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Exam 1 Flashcards

1
Q

What is the reserve clause?

A

10th amendment (The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.)

Federal Government only has those powers delegated in the Constitution. If it isn’t listed, it belongs to the states or to the people.

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2
Q

What is the state legislation sometimes called?

A

General assembly

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3
Q

What are the three types of municipal governments?

A
  1. mayor-council
  2. council-manager
  3. commission
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4
Q

How is a mayor-council municipality structured?

A

Has two branches: executive (the mayor) and legislative (council)
* Strong mayor: mayor appoints key subordinates
* Weak mayor: key positions appointed by others or elected

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5
Q

How are council-manager municipalities structured?

A

Council members embody the legislative branch but manager serves at discretion of council not voters

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6
Q

How are commission municipalities structured?

A

The executive and legislative branches are combined into commissions.

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7
Q

How many laws did the Supreme Courts find unconstitutional from 1803-2012?

A

172 laws

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8
Q

What does the Legislative Services Agency do?

A

staff offices that provide research and policy analysis to state legislature.

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9
Q

How many supreme court district courts are there? Regional courts?

A

94 federal district courts organized into 12 regional circuits. Each circuit has a Court of Appeals

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10
Q

What is the Hierarchy of Government Authorities?

A

1.Constitution
2. Temporary (expire at fiscal end) or permanent (US Code or state code/statues) Laws, Statutes.
3. Executive orders: issued by chief executives within parameters set by constitution and laws
4. Statutory rules and regulations to implement laws, such as those codified in the Code of Federal Regulations (CFR)
5. Agency policies and procedures

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11
Q

What are the types of government entities?

A
  1. General Purpose Entities
  2. Special Purpose Governments
  3. Jointly Governed Organizations
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12
Q

What are the 5 different types of local government?

A
  1. County
  2. Municipality
  3. Township
  4. School district
  5. Special district
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13
Q

What is fragmentation and how can it be avoided?

A

Occurs when the purpose of special-purpose government was created overlaps with general purpose or other special purpose

Avoid by creating service agreements (ex: found in public safety, libraries)
Ex: two adjacent general purpose govs creates special purpose that provides services to both general purposes

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14
Q

What laws recognize tribal territories?

A
  • Constitution (Commerce Clause, Article I, Section 8)
  • treaties
  • Supreme Court
  • executive actions
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15
Q

What are the tax laws for tribal territories?

A
  • Council is not subject to federal income tax but members and businesses are, exemptions apply
  • Businesses must follow laws/regs but not subject to state income tax or local property taxes
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16
Q

What are the characteristics of a General Purpose—County?
- how are they formed?
- How many citizens are not served by one?
- What is it structure?

A
  • Formed under provisions in state constitutions or statutes
  • Some major cities are separate from their adjacent county
  • 10%+ US citizens are not served by a county government
  • Structure: elected board of supervisors
  • Elected by geographical district, “at large,” or combo
  • Board of supervisors appoint county admin and other officials
  • Larger counties have elected county executive similar to mayor
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17
Q

What are some characteristics of a General Purpose—Municipality?
- why are they formed?
- when are new ones formed?
- how are they governed?

A
  • Cities, towns, boroughs, villages
  • General purpose local government that’s not a county or township
  • Formed to serve a concentration of people in a given geographical area
  • New municipalities are formed when population grows
  • Municipalities can be subdivided into new municipalities
  • Size, definition, and governance varies from state to state
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18
Q

What are some characteristics of General Purpose—Townships?
- what services do they provide?
- How many states have active Township government?
- what is the amount of overlap of townships and municipalities?
- What is the structure?

A
  • Have both geographical and historical roots
    • Each 6 mile block is a township
    • Provides services such as cemeteries, child welfare, trash removal — one township can do trash and another forbid it
    • 20 states have active township governments
    • Amount of overlap of townships and municipalities varies by state. Some have no overlap
    • Structure: elected board of supervisors (or trustees)
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19
Q

What are some characteristics of a Special Purpose—School District?
- Why are they formed?
- what is special about their laws?
- how many higher education are operated by local school district?
- What is their structure?

A
  • Primarily formed to provide elementary, secondary, and/or higher education
  • Independent schools have administrative and fiscal autonomy under laws. Can raise taxes and issue debt
  • Dependent districts are administered by other governments
  • 600+ higher education that are operated by local school districts
  • Most are governed by elected school board
  • Typically appoints superintendent
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20
Q

What are some characteristics of a Special Purpose—Special District (Non-School)?
- why are they formed?
- What services did they typically provide?
- How are they structured?

A
  • Distinct entities with admin and fiscal autonomy
  • Referred to as districts or authorities (port authority)
  • Some agencies with district or authority title are admin units or general purpose governments. Parent general purpose government that created special district may grant them authority to tax/issue debt
  • Most perform single function or limited functions
  • Can focus on single issue (90% single) not many competing
  • 1/3rd have missions related to natural resources or fire protection
  • Administered by elected officials, appointed officials, or combo
    • Examples: water districts, conservation districts, healthcare districts, airport/port authorities
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21
Q

Why are Special Purpose—Special District (Non-School) formed?

What is an advantage of forming them?

A
  • Demand for new, specialized services not offered by parent gov
  • Can circumvent debt and tax limits where a general purpose can’t
  • Managerial flexibility. Not subject to sane rules as general
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22
Q

What is quantitative easing?

A

Fed reserve creates bank resfves then used money to buy treasury securities to stimulate economy

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23
Q

What are some ways the federal reserve can control the supply and cost of money

A
  • Buying/selling government bonds
  • Altering the amount of reserves that other banks must keep on deposit with the federal reserve
  • Changing the interest rate used to loan funds to other institutions
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24
Q

What is the difference between the federal and state governments when it comes to debt/borrowing?

A
  • Constitution limits amount of debt federal government can occur. No federal limits for borrowing for capital investments
  • Constitutions and statutes limit capital investments at state level. Don’t allow for deficit spending for operations
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25
Q

What is a deficit? What can it lead to?

A

government expenditures for specific fiscal period exceeds revenues. Can lead to more borrowing/debt

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26
Q

What are some ways a legislature can provide oversight?

A
  • Prescribe organization structure and staffing procedures as part of budget bill
  • Require various budget execution and spending reporting
  • Conduct reviews and hold hearings to evaluate the programs or when issues arise.
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27
Q

How is the budget for private sector different?

A

Private sector budgets have:
- fewer controls on spending and greater flexibility;
- capable of revision, no legal consequences of changes it;
- no consequence of fines or imprisonment or budget purpose, time, amount violated

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28
Q

What is strategic planning?

A
  • Recent trend
  • Plans clarify policies and objectives and reduce deliberations during formal budget process
  • Must be interlinked with budget process
  • Linking budget to performance goals and measurement new trend
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29
Q

What are special funds and earmarks designed to do?

A

To direct public funds to specific purposes

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30
Q

What is a special fund?

A

Fund has been established to account for the collection of revenues that can be spent for only specified purposes and the actual spending of those revenues

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31
Q

What are some types of state/local special funds?

A

S. special revenue funds
P. permanent funds,
I. interval service funds
C. capital project funds,
E. enterprise funds, and
D. debt service funds,

SPICED

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32
Q

Types of federal special purpose funds

A
  • special funds
  • revolving funds
  • trust funds

SRT

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33
Q

How does GAO define a special fund?!

A

those earmarked by law for specific purpose

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34
Q

What are earmarks?

A

one-time spending provision specified in an appropriations statute

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35
Q

What are issues with earmarks?

A
  • not subjected to management analysis to justify the spending
  • Bypass normal legislative debate and competition for scarce resources
  • Reduce transparency and accountability in government
  • Often a result of a successful lobbying by private companies, NFP, and local government (fuels lobbying industry)l
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36
Q

What does FASAB statement on Identifying and Reporting Earmarked Funds do?

A
  • In 2004, Federal Accounting Standards Advisory Board (FASAB) created a statement titled Identifying and Reporting Earmarked Funds
  • Established the accounting and reporting standards for specially identified revenues and other financing resources and dedicated use of those resources
  • One-time spending provisions was left out if it’s definition of earmarks
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37
Q

What are the objectives of budgeting?

A
  • setting government priorities;
  • new objectives once budget in place
  • Document policy;
  • guide operations;
  • plan finances; and
  • promote communications
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38
Q

What does the 1993 Government Performance and Results Act (GPRA) require?

A
  • requires federal agencies to create long term strategic plans, performance plans with measurable goals, and follow-up reports
  • Strategic plans supported by annual performance plans (performance budgets), measures, performance reports.
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39
Q

What is an appropriation?

A
  • Budget bill that actually makes funds available
  • Legal authority to incur expenses and spend money
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40
Q

What is an apportionment?

A
  • bill that approves programs
  • Prescribes what an agency will do if funding is available
  • Authorizations often enacted separate from appropriations

dispersal of budgetary authority to an agency or program by central management agency (OMB) to support approved funding

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41
Q

What is an unfunded requirement?

A

when congress authorizes a program but not appropriate funds to support it

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42
Q

What do accounting structures do and what are they based on?

A
  • Limit and classify government spending
  • May be based on Program or object class or both
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43
Q

What is the program accounting structure?

A
  • purpose of spending
  • Dictating funds must be spent for specific purposes such as juvenile corrections or community health
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44
Q

What is the object class accounting structure?

A
  • specific goods or services (ex: salaries, equipment, supplies) that may be required
  • Sometimes referred to as a line item
  • Dictating funds may only be spent on specific types of goods or services, such as tools, supplies or temporary workers
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45
Q

What is a drawback for using object class accounting structure?

A

Managers can’t use funds to cover short falls elsewhere. Reprogramming request needs to be made.

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46
Q

What are special funds?

A
  • separate budget resources from general fund which provides more visibility and control
  • Revenue or resources is dedicated for specific activities/defined purpose
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47
Q

What is a general fund?

A

Money can be used for any authorized purpose

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48
Q

What do you spend plans, appropriations, and apportionments do?

A
  • Together help proper purpose and at the rate of spending corresponds with fiscal year
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49
Q

What is an allotment?

A

budgetary authority to specific components of the agency after apportionment is received

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50
Q

How often are apportionment and allotments distributed?

A

Quarterly

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51
Q

What is the anti-deficiency act?

A

officials can be fined and jailed if government funds obligated beyond legal authorized purpose, time or amount

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52
Q

What are some ways that government accountability is exercised?

A
  • Elections
  • Referendums
  • Recalls
  • Oversight hearings
  • Financial and performance reports
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53
Q

How is accountability different at large governments vs small governments?

A
  • Small government: accountability achieved through direct contact with citizens and officials
  • Large government: need formal accountability controls
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54
Q

What are some ways to promote accountability?

A
  • Org structure delineates responsibility and authority for resources, actions, results
  • clearly defined duties, proper training and supervision, and separation of duties
  • Internal controls help accountability
  • periodic reviews
  • Balance budget laws
    * Restrictions on debt and taxation
    * Professional qualifications of management
    * Strategic planning
    * Cost accounting
    * Citizens feedback
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55
Q

What does the FASAB Federal Financial Accounting Concepts 1 say about accountability?

A
  • Budgetary accountability— funds are raised, and spent according to law
  • Operational performance— funds have been spent efficiently and programs are effective
  • Stewardship— government activities, promote the long-term health of the community and economic condition
  • Systems and controls— ensure assets are secured and used for their intended purposes

BOSS

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56
Q

What are the five levels of government accountability according to GASB Concept Statement 2: Service Efforts and Accomplishment Reporting?

A
  1. policy accountability— selection of policies, pursued, and rejected
  2. program accountability— establishment of achievement of goals (outcomes, and effectiveness)
  3. performance accountability— efficient operations (efficiency in economy)
  4. process accountability— using adequate processes, procedures, and measures in performing the actions called for (planning, allocating, and managing)
  5. Probity and legal accountability— spending funds in accordance with the approved budget for being in compliance with laws and regulations(compliance)

All Ps

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57
Q

Who are the stakeholders in government accountability?

A
  1. Citizens and their surrogates
  2. Other gov branches and components
  3. Other government levels
  4. Investors and creditors
  5. Future generations
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58
Q

What are some ways that the government is assessed?

A
  1. oversight hearing
  2. evaluations and investigations
  3. reports
  4. audits
  5. the Free Press
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59
Q

What is Service Efforts and Accountability (SEA) reporting?

A
  • an effective method to demonstrate government accountability
  • Issued by a few state and local governments and agencies, although a far greater number use performance information to support the budget
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60
Q

What does the 2011 Government Performance and Results Act Modernization Act (GPRAMA) do/require?

A
  • requires government to establish cross-agency priority goals
  • requires agencies to establish a limited number of federal cross-agency goals and agency priority goals, and then conduct quarterly data-driven reviews to determine progress toward achieving those goals, and how to advance progress
  • Required CFO and Performance Improvement Officer appointment
  • Required admin to establish a Performance Improvement Council to drive the process
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61
Q

What do follow up audit programs do?

A
  • detailed action to correct the deficiency
  • Tests to ensure the correction is effective
  • Reports on the results of corrective efforts
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62
Q

What does the Government Finance Officers Association (GFOA) say about solvency and sustainability?

A
  • each government must to find sustainability for itself
  • Recommends that a starting definition is the government’s ability to “manage its finances is so it can meet its spending commitment, both now, and in the future”
  • Notes that sustainability encompasses, social, and environmental concerns, as well as projected economic capacity of the government
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63
Q

What does FASB’s Statement of Federal Financial Accounting Standards 36, “Reporting Comprehensive Long-Term Fiscal Projections for the US Government” state about sustainability?

A
  • Sustainability is summarized as the federal government ability to “sustain public services and to meet obligations as they become due” assuming that current policies continue
  • The standard has multiple provisions to help citizens and professional analysts assess the government sustainability
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64
Q

What are some ways to assess future solvency in a sustainability of government programs?

A
  1. Ratios
  2. Benchmarking
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65
Q

What was GASB pronouncement Statement 68, is designed to do?

A

to improve accounting and reporting for defined benefit pension plans

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66
Q

What are some basic ethical principles?

A
  • Objectivity
  • Due care
  • Avoidance of conflict of interest
  • Independence is defined as freedom from undue influence in it also a basic, ethical principle
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67
Q

What are some benefits to electronic delivery?

A
  • New opportunities for citizen, participation in government
  • Real time online access to information in collaboration between government agencies
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68
Q

When was the Public Law, 107–347 a.k.a. “The E-Government Act” enacted?

A

2002

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69
Q

What did the Public Law, 107–347 a.k.a. “The E-Government Act” require?

A
  • Requires federal agencies to use Internet based IT to enhance citizen, access to Government, information and services
  • Also requires numerous safeguards to personal privacy
  • To facilitate citizen, participation in government, and to make citizen, centric information readily available
  • To support the school, the law establishes the Office of Electronic Government (OGE) within the OMB
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70
Q

Who leads the Office of E-Government and Information Technology (E-Gov)?

A

by the federal government CIO

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71
Q

What are the E-Gov responsibilities?

A
  • Assist all federal agencies in developing system architecture to support electronic government
  • Insert enter connectivity and enter operational ability across the government websites
  • Sponsored activities to engage the general public in developing program and information portals that serve the needs of the public
  • Develop cost effective security measures for web-based information
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72
Q

What does the e-government fund do?

A
  • Helps agencies experiment with ways to make information and services more readily available to citizens, businesses, government, grantees, and contractors, and state and local governments
  • It should be easier for the public to apply for benefits, receive services, pursue business, or contracting opportunities, and conduct other transactions with the government
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73
Q

What is the performance criteria for e-government?

A
  • The impact of E government in helping agencies fulfill strategic goals
  • Customer satisfaction and customer service
  • Productivity and providing a government services
  • Incorporation of commercial best practices
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74
Q

What is USSpending.gov and what info does it provide?

A
  • Publicly accessible website
  • Gives the American public access to information on how their tax dollars are spent
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75
Q

What did the Federal Funding Accountability and Transparency Act of 2006 (FFATA) do?

A

Mandated USSpending.gov

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76
Q

When was the The Digital Accountability and Transparency Act (DATA ACT) enacted and what did it do?

A
  • enacted in May 2014
  • expand FFATA, by promoting the disclosure of direct federal agency, expenditures and linking federal contract, loan, and grant spending information to programs of federal agencies
  • Government wide data standards for financial data
  • Intended to foster consistent and reliable, as well as searchable government wide spending data that is displayed accurately for taxpayers and policy makers on the USA spending.gov
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77
Q

What information is required to be on US Supreme Court, federal district, courts, and bankruptcy courts websites?

A
  • Location and contact information for the courthouse including l names and telephone numbers
  • Court rules in general orders of the court
  • Docket information for each case
  • The substance of all written opinions issued by the court
  • Access to nonrestricted, ( publicly available) documents, filed with the court
78
Q

What is E reporting?

A

access to Government financial, nonfinancial, and performance data through a website

79
Q

What did the Connected Government Act amend? What did it require?

A
  • Amended title 44 of UCS by adding the new section 44UCS3559
  • Federal websites are required to be mobile friendly
  • Must be configured in a way that the website maybe navigated/view/accessed on a smart phone tablet, computer, or similar mobile device
  • E government initiatives, enable real time access to other types of information by using listserv or RSS feed a.k.a. really simple syndication
80
Q

What does National Institute of Standards and Technology (NIST) require?

A
  • publish encryption standards for all federal agencies
  • IT systems and the data they contain are assigned to different “security categories” based on risk
  • Promulgates standards for data privacy
  • Risk and associated security levels depend on the interaction of confidentiality, integrity, and availability
81
Q

A security breach is low under what circumstances?

A

Loss of confidentiality, integrity, availability has Limited adverse affect on organizational operations, organizational assets, or individuals

82
Q

A security breach is high under what circumstances?

A

Loss of confidentiality, integrity, availability has a severe and catastrophic affect on organizational operations, organizational assets, or individuals

83
Q

What did the Whistleblower Protection Enhancement Act of 2012 do?

A

Provide clarification and further protections to federal employees who report government, fraud, legality, waste, and corruption

84
Q

What did the Whistleblower Protection Act of 2017 do?

A

Possesses gaps in the prior protection, enhances accountability for whistle blower retaliation and increase awareness of whistleblower protection to federal employees

85
Q

What are the 4 principles of the AGA Code of Ethics?

A
  • Principal 1:AGA, Members, and CGFM’s shall serve and support the public interest
  • Principal 2: AGA, Members, and CGFM shall maintain the highest standard of professionalism and integrity
  • Principal 3: AGA, Members, and CGFM shall remain objective in carrying out their duties and responsibilities
  • Principal 4: AGA, Members, and CGFM’s, so carefully maintain and protect, confidential information
86
Q

What are some of the American Association of Certified Government Accountants (AICPA) code of ethics?

A
  • Responsibilities—members should exercise sensitive professional and moral judgments in all their activities
  • Public Interest— accept the obligation to act in a way that will serve public interest, honor the public trust, and demonstrate commitment to professionalism
  • Integrity— perform all professional responsibilities with a higher sense of integrity
  • Objectivity and Independence— maintain objective and free from conflict of interest when discharging professional responsibilities
  • Due Care— observe the professions technical and ethical standards, strive continually to improve competence and quality of services
  • Scope and Nature of Work— observe the Principles of the Code of Professional Conduct in determining the scope and nature of services to be provided
87
Q

What is the US Code of Government Ethics (5 CFR Part 2635)? When was it enacted and what does it cover?

A
  • Single, comprehensive and clear set of standards applicable to all executive employees
  • Effective February 3, 1993
  • Addressed following issues:
    * Gifts from outside
    * Gifts between employees
    * Conflicting financial interests
    * Impartiality in performance of duties
    * Seeking other employment
    * Misuse of position
    * Outside activities
88
Q

When was the constitution written? Ratified?

A

Written 1787
Ratified 1791

89
Q

How many times has the constitution been amended?

A

27 times

90
Q

How many articles are in the constitution and what are they?

A
  1. Legislative.
  2. Presidency.
  3. Judiciary.
  4. The states.
  5. Amendment process.
  6. Legal status of constitution
  7. Ratification.
91
Q

What is the local equivalent of a constitution?

A

Charter

92
Q

What are some aspects of the Planning Phase?

A
  • Establishes/defines long term goals and priorities
  • addresses the “what” and “how” of agency operations
  • Should occur throughout the year
  • Creative, judgment and responsive to stakeholder
  • Don’t think about what will cost, just what you want to do
93
Q

What are the 13 strategic planning steps recommended by the Government Finance Officers Association (GFOA)?

A
  1. Initiate the Strategic Planning Process
  2. Prépare a Mission Statement
  3. Assess Environmental Factors
  4. Identify Critical Issues
  5. Agree on a Small Number of Broad Goals
  6. Develop Strategies to Achieve Broad goals
  7. Create an Action Plan
  8. Develop Measurable Objectives
  9. Incorporate Performance Measures
  10. Obtain Approval of the Plan
  11. Implement the Plan
  12. Monitor Progress
      1. Reassesses the Strategic Plan
94
Q

How is a mission defined?

A
  • ideal statement of what organization hopes to achieve
    • What an organization is, why it exists, and it’s reason for being
  • Examples:
    • Mission: Promote safe and efficient travel on city’s roadways
    • Goal: Keep city streets free from winter ice hazards
    • Objective: Plow and apply saline on all four lane highways within 8 hours
95
Q

How is a goal defined?

A
  • broad statement of purpose for program
  • Derived from mission and is more specific than mission statement but less specific than objective
96
Q

How is an objective defined?

A
  • measurable accomplishments to be achieved within a specific period
    • Should contain projected, measurable achievement standards
97
Q

What are some outcomes of the programming phase?

A
  • Specific, measurable objectives, incl timeframes
  • ID most cost effective means to achieve objectives
  • Resources (personnel, funding, equipment, and other resources) needed to achieve objectives
  • Funds needed to obtain resources for budget year — to be requested during budgeting phase
  • Decisions on how resources will be distributed among various offices and programs to achieve objectives
98
Q

What are some aspects of programming?

A
  • Shorter period
  • Links strategies/goals to resources
  • more specific objectives/How many objectives will be needed to achieve long term goals
  • Resources constrained
  • determine most cost-effective means for accomplishing goals and objectives
  • Resource requirements are identified and resources are assigned to specific offices and programs
  • Keep realistic view of what resources needed and how to achieve those objectives
  • Benchmark to other organizations
    • Incremental improvements
    • Avoid duplication and waste of resources
  • Cost analysis — “Make it buy” decision made
99
Q

What are the names of the different types of budgets?

A

Operating Budget
Cash-Flow Budget
Capital Budget

100
Q

What are some good things about budgets?

A
  • Are Laws/ordinances that reflect priorities and objectives of government and citizens
  • Control how much federal agencies have to spend
  • Prioritizes objectives in budget derived from planning
  • Describes mission, functions, staffing
  • Good budget not limited to dollars and cents
  • Contains info on government priorities, how gov organized and how it operates.
101
Q

When are cash flow budgets used?

A
  • forecast timing of cash receipts and expenditures so funds will be when payment due
  • Derived through operating budget but forecasts timing and cash flows for year
  • Ex: sales tax receipts will flow into Government only near start or end of fiscal year
102
Q

What is the operating budget used for? What is its time period? And what’s the difference between length between federal and state/local?

A
  • current budget it’s appropriated to cover current operating.
  • Day to day activities/expenditures for salaries, supplies, utilities, noncapital items
  • Anticipates total revenues such as sales tax receipts, property tax, and intergovernmental transfers
  • Covers limited period (1-2 years)
  • Fed uses annual budgets whereas state/local uses biennial
  • Mid-terms adjustment needed if revenues fall short of expectations or if cost of goods/services are higher than planned
103
Q

When are are capital project budgets used?

What is the government finance officers association recommendations on threshold for capital assets?

What are refurbishment considered as?

And when can capital budget and operating budget be combined?

A
  • Cover big ticket items that support government operations for several years and may be acquired over several years
  • Government Finance Officers Association’s recommendations threshold: 2 years useful life and cost of at least $5k for single item
  • Whether refurbishments are operating or capital depends on cost, extent of work, number of years benefit from refurbishment
  • Operating and capital budgets can be combined to single budget
    * Often separated to pass easier
    * Some laws/ordinances requires them to be passed separately
104
Q

What are some ways to structure a budget?

A

organizational unit,
project,
program,
line item,
object,
object class

105
Q

What is an object and what are some examples?

A
  • what money is spent on rather than intended outcome of expenditure (transportation, safety, healthcare)
    * Ex: drivers training program objects:
    * Salaries for educators
    * Equipment
    * Capital equipment (cars)
    * Supplies (training material)
    * Liability insurance
    * Can be further defined in sub-objects
106
Q

What are some forecasting method?

A

Expert: government officials ask experts in economics

Delphi technique: process for gathering, and refining input from multiple sometimes anonymous experts

Extrapolation: assumes certain trends will continue such as the aging population

Leading indicators: current events, provide insight to future conditions. Example a change in goods might affect future revenue

Technology assessments: impact of new technology

107
Q

What are general purpose external financial reports? (GPEFR)? What statements are included?

A
  • prime vehicle for government accountability
  • Include statement of net assets and statement of activities
108
Q

What are Performance Accountability Report (PAR)?

A

Optional reports financial data and performance (performance reports are required for federal agencies, but PAR is optional because they are alternate reports that could be submitted)

109
Q

What reports can agencies submit if they have trouble submitting a PAR within 45 days after the fiscal year?

A
  • Agencies have trouble submitting performance info with financial reports (45 days after fiscal year end) so do separate Agency Financial Reports (AFR) and Annual Performance Reports (APR)
  • Agencies that prepare AFRs and APRs over PARs can also submit a Summary of Performance and Financial Information (SPFI)
110
Q

What are state/local performance report called?

A

reports on Service Efforts and Accomplishments (SEA)

111
Q

What did the Data Transparency and Accountability Act (2014) do?

A

established government wide financial data standards as a means of increasing availability, transparency a usefulness of federal spending info
* Improved reporting
* Makes federal data for contracts, grants,federal assistance, loans more accessible, searchable, and reliable

112
Q

What part of the financial report provides basic structure of government and budgetary process?

A

MD&A
- It’s required by GAAP

113
Q

Who create standards for financial statements of non-publicly traded companies and NFP’s? What are the standards called that they create?

A

American Institute of Certified Public Accountants (AICPA)

generally accepted auditing standards (GAAS)

114
Q

Who establishes standards for a publicly traded companies?

A

Public Company Accounting Oversight Board (PCAOB)

115
Q

What did the Chief Executive Act of 1990 do?

A
  • created deputy director for management position and specified duties and reporting requirements
  • gave 0MB more responsibility over financial management
  • created the CFO position in required over 24 agencies to have a CFO
116
Q

What is Service Efforts and Accountability (SEA) reporting?

A

an effective method to demonstrate government accountability

117
Q

What are some legal constraints to government sovereignty?

A
  • derived from constitutions, statutes, and ordinances
  • tax policies (who, how much)
  • debt policies (purpose, term, amount, process)
  • appropriations ( budget authority to incur obligations/encumbrances) or CR in its absense
  • supplemental appropriations (fed) or budget amendment (state/local)
118
Q

What’s the difference between debt versus deficit of the?

A

Debt is accumulated amount
Deficit is how much is accumulated in the fiscal year

119
Q

What are sources of uses funds?

A
  • Taxes
  • Borrowing
  • Fees
  • Grants
  • Shared revenues
  • Donations
  • Investments
120
Q

What is tax equity?

A

Taxpayers should be treated fairly

121
Q

What is horizontal equity for taxes?

A

If you earn the same income, you should pay the same tax.

122
Q

What is vertical equity?

A

If you make more money, you pay more taxes. But both taxed at the same rate.

123
Q

What is ability to pay tax policy?

What type of tax is it?

A
  • Progressive tax
  • if you have a greater income, you have a higher tax rate
  • Used at the federal level
  • Income tax
124
Q

What is a regressive tax?

What type of tax is it? What is an example of one?

A
  • Type of horizontal tax
  • It has a disproportional impact on lower incomes (food, clothing)
  • Sales tax 
125
Q

What helps mitigate regressive tax?

A

Tax holiday around school year, etc.

126
Q

What is a benefit received tax policy?

What are some examples?

A
  • Individuals who benefit from the service should pay the tax
  • example: rental car taxes, beer tax
    OR
  • groups who receive common services should pay the tax
  • Example: citizens on a certain street get their water lines fixed
127
Q

What is a professional privilege tax?

A
  • A type of benefit received tax
  • example: CPA or lawyer pays to be able to practice in that state
128
Q

What is a tax expenditures? What are some types?

A

Anything that reduces somebody’s amount of tax due
It represents a loss of revenue to the jurisdiction
- Tax breaks
- Exceptions
- Exemptions to encourage individuals or businesses to engage in certain types of conduct

129
Q

What are some tax policies?

A
  • Tax equity
  • ability to pay
  • Benefit received
  • Collection efficiency
  • Socio economical goals
  • Tax expenditures
  • Dedicated tax
130
Q

What are some dedicated taxes?

A
  • specified tax for specific purpose (1 cent pop tax pay to support medical center)
  • restricted tax (Social Security taxes, go into a special fund, and only pay Social Security)
  • earmarked taxes (1% tax on hotels to build a museum)

SRE

131
Q

What are some characteristics of income taxes?

A
  • applicable to individuals and businesses
  • Broad based, and usually progressive
  • State/local governments usually piggyback off of them
  • Text expenditures to influence behavior/Socio economic goals
132
Q

What are some advantages of income taxes?

A
  • cheap to administer (collection efficiency)
  • high compliance rate (forced by withholding)
  • responsive to economic conditions, such as unemployment, inflation, recession
133
Q

What are some examples of wealth tax?

A
  • Real property
  • Personal property
  • Intangibles
  • Estate and inheritance
134
Q

What is the tax levy rate for real property taxes?

A

Number of Mills (.001)
- One mill is 1/10 of a cent

135
Q

What is the tax levy for real property tax?

A

The assessed value of the real property x tax levy rate

136
Q

What is the assessed value of real property?

A

A percentage of value of property (tax base) and can vary by type of property

137
Q

What are some consumption taxes?

A
  • sales
  • Use
  • Excise
  • Value added
138
Q

What is a use tax? And when is applied?

A
  • taxes on out-of-state purchases used in the state
  • Applied at the state level 
139
Q

What is an excise tax?

A
  • tax imposed on a specific good/service/occupation/license or activity
  • Tax that provides clear link between tax and taxable item
  • Dedicated source of revenue for specific item
  • Can be used to modify behavior (sin tax)
140
Q

What are some types of intergovernmental revenues?

A
  • contracts
  • grants and shared revenues
  • license fees
  • user fees
  • donations
  • lotteries and gambling
  • investment income
141
Q

What are the types of grants?

A
  1. project/discretionary grants : specific purpose and time
  2. formula: distribution by law or regulation by recipient and/or amount
142
Q

What are the types of formula grants?

A
  1. category grants: narrowly defined purpose (police radios, subsidized housing for seniors)
  2. black grants: multiple categories into one (a single block grant may provide funds for drug/alcohol abuse)
143
Q

What are shared revenues?

How are they distributed over to?

A
  • Revenues shared amongst state/local
  • Distributed per formula (population per county or miles per county)
  • Often collected as a hotel room tax
144
Q

What are project/discretionary grants? Examples?

A

Funding for specific purposes for specific time; funding is competitive

Example: fellowships, scholarships, research

145
Q

How are project/discretionary grants distributed?

A
  • A panel reviews proposals and awards grants
  • The selection of proposals depends on the quality and availability of funds
146
Q

What are formula grants? What are some examples of formula grants?

A
  • Involve several levels of government;
  • A more predictable and stable grant then the project grants

Example: federal pell grants

147
Q

How is the formula for formula grants determined? What can it include?

What does the formula determine?

A

The formula is contained in law/regulations, and determines the recipients and amount awarded

The formula may include population characteristics such as poverty, unemployment rate, income

148
Q

What are some grantor (provider) expectations?

A
  • Expects control/management of transaction
  • services comply with Grant terms
  • Requirements for matching funds and matching level of effort are met
  • expects grantees to report outputs/outcomes in measurable terms
  • Broad goals of grantor may not tied to purpose of Grant (social issues)
149
Q

What are the expectations of the recipients of a grant?

A
  • expect the grant to complement other programs and not provide services. They wouldn’t otherwise.
  • Have a open meeting with grantors and constituents to provide input
  • Guaranteed funds
  • Funds granted in enough time to plan and execute
  • Prompt receipts, once criteria met
150
Q

What is a Local Government Pool (LPI)?

Who publishes the best practices for them?

A

Like a mutual fund, but investors are exclusively government entities
- Policies vary
- The Government Finance Officers Association publishes the best practices for local government investment pools

151
Q

What are license fees? How do they compare to taxes? And what are some examples?

A
  • A fee is to pay for specific service or benefit
  • Taxes are applied to Broad services (fire/police protection) or activities, perhaps not used by the payer (libraries/parks/schools)
  • Examples: professional licenses, drivers licenses, hunting/fishing permits
152
Q

What are user fees? What are some examples? Why are they useful?

A
  • A fee imposed on the user of a specific product or service (fee for using the library)
  • fully or partially offsets the cost of the service
  • Reduces the amount requested in the budget/lower appropriations
153
Q

What is a public/private partnership? What are examples and why are they used?

A
  • services usually a fee based service between a private sector and public sector agreement
  • Example: the private sector and public sector both put funds towards building something (i.e. parking garage). Once built, the revenues collected.
  • used to: to bypass appropriation process and bypass raising taxes and use private sector skills
154
Q

What is interperiod equity?

A

A requirement of debt. Money should be set aside each year to pay off the asset over it’s useful life so the people who benefit from the asset are paying for it.

155
Q

What is refunding?

A

Also known as refinancing. Taking advantage of lower interest rates by issuing new debt, to retire the old debt.

156
Q

What is advance refunding? Why is this done?

A

Issuing new debt, and using debt, proceeds for investment, and then using investment income to retire the old debt. This is done when there are restrictions/covenants that prohibit you from retiring the old debt right away.

157
Q

What are unfunded liabilities?

A

Not enough funds to satisfy current and/or future liabilities. This happens frequently with accumulated vacation or sick leave and pension funds. The government doesn’t set aside enough money to pay the pension funds.

158
Q

What are some things to consider about debt?

A
  1. Are there financial alternatives? (grants, shared revenues, current funds, and restricted funds)
  2. Ability to repay existing that before adding more.
  3. The tax bases ability fund new debt.
  4. the schedule of planned expenditures and debt policies (will they all become do at the same time)
159
Q

What are the three E’a of government debt?

A
  1. Equity – those who benefit should pay.
  2. Effectiveness – sufficient funds for project. Don’t just partially fund then have to issue more later.
  3. Efficiency - lowest cost given risk.
160
Q

What are some long-term financing options for the government?

A
  1. Bonds
  2. Notes.
  3. Lease purchases.
  4. Certificates of participation.
161
Q

What are general obligation bonds (full faith and credit)?

Do they need voter approval?

What’s the rate compared to revenue?

A
  • Bonds that are secured by the full revenue base of the issuer
  • Government agrees to repay the debt from any and all revenue sources
  • Voter approval is required before issuance
  • Issued at a lower interest rate and revenue bonds
  • More likely to be subject to debt limits
  • Used to fun projects that benefit all citizens served by the government
162
Q

What are revenue bonds?

How does the rate compare to general obligation bonds?

A
  • secured by a specific source of financing, such as revenue from the project being funded or a dedicated tax
  • Issued at higher interest rates than general obligation bonds
  • Have lengthy covenants that defined the flow of funds associated with the bond and activity being financed 
163
Q

What are term bonds and what is required with them?

A
  • Bonds that nature all in a single year (20-30 years)
  • Sinking fund is required (money is set aside each year in the fund to pay the term bond at maturity)
164
Q

What is a serial bond? What is an advantage it has over a term bond?

A
  • Number of bonds mature each year over a period of several years
  • reduce the amount of interest paid compared to term bond
165
Q

What is a warrant? When is it issued?

A
  • similar to a check
  • Often issued when there’s not enough revenue to pay off the bond so they delay the payment by issuing a bond
166
Q

What is a bond?

A
  • A legal contract to pay face value of the bond at maturity (a fixed date in the future)
  • issuer pays interest at a fixed rate
  • Bonds pay periodic interest throughout the life of the bond, but some bonds may carry only a single interest payment
167
Q

What are the most common type of government notes?

A

Short term notes

168
Q

What are lease purchases? When are they used? What are some benefits?

A
  • at the end of the lease period, the asset transfers to the government (accounted as capital assets)
  • used to acquire long-term assets through capital leases, sometimes using lease purchase agreements
  • Do not always require voter approval
  • Avoids formal debt limit
169
Q

What are certificates of participation (COP)?

A
  • An alternative to traditional bond financing
  • Participants are financial institutions and other investors who purchase, not a bond, but the right to participate in the income stream of the lease payments
  • avoid debt limits
  • raise/borrow money for capital project without voter approval
170
Q

How do you certificates of participation work?

A

The government makes payments to the financial institution/investors until the end of the term of the agreement. The financial institution may serve as an intermediary and distribute the lease payments to participants.

171
Q

What is the government management cycle?

A

1 planning
2 Program
3 budgeting
4 operations
5 accounting
6 reporting
7 auditing

172
Q

What is federalism?

A

Power is distributed among different levels of government

No one government has complete control over all areas of public policy

173
Q

What is sovereignty?

A

The right to self govern

Nation government cannot be sued by states or citizens without its permission

174
Q

What is popular sovereignty?

A

Citizens hold ultimate authority through ballot and sovereign government is accountable to citizens

175
Q

How are bills passed?

A
  • both House of Representatives and Senate must vote on bill
  • Different versions of the bill or reconciled in conference committees
  • Successful bills are then voted on by both houses
  • Bill goes to President after both houses passed law
176
Q

What are direct action authorities of citizens?

A
  • initiatives: citizens present their view of a problem and proposed solution
  • Referendum: legislative action presents to voters for approval
  • Recall: enables voters to remove elected officials from office
177
Q

How many government entities are there in total?

How many national
How many state
How many local

A

Over 90,000 government entities

One national, 50 state, over 90,000 local

178
Q

What are quasi governmental entities? And why are they formed?

A

Ones that have blended characteristics of government and not for profit

They are sometimes called government corporations

They are formed as support, businesslike functions

179
Q

How are the operating expenses of quasi government entities covered?

A

Through revenues and fees, not appropriations

180
Q

What fiscal and monetary powers does the government have because of sovereignty?

A
  • tax citizens and corporate entities to raise revenue
  • Establish budget and spend public funds for authorized purposes
  • Borrow funds for government operations and capital investments
  • create money (national government only)
181
Q

What are some of the constraints of governmental sovereignty?

A
  • Legal
  • checks and balances of separation of powers
  • slow legislative process
  • ballot box
182
Q

What is a supplemental appropriation or budget amendment?

A

When the appropriation budget is depleted before year end and legislature approves additional funds

183
Q

What is the central role of the budget?

A
  • Define and constrain government operations
  • expresses public policy (reflect negotiations between legislative and executive priorities and embodies the resolution of conflicting views on our resources. It should be raised and used.)
  • Viewed the financial plan by specifying the expenditures for the period and means for financing them.
  • Guides, daily decisions and operations
  • Limits spending by purpose, time and amount
184
Q

What is the budget process?

A
  1. Debates are held over objectives and priorities. Supporters/dissonance examine trade-off, such as economy, geography, international affairs
  2. Budgetary emerge; resource requirements are defined in terms of personnel, equipment, systems, etc. Sources are defined as taxes, borrowing, user fees, and intergovernmental transfers
  3. Budget may even specify how government should be organized.
185
Q

What is the general budget model?

A
  1. Formal/informal public hearings to encourage citizens to discuss needs and priorities.
  2. Executive branch holds debates and hearings to refine and finalize executive budget.
  3. Central management agency is provide budget targets to other agencies and help chief executive fine-tune budget proposals
  4. Executive budget is submitted to legislative branch.
  5. Legislative committees hold hearings. (Proposed budget are only adopted after public examination)
  6. central offices, such as CBO and legislative service offices, play major role to shape debates and advise legislature on probable outcome
  7. Legislative branch reaches agreement, executive branch, science bill, and it becomes a law/local ordinance
186
Q

What are the budgets objectives?

A
  • what
  • How
  • How much?
  • how well
187
Q

What’s the difference between internal and external auditing?

A

Both of focus on internal controls

Internal tests internal controls on budget and financial management procedures; results, findings, and recommendations; focuses on performance

External is wearing an objective third-party, gives an opinion on government, finance reports and practices. Tries to get an unmodified opinion (unqualified opinion)

188
Q

What is the planning stage?

A
  • Mission, goals, objectives
  • Strategic long term
  • establish and define goals
189
Q

What is the programming phase?

A
  • Shorter term
  • links strategies/goals to resources
  • more specific about objectives
  • Cost analysis make/buy decision made
    Identifies most cost-effective means to achieve objectives
  • determines resources and funds to obtain those resources
190
Q

What is the budgeting phase?

A

Budget year revenue and expenses

191
Q

What is the operation phase?

A

Where goals and objectives are implemented

192
Q

The Government Finance Officers Association (GFOA): published a guide to best practices in budgeting. GFOA states budget process should include these principles:

A

Principal I: Establish Broad Goals to Guide Government Decision-Making. Goals serve as a basis for developing policies and programs, including the service types and levels that will be provided and capital asset acquisition and maintenance
* Planning what to do

Principle II: Develop Approaches to Achieve Goals. Specific policies, plans, programs, and management strategies necessary for long term plans. Policies, plans, programs define joe to go about accomplishing broad goals
* Programming how to do it

Principal III: Develop a Budget with Approaches to Achieve Goals. Prepare a financial plan, capital improvement plan, and budget options. Develop long range plan to ensure programs, services, capital assets are affordable over long run
* Budgeting how much is it going to cost

Principal IV: Evaluate Performance and Make Adjustments. Identify practices to monitor and evaluate the governments progress in meeting financial and programmatic goals. Make adjustments to budget and plans/policies as needed
* Operations, execution, measurements

Exam (7 decks)

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