due to contractor

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11
Q

JE: Set up reserve for preliminary expenses

A

Debit: Capital Improvement Fund
Credit: Reserve for Preliminary Expenses

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12
Q

JE: To Set up over-expenditure of ordinance appropriations

A

Debit: Over-expenditures
Credit: Improvement Authorization Funded or Unfunded

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13
Q

JE: To set up interfund when budget appropriations have not been disbursed to the General Capital Fund

A

Debit: Due From Current Fund
Credit: Capital Improvement Fund, Down Payments on Improvements, Deferred charges to future taxation - unfunded

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14
Q

JE: Issuance of Bond Anticipation Notes

A

Debit: Cash
Credit: Bond Anticipation Notes

Debit: Proceeds of Bonds and Notes Authorized but not issued
Credit: Estimated proceeds of bonds and notes authorized but not issued

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15
Q

JE: Issuance of General Serial Bonds

A

Debit: Cash
Credit: General Serial Bonds
Accrued interest on Sale (due C/F MRNA)
Accrued interest on Sale - Reserve Interest Payable
Fund Balance (Premium on sale)

Debit: Proceeds of Bonds and Notes Authorized but not issued
Credit: Estimated Proceeds of Bonds and Notes Authorized but not issued

Debit: Deferred Charges to Future Taxation Funded
Credit: Deferred Charges to Future Taxation Unfunded

Debit: Improvement Authorization Unfunded
Credit: Improvement Authorization Funded

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16
Q

JE: Reflect Payment of General Serial Bonds by current Fund

A

Debit: General Serial Bonds Payable
Credit: Deferred Charged to Future Taxation Funded

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17
Q

JE: Reflect Payment of BANs by C/F

A

Debit: BANs Payable
Credit: Deferred Charges to Future Taxation Unfunded

18
Q

General Improvements

A

Borne by taxpayers of entire community

19
Q

Local Improvements

A

Borne by owners of properties specifically benefited by the improvement

20
Q

Down Payments on Improvements

A

NJSA 40A 2-11

  • Cash down payment - 5% of amounts of bonds or notes authorized by bond ordinance
  • Usually funded through Capital Improvement Fund - Transferred from C/F
21
Q

“Down Payments on Improvements” in Current Fund Budget

A

-usually associated with emergency appropriations when there is not sufficient money in the CIF

22
Q

Capital Improvement Fund

A
  • used as down payment or to fund a portion or all of project, used for preliminary expenses
  • Transferred from Current Fund Budget to CIF
  • No time limit to be expended
23
Q

Capital Surplus

A
  • Results when a project has been fully funded and the total amount of cash available has not been needed for completion of the project.
  • Cancellation results in Capital Fund Balance
24
Q

Specific Reserves

A
  • Appropriated in Current Fund Budget for specific capital fund projects
  • Funds then transferred to Capital Fund
  • Reserve may be accumulated through the years - “ pay as you go”
25
Q

Improvement Authorizations

A

-Appropriations created by ordinance to give spending authority for project

26
Q

External Sources of Fund

A
  • Sale of Bonds or Notes
  • donations
  • state and federal grants
27
Q

State and Federal Grants as Sources of Funding

A
  • if on draw down basis or cash is on hand, then can be used as down payment
  • If reimbursable, can not be used as down payment
  • When anticipated, authorize debt in full amount, once funds are received then reduce debt authorized.
28
Q

Bond Ordinance

A

No Expenditure may be made from any of the above sources of funding without adoption of an ordinance describing the project and specifying source of funding

29
Q

Local Bond Law

A

NJSA 40A-2

30
Q

Capital Budget in Local Budget

A
  • Capital Budget required for sum of line item is over $25,000 and/or capital ordinance is foreseen.
  • For municipalities with population 10,000+, 4 to 6 years
  • For municipalities with population under 10,000- 3 years; can omit capital plan if expenditures less than $25,000 in the three previous years
  • statement of intent, does not commit
31
Q

Capital Plan

A

Moving schedule or timetable of major construction projects and other improvements.
-Each year the program is reviewed, revised and projected another year ahead.

32
Q

Methods of Financing

A
  • Bond Ordinances - Establishes spending authority and gives authorization to issue debt
  • Capital Improvement Fund
  • Capital Fund Balance
  • Re-appropriation Ordinances
  • Current Fund Appropriation - Pay as you go
  • Deferred Charges to Future Taxation- Ordinance has been adopted but no bonds or notes issued
  • Resolution for Preliminary Plan expenses
33
Q

Authority to Spend for Capital Projects

A
  • Capital Budget does not appropriate funds

- All appropriations made through current budget, ordinance, capital surplus or reserve

34
Q

Purpose for which bonds can be issued

A
  • borrow money for capital improvement for property that lawfully may be made or acquired, or for any purpose for which the local unit lawfully may make an appropriation
  • Can not authorize for improvement or purpose having useful life less than 5 years
  • Bond ordinance averages useful life of all projects
  • Repairs to equipment that extend life 5+ years can be bonded
35
Q

Capital Budget Amendments

A

-Capital Program can be amended by resolution and filed with DLGS within 3 days

36
Q

Bond Ordinance Contents

A
  • authorization to issue obligations
  • statement of estimated amounts
  • estimated cost of each purpose
  • useful life of each purpose
  • average useful life of all purposes
  • statement that SDS has been filed
37
Q

Bond Ordinance Intro & Adoption

A
  • Introduced by majority vote
  • Ordinance must be published with notice of its introduction and the date, time and place of hearing
  • Hearing must be 10 days after introduction
  • Publication must be one week prior to adoption
  • At hearing can be read by title if full ordinance was posted on bulletin, otherwise read in full
  • Adopted by 2/3 full membership
  • Adopted ordinance must be published in summary
  • Take effect 20 days after first publication of final adoption
38
Q

Estoppal Period

A

-20 days after first publication of final adoption

39
Q

Bond Ordinance Amendment

A

-If amendment is substantially altering matters, determined by bond counsel, the ordinance can not be adopted until at least one week after such amendment and publication at least 2 days prior to date for further consideration

40
Q

Accrued Interest

A
  • If settlement occurs before July 1st, it is used to pay portion of the interest on the bonds that fall in current year (6 months after date of bonds)
  • If settlement occurs after July 1st, no interest will be payable during the current year. May be considered anticipated revenue in C/f budget to offset budget appropriation for Interest on Bonds
41
Q

Premium from sale of bonds

A

-Goes to Capital Fund Balance

42
Q

Refunding Bonds

A
  • Issued in same general form as regular bonds

- Need approval from Local Finance Board

CMFO Exam (12 decks)

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