CGFM Flashcards
Government Environment
1
Q
What is the different between “government sovereignty” and “popular sovereignty”?
A
Government sovereignty - National government cannot be sued by states or citizens without its permission. Accountable to citizens
Popular sovereignty - Citizens hold ultimate authority through the ballot.
2
Q
What is the implication of “reserved clause” in 10th Amendment to the US Constitution?
A
Powers not delegated to the national government, nor prohibited to the states, are reserved to the states and the people.
National government can influence lower levels, but cannot dictate how state and local government will operate.
3
Q
What is the implication of doctrine of separation of powers?
A
Legislation - Oversight of executive branch operations and programs.
Each branch of government is granted powers that constrain the other two.
The judicial branch can declare that laws passed by the legislature and signed by the chief executive are unconstitutional.
4
Q
From where do local governments derive their authority to exist?
A
State statutes and US Constitution.
5
Q
What is a special-purpose government?
A
Perform only 1 or 2 functions, such as education, water supply, and environment monitoring.
Created from general-purpose government, local ordinance or ballot initiative.
6
Q
Give an example of a permanent and a temporary commission.
A
Permanent: Federal Trade Commission (FTC).
Temporary - National Commission on Terrorist Attacks Upon the US.
7
Q
What are the characteristic of government corporations?
A
Formed to conduct fee-based, businesslike functions.
Have fewer regulations and restrictions than general-purpose entities.
Their proliferation can lead to fragmentation in government services.
8
Q
Over the past decades, what has been the trend in the number of governmental entities?
A
General-purpose - Held constant.
Special-purpose school districts - Consolidated/ reducing their number.
No-school and special purpose - Significant increase.
9
Q
What are the distinction between policy and administration, as it applies to government?
A
Executive - Implements policies and administer programs (resembles an operating unit of a for-profit business where it executes policies that were developed elsewhere).
Legislative - Develops policies that establish and guide programs.
10
Q
What is the difference between local charters and local ordinances?
A
Charters - Basic authority by which a local government operates = State’s constitution.
Ordinance - Local laws = State statute/ US code.
11
Q
What prevents the executive branch from spending whatever it desires on government programs?
A
Legislative - “Power of the purse.”
Executive - Can only spend what has been authorized and appropriated by the legislative branch.
12
Q
How does the judicial branch exercise its power vis-a-vis power the legislative and executive branches?
A
Judicial - Thru review it has power to declare laws/ statutes unconstitutional and intervene in disputes involving the other two branches.
13
Q
How does tribal councils exercise sovereignty on tribal lands?
A
Tribal govt: Nation-to-nation relationship with US, not subordinate to states, establish businesses/ public safety mechanisms, adopt/ enforce their own civic codes, license activities/ collect taxes within tribal areas.
Tribal council determines criteria for legal membership/ eject nonmember from tribal lands.
14
Q
What are responsibilities of tribal council?
A
Must pay federal income tax (some exemptions apply).
May levy/ collect taxes on activities conducted on tribal (reservation) land (which is exempt from local real estate taxes).
15
Q
What is object class control?
A
A state legislature establishes limits on fund that can be spent on salaries, equipment, utilities, supplies and travel.
16
Q
What is the primary financial control device used in government?
A
Appropriated budget and a system of budgetary accounting. The budget is a law.
17
Q
What is the primary reason for establishing a special fund?
A
To ensure specially-identified (or dedicated) revenues are applied to specific programs (ex: gasoline taxes are for highway repairs).
18
Q
What are the purposes of the budget process?
A
Establishes govt priorities (establish goals to guide decision-making within agencies).
Communicates public values/ policies (develop approaches to achieve goals with available resources).
Plan future govt expenditures (make funding adjustments based on past performance)
19
Q
What are the relationships among appropriations, apportionments, and allotments at national level?
A
Appropriations are budget law passed by Congress.
OMB apportions budgetary authority to major departments/ components of govt.
Major dept further distributes the budgetary authority within its own organization (“down the chain”) by issuing allotments.
20
Q
What is reprogramming?
A
When executive submits a requests to legislative branch for approval to move funds from one appropriation line item to another (usually after operations when added funds are needed/ priorities have shifted).
Reprogramming is sometimes necessary can happen at any phase of the management.
21
Q
What limits the practice of government borrowing at various levels of government?
A
National level - Debt limit can only be raised by an act of Congress (occurs frequently). The national borrows for both operational and capital expenses.
State constitutions/ local charters - Limit borrowing to capital improvement projects. Cannot borrow to cover operational expenses.
Usually, a proposed govt debt issue must be put in a referendum (must approved by voters before borrowing can take place). Also, many bond covenants limit future borrowing until debt issue associated with the covenant is paid off.
22
Q
What office mostly likely to provide preliminary budget targets to executive agencies?
A
- National - OMB
- State - State Budget Office/ CFO
Legislative Services Agency (LSA) - Advises legislative on fiscal matters, not provide preliminary budget targets.
State Auditing Agency assesses accountability.
The GAO, like OMB but does not provide preliminary budgets targets.
23
Q
What are the purposes of the reporting process?
A
Financial mangers endeavor to present operating results according to GAAP.
24
Q
What are the purposes of the auditing process?
A
External auditors evaluate whether operating results have been presented according to GAAP.
25
Why can the use of earmarks be controversial?
It bypass normal budget process, so certain programs/ objectives receive "set aside" funding without "competing" with other programs for scarce public funds.
26
What are techniques used by Federal Reserve System to achieve monetary policy?
Buying/ selling government bonds.
Altering the reserves amounts that other banks must keep on deposit with Federal Reserves Bank.
Changing interest rate it loans funds to other institutions.
27
What is the relationship between the strategic plan and the budget?
Strategic - Longer-term (3 - 6 years), should always be integrated with budget plan.
Budget - Shorter-term (1 - 2 years), reflects current plans for achieving long-term goals.
28
What are the purposes of the planning phase?
The most emphasis between auditing and programming. Some levels occur throughout the year.
29
What are the purposes of the programming phase?
"Make or Buy" decision when officials link goals/ objectives to resources.
30
What are types of budget?
Operations
Cash Flow
Capital
31
What is the purposes of forecasting with regard to the budget?
Determine economic activity and trends, and how they will impact revenue and expenses.
32
What publication of national government provides an effective guide to internal controls and be applied at all levels of government?
Standards for Internal Control in the Federal Government published by US GAO.
33
What information support financial accounting?
Information of expenses and intergovernmental transfers. fund levels and disbursements, deposits of earmarked receipts.
Both financial and non-financial information are required to evaluate the achievement of program outcomes.
34
What report makes financial results easier for general citizen to understand?
Popular report - Annual financial reports that have been summarized and presented in a manner easy for typical citizens to comprehend.
35
What body defines GAAP for national, state and local?
National - FASAB
State and Loca - GASB
Private sectors - FASB
36
What different between internal and external reports?
External - Formal and required at end of reporting period. Format/ content is prescribed by GAAP, legislation/ covenants.
Internal - Issued at time and in format useful to management.
37
Who are required to issue performance report?
GASB recommends state government, but not require to issue one.
OMB provides detailed instructions to all federal agencies for completing the Performance and Accountability report.
38
What is progressive tax?
US income tax - Tax rate rises with income.
39
What is tax expenditure?
Exemption, credit/ reduction in tax liability to promote certain desirable activities, such as deduction on home mortgage interest/ energy-efficient windows installation and credit for adoption costs.
40
What are different types of taxes and which one is the most significant source of revenue for local government?
Property tax - Maine source of revenue for local govt, based on appraisal to determine market value.
Income tax - Respond to changing economic conditions, based on expert assessments, compliance rates are high.
Estate -
Use -
Sales - Consumption
Excise - Consumption
VAT - Consumption
41
What is project grant?
Discretionary and based on completion and peer review.
Provide funding for narrowly-defined purposes for a limited period of time and amount of expenditures.
42
What is block grant?
Devolution - Transfer resources to state/ local governments and allow maximum local discretion in how the resources are applied.
43
What is formula grant?
Program guidelines determine amount to be transferred from grantor to grantee if basis eligibility requirements are satisfied.
Both Categorical and Block are formula grants (many grants support education).
44
What is a cross-cutting requirement?
One that is broad in nature, such as recipients must comply with environmental impact standards.
45
What are license fees used for?
To regulate both business and non-business activities. The fees obtained from the program are used to pay for administering the program.
46
How are donations different from user fees and taxes?
Donations - Voluntary. No privileges on the donor.
Taxes - Involuntary.
User Fees - Convey privileges on the donor.
47
How are legal debt limits established?
State constitution/ statutes establishes legal debt limits.
48
When and why does restructuring of debt incur?
Entities issue new debt at lower interest rates to pay off older debt to save money.
The debt program must produce enough funds to complete the project in order to be effective.
49
What interest to a credit-rating agency?
Details of the bond covenant.
Qualifications/ authority of officials who will manage the debt.
Current debt issues outstanding.
50
What is Certificates of participation (COPs)?
What is Local Government Investment Pool (LGIP)?
What is the most impact of having a bond issue insured by a 3rd party, such as Assured Guaranty Corporation or Build America Mutual?
Investors who have right to receive a portion of lease payments from long-term financing debt (bond), such as bank provides financing for a new building and govt signs a long-term lease, then bank sells "shares" to investors.
Operates like a mutual fund, but investors are exclusively gov. May contain only local govt resources or mingle state/ local govt funds.
The govt can issue the debt at a lower interest rate, because of less risk of default.
51
To whom are executive branch officials accountable?
In what ways might organizational structure detract from accountability?
The citizens, public interest groups, legislative and judicial branches, creditors and the media.
52
```
How does each phases of management cycle contribute to accountability requirements?
P - Planing
P - Programming
B - Budgeting
O - Operations
A - Accounting
R - Reporting
A - Auditing
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Planning - Identify priorities
Programming - Link resources to goals.
Budgeting - Spend fund within limit.
Operations - Internal controls and performance measurement.
Accounting - Track resources and expenses.
Reporting - Demonstrate accountability and achievements.
Auditing - Assessment to identify problems.
53
What goal to be achieved thru an evaluation study?
To determine whether...
1) Policy goals of the program are appropriate.
2) Processes/ procedures of the program need to be modified.
3) Service efforts/ accomplishments result in cost-efficient outcomes (how it impacts future goal-setting).
54
What is the major purpose of GPRA?
Require strategic plans, goals and performance reports from executive agencies.
55
What are techniques government officials demonstrate accountability thru?
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Audited financial reports.
Performance reports.
Oversight hearings.
Answering questions from the media and citizens groups.
Standing for election.
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56
What is the best definition of government sustainability?
Ability to fulfill financial obligations as they come due and fulfill future service obligations under current policies.
57
What is debt-to-GDP ratio?
What is "other post-employment benefits" and give examples? (OBEB)
To calculate the sustainability of healthcare costs and aging population under current policies (not sustainable 73% in 2012, 78% in 2022 and 145% in 2042).
Pension plan, such as health and life insurance for retires.
58
What are keys to ethical behavior American Institute of Certified Public Accountant (AICPA) has adopted that correlates with AGA code of professional conduct?
Objectivity - Make fair decision, intellectually honest and free of conflict of interest.
Independence - Free of relationships that may impair one's ability to act objectivity.
Avoidance of conflict of Interest - Free from relating to official duties/ activities.
Due dare - Discharge professional responsibilities with competence, diligence, knowledge, skills and experience.
59
What is the fundamental ethics principle/ behavior government employees should subscribe?
Public service is a public trust. Govt employees should not abuse their public position to enrich themselves or others.
Ethical behavior is self-imposed.
60
What are code of professional conduct AICPA has adopted that correlates with the AGA code?
Responsibility - Professional and moral judgment.
Public interest - Act in way honor public trust.
Integrity - Perform with highest sense of integrity.
Objectivity and independence - Free of conflicts of interest.
Due care - Continue to improve competence and quality of service.
Scope and nature of work - Observe code of conduct before services to be provided.
61
What 4 steps to "cure" a conflict of interest?
Recusal - Written agreement to not to participate.
Waiver - When financial interest is not so substantial, must be granted by head of agency.
Qualified blind trust - Put in care of independent trustee.
Divestiture - Sale/ disposal of assets.
62
What is the main objective of 2002 E-Government Act?
What federal agency houses the Office of E-Gov?
Require federal agencies to use secure web-based technology to make govt service more transparency, user-friendly and accessible, and to make it easier for citizens to communicate with and participate in govt.
US Office of Management (OMB).
63
What are criteria federal agencies required to use to measure the performance of E-Gov initiatives?
The impact of E-Gov in helping agencies fulfill their goals.
Customer satisfaction and customer service.
Productivity in providing E-Gov services.
Incorporation of commercial best practices.
64
What is "real simple syndication" (RSS)?
Technology enables updates to web-based and alert user when updates are posted.
65
What is "personal identifiable information" (PII)?
Standards for electronic encryption published by National Institute of Standards and Technology.
66
***Levels of Government
Federalism
Sovereignty
Interrelationships among national, state and local levels
Federalism - Powers is distributed among different levels of govt and no level has complete authority over others.
Sovereignty - National cannot be sued by states/ citizens without its permission. Popular sovereignty give citizens the ultimate authority thru the ballot.
Interrelationships among national, state and local levels - All 3 levels national, state and local are distinct, yet coordinate their efforts. National govt may influence state and local govt thru grants but it cannot dictate their programs (10th Amendment/ Reserved clause).
67
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***Branches of Government
Legislative, executive and judicial
Constitution basis
Separation of powers
Illustration: line-item veto
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Legislative - Congress at the federal level, similar title at the state level (local level depends on form of government, such as council, board of aldermen, commissioners, and supervisors), responsible for enacting laws, such as Permanent legislation (codified- can be amended/repealed), and Temporary legislation (appropriation).
Executive - Head by the president, governor, mayor, manager or similar title, administers laws enacted by the Legislative body, appropriations set limits on the amount that can be spent and the purpose of the spending. They responsible for their programs, accountable to the Legislative branch and the people.
Judicial - For federal: Head by the US Supreme Court, decides on constitutionality and violation of laws. State courts cannot supersede US Supreme Court. Local courts adjudicate various matter, such traffic, divorce, small claims, and probate.
68
Interrelationships among the three branches?
Separation of powers:
| Legislative passes laws, Executive implements the laws, and Judicial settles disputes regarding the laws.
69
Checks and balances among the three branches?
Legislative - Appropriate funds, provides advice and consent to appointments by chief executive officer (including the courts), can impeach executive and judicial appointments and override vetoes.
Executive - Appoints justice and judges, can veto legislation enacted by Legislative (can exercise line item veto in many state and local governments).
Judicial - Can declare legislation unconstitutional.
70
Components of federal, state and local governments?
Legislative - Staffs and offices
Executive - Departments (Secretary, FBI), Independent agencies, Commissions, Central management agencies (GSA).
Judicial - Different levels, depending on jurisdiction.
71
Federal government's hierarchy and constraints?
US Constitution.
Legislation passed by Congress and singed by president.
Executive orders of the president (remain in effect unless changed by new president).
Regulations and rules proposed by departments to define how legislation will be implemented (law requires wide exposure before finalizing).
Policies and procedures of each department.
72
State government's hierarchy and constraints?
State constitution (cannot conflict with US Constitution).
Laws enacted by legislative body.
Executive orders of the governor.
Regulations proposed by departments to define how legislation will implemented (not all states have a formal process).
Policies of individual departments.
Some states allow direct action of citizens (initiatives, referendums, recalls).
73
Local government's hierarchy and constraints?
State constitution -> Local charter.
State law enacted by state legislative body.
Ordinances enacted by local legislative body.
Executive orders of CEO (not all local CEOs have this power).
Regulations enacted by departments (not all local govt need to formally adopt).
Policies and operating procedures of departments (some local govt allow direct action).
Initiatives, referendums and recalls.
74
Tribal government sovereignty?
Separate national govt within US.
Pay Federal income tax, but not state taxes.
Subject to federal grant regulation for federally-assisted programs.
75
Differentiation among general-purpose, special-purpose and quasi-government entities?
General purpose - Provide wide variety of services (federal, state, counties, cities, towns, villages, townships).
Special purpose - Provide single service (independent school, ambulance, park districts).
Quasi-govt entities - Operate similar to private entity, but subject to some govt controls (more appropriate internationally, Amtrak, TVA, NYNJ Port Authority).
76
Interrelationships among general-purpose, special-purpose and quasi-government entities?
Legislation - General purpose enacts legislation providing for creation of special purpose/quasi-govt entities.
Funding - General purpose may provide financial support for special purpose (school district).
Accountability - Special purpose required to have audited financial statements.
77
Role of joint-government organizations?
Jointly related - Appointment authority, but no financial accountability (local housing authority).
Joint venture - Ongoing financial interest, own shares, receive payments (DC metro).
Jointly governed - No financial interest or responsibility (NYNJ Port Authority).
78
The meaning, application and limitations of sovereign authority?
Possessed of supreme power and derived from the people in the form of constitutions and charters.
Constitutions and charters also limit the power of governments.
79
The power of governments to tax and borrow?
Constitutions and charters give govt the authority to tax and borrow.
The types of taxes are spelled out in constitutions, charters, statutes and ordinances (provisions limit the amt of taxation).
Congress periodically borrow on US credit by raising the debt ceiling.
Some state constitutions and local charters limit the ability of govt to borrow by requiring a vote or only allowing for capital projects.
80
The power of federal governments to establish monetary policy?
Only federal govt can create money (Article 1 of the Constitution).
The Federal Reserve System establishes monetary policy, such as buying/selling notes/bonds and changing banks' reserve requirements/interest rates.
81
The role and significance of the budget in government?
The budget/appropriations is a law, which specifies the amount to be spent, for how long/what purpose, and identifies how resources will be obtained to finance the spending.
82
The objectives of the budget?
A policy document that defines executive's priorities and enables legislature to allocate resources.
A guide to operations that sets forth the level of programs for the forthcoming period.
A communications device that tells public what to expect in the coming years.
A control mechanism that defines maximum monies that can be spent.
83
The objectives of the budget process?
Provide executive opportunity to set priorities and legislature opportunity to debate priorities and allocate resources (give and take).
Enables public to provide input on issues.
State and local budgets must be balanced.
84
The legal aspects of the government budget?
Appropriations are legal limits (activity must take place within the time period/limits of the appropriation and must be consistent with the purpose of the appropriation).
No appropriation, no spending.
85
The principles of legislative control over government finance?
The legislature holds the power of the purse.
Appropriates funds and mandates how funds are/not to spent.
Enacts laws requiring the payment of taxes and other revenues and reviews how programs are functioning.
86
How the executive branch controls spending?
The executive is responsible for program execution.
Establishes controls (apportionments and allotments of appropriations) ensure activity takes place within the requirements of the program and accounting systems (chart of account) to track spending against appropriations.
Monitors spending with budget comparison reports among agencies and make adjustments among programs if legislative grants this authority.
87
How judicial decisions affect government spending?
If a court finds a program/tax levy to be unconstitutional, spending/collection is prohibited.
A court can declare a contract to be invalid.
Some jurisdictions require courts to approve the transfers of money between funds.
88
The role of other budget control devices?
State and local govt make appropriations by fund, which is fiscal and accounting entities and cannot co-mingled.
The federal govt don't use funds to the same extent as state and local govt.
Encumbrances (state/local) and obligations (federal) set aside a portion of appropriation/apportionment/allotment to assure funds are available for government to pay when goods/services are received and/or performance is completed.
89
Special funds and dedicated revenues?
Created in permanent legislation to dedicate particular revenues for specified purposes, such as highway trust, social security, unemployment compensation (federal), and gasoline taxes, lottery profits, federal grants (state/local).
Earmarked Funds/Dedicated Collections.
90
Legislative earmarking?
Most commonly used by Congress and state legislatures (some local govt).
Individual legislators insert language in appropriation bills mandating that a portion be used for a particular purpose, a technique to allow them to bring funds back to their states or districts.
91
The elements of the government management system: Strategic planning?
Keystone for public management that requires specification of mission and strategic goals (high-level, 5 years or more).
To direct actions, regulations, grants, research, loans are strategies for achieving goals.
92
The elements of the government management system: Programming?
To identify most cost-effective means for accomplishing goals/objectives and required resources.
To define measurable performance goals and alternative programs (2 - 5 years).
To evaluate alternatives and budget constraints that may require changes.
93
The elements of the government management system: Budgeting?
Operating - Central control device to set forth amounts to be spent and resources to be raised during fiscal period.
Cash flow - To forecast funds available to pay bills and/or for investment.
Capital budgets - Used by state/local govt to control long-term/high cost projects.
94
The elements of the government management system: Operations?
All activities needed to achieve program objectives.
To establish policies/procedures to guide operations and to maintain performance measurement systems.
To provide financial systems, reporting, analyzing, interpreting data to assure internal controls support achievement of objectives.
95
The elements of the government management system: Accounting?
Recording of transactions and events.
Budgetary - To ensure spending does not exceed appropriations, apportionments or allotments.
Financial - To determine assets, liabilities and costs.
Managerial/Cost - To determine costs of a program, location, etc.
96
The elements of the government management system: Reporting?
General-purpose financial reports are prepared using GAAP to demonstrate accountability and assure reliability.
GASB establishes GAAP for state/local govt.
FASAB establishes GAAP for federal entities.
Internal Special-purpose reports used for managing operations.
External Special-purpose reports used for monitoring operations.
Popular reports.
Performance reports.
97
The elements of the government management system: Auditing?
Financial audits - To determine if financial statement presented fairly in accordance with GAAP and relied materiality upon to make decisions.
Attestation engagement - To check if the numbers are reliable.
Performance audits.
98
The interrelationships among the elements of the government management system?
Programming - To identify most cost-effective means for accomplishing the strategic plan.
Budget - To provide the fund with which the programming can be executed.
Operations - To ensure the programs's objectives are met and the budget is not overspent (use accounting systems as a vehicle for controls and for the financial reports to be reliable).
99
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*** Tax policies
Tax equity
Ability to pay
Benefit received
Collection efficiency
Socio-economic goals
Tax expenditures
Dedicated taxes
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Tax equity - Horizontal/ Vertical.
Ability to pay - Progressive/ Regressive.
Benefit received - Establish new taxes or raising existing ones?
Collection efficiency - Cost to collect should be minimal compare to revenue generated.
Socio-economic goals - Create exemptions.
Tax expenditures - Social benefit exceeds the lost revenue.
Dedicated taxes - Special purpose, earmarked or restricted taxes.
100
*** Income Taxes
Income tax characteristic
Relative advantages
Income tax characteristic - Broad-base taxes. Because exemptions and deductions are applied to horizontal and vertical equity, income taxes are usually progressive. Payroll taxes are not income taxes (for SS and Medicare programs), which could be progressive or regressive.
Relative advantages - Less cost to administer than other taxes, compliance tend to be high, respond to economic conditions, such as inflation/ recessions so tax impact varies.
101
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***Wealth Taxes
Real property
Personal property
Intangibles
Estate and inheritance
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Real property tax - Based on appraised value of property (A Mil = 1/1000 of a dollar) or income generated by the property for commercial.
Personal property tax - Items can be transferred from one location to another. Same items are exempt from taxes paid by individuals but not when owned by a business.
Intangibles tax - Stocks/ bonds/ saving accounts/ trademarks. These taxes are controversial for retired people who have no earned income.
Estate and inheritance taxes - Death taxes. States may levy both; Federal govt levies only the estate tax. The trend is to reduce/ eliminate.
102
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***Consumption Tax
Sales
Use
Excise
Value added
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Sales tax - Point of sale.
Use tax - Good purchased out-of-state and use within the state.
Excise tax - Narrow targeted, such as gasoline, occupations, certain licenses/ privileges and luxury items (sin taxes).
Value-added tax - Not in US, applied at each state of production process.
103
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***Intergovernmental Revenues
Contracts
Grand and shared revenues
Grantor expectations
Grantee expectations
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Contracts - Voluntary form of inter-govt financing/ providing back-up emergency services.
Grand and shared revenues - Project/ discretionary/ formula grants (formula can be further classified as categorical/ blocks grants. Shared revenues are provided with few constraint so states/ local entities have maximum flexible.
Grantor expectations - Accountability, measurable, effective, cross-cutting requirements.
Grantee expectations - Grand programs complement other programs, certainty, no micro-managing.
104
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***Other Forms of Revenue
License fees
User fees
Donations
Lotteries and gambling
Investment income
Public-private partnerships
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License fees - Used to regulate activity, such as fishing license.
User fees - Used to impose on a specific beneficiary of a good/ service, such as security charge to airline ticket after 9/11
Donations - Voluntary and confer to no benefits.
Lotteries and gambling - Govt to generate revenue. Profits often used to support education.
Investment income - Local Govt Investment Pool (LGIP) operate like mutual fund, but exclusively for govt entities.
Public-private partnerships - Govt enters into an agreement with private company to build and operate a facility, such as building public hospital.
105
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***Government Debts
Purposed of debt
Debt limitations
Underfunded liabilities
Other considerations
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Purposed of debt - Fund capital project, provide short-term financing, save on interest rates (refunding/ advanced refunding).
Debt limitations - State limit is established in the state constitution/ statutes.
Underfunded liabilities - Pension funds, SS and Medicare are all underfunded as govt struggle to catch up.
Other considerations - Financing alternatives, ability to repay debt, tax base and debt programs must provide sufficient funds for the projects.
106
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***Long-Term Financing Options
Bonds
Notes
Lease-purchases
Certificates of participation
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Bond - General obligation bonds (full-faith and credit) is repaid thru a) Term bond (large block of bonds maturing in a single year), b) Serial bond (maturities every year over a period of years). Warrant (check executive official directs treasury to pay to the bearer). Revenue bonds (using revenue from the project that was funded)
Notes - Short/ long-term debt instruments.
Lease-purchase - Acquire long-term assets thru capital leases (asset transfers to govt at end of period), require voter approval.
Certificates of participation - Financial institutions and other investors who purchase the right to participate in the income stream from lease payments. Tax exempt.
107
***Credit-Rating Agencies
Rating factors
Rating codes
Rating factors - Purpose of debt, source of fund for repaying, legal limitation of funds, population/ employment trends, real estate value, how the entity is organized.
Rating codes - Standard and Poor's (SB), Moody's Investor Service, and Fitch Ratings. Highest rating possible, such as AAA, AA, A, BBB.
108
The meaning and purpose of accountability in the government environment?
The preamble to the US Constitution "We the people..."
People have a right to know, receive the facts, debate and evaluate, choose at elections.
Evolving to reflect size and responsibilities of govt and communication channels.
109
The key attributes of accountability; their roles and interrelationships?
Organizational accountability - Org chart. Commensurate authorities and responsibilities. Establishment of internal controls. Safeguarding assets. Accuracy of transactions.
Disclosure - Open govt. Transparency.
Reporting - Following appropriate procedures.
110
Elements for which a government should be accountable?
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Compliance with laws, rules and regulations.
Operating effectively and efficiently.
Program performance and results.
Assuring reliable information.
Safeguarding assets.
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111
The primary stakeholders in accountability?
Legislative and oversight group.
Executive help accountable for implementing legislation.
Taxpayers. Constituents. Investors and creditors. Employees. Other govt. Future generations.
112
The group that help establish and maintain accountability?
Legislative and oversight group - Requiring reports on results.
Management - Establishing policies and procedures and monitoring performance.
Taxpayers. Media. Employees.
113
The methods used to demonstrated and assess accountability and transparency?
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Financial reports and audits.
Program evaluations and performance audits.
Other type reviews and inspections.
Performance plans and reports.
Legislative briefings and oversight hearings.
Press release and media reports.
Websites and town hall meetings.
Credit rating agencies.
Elections and recalls.
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114
The techniques used to assess fiscal sustainability and solvency?
Solvency - Ratio analysis (assets/liabilities). Comparisons with other entities and benchmarks.
Fiscal sustainability - Projections of revenues and spending (revenue/expenditures, fund balance/revenues). Analytical methods. Use of experts.
115
The key concepts related to ethical responsibilities to the public, professional conduct and the sources of guidance?
Complex system of discipline - Civilized society imposes on itself. Thru laws, customs, standards, social etiquette, other rules. To govern moral conduct. Voluntary self-discipline.
Government employees should not abuse their positions to enrich themselves, their families, or any org in which they have financial interest.
Based on laws - Various codes. Personal morals.
Basis considerations - Be objective. Maintain independence. Avoid conflicts of interest. Exercise due care.
116
The steps a government financial manager needs to take to avoid a conflict of interest and ensure objectivity and independence?
Objectivity - Make decisions based on merit. Do not allow bias or prejudice to influence decisions. Provide full and accurate information to superiors or members of the public.
Independence - Free of relationships that may impair the ability to act and obligations to interested parties. Avoid accepting favors or gifts.
Conflicts of interest arise when one has a personal interest in matters relating to official duties or activities - Past positions and relationships with former employers. Associates who could benefit from your actions. Family members who hold key positions in other organizations you work with in an official capacity. Offers of future employment.
117
The concept of due care in the performance of professional duties?
Discharge professional duties with competence and diligence.
Obtain the skills needed for your position.
Maintain skills and CPE requirements.
Exercise appropriate supervision over subordinates.
118
Activities or situations which are inconsistent with the responsibilities of public officials and employees?
Accepting gifts from vendor or customer.
Having direct supervision of a relative.
Letting personal bias affect a decision.
Putting undue pressure on an employee to influence a decision.
Accepting an assignment for which you do not have the appropriate skills and abilities.
Working on behalf of an individual running for office during working hours.
119
The appropriate course of action to avoid the reality or perception of improper use of one's office for personal gain?
Avoid real and potential perceived conflicts of interest.
Disclosure - Notify higher management of the situation.
Recusal - Do not participate in the decision-making process.
If immaterial, obtain a waiver from higher management.
If assets are involved, place them in a qualified blind trust.
Divest of stocks or dispose of other assets.
120
Delivery of government services and e-government?
E-Govt Act of 2002 - Requires federal agencies to use internet-based technology to enhance citizen access to information and services.
USAspending.gov provides information on federal contracts.
DATA Act will expand federal data online.
States allow individuals to renew car registrations online.
Local govt use websites to broadcast council meetings.
121
Stakeholder real-time access information, including electronic financial reporting?
Many govt provide online - Current and historical budgets. Comprehensive financial statements and reports. Tax levies and similar information.
All 50 states provide checkbook accounting online and Non-financial data, such as Wait time for airport security lines. Performance of individual schools. Cleanliness of local beaches.
122
The use of social media and mobile devices for communications and providing services?
Most organizations use an array of social media to communicate with constituents - Facebook. Twitter. YouTube.
Law enforcement agencies use social media to help solve and prevent crimes.
123
Security and privacy controls?
Privacy concerns - Social media are subject to same regulations as other forms of communication. Prohibitions about disclosing personal information and access to records.
Security concerns - Need for secure passwords.
Security breaches - Need for prompt notifications.
