Module 2: Operating, Budgeting, Accounting and Reporting Flashcards
In 1970, who redefined accounting as a service activity whose function is to provide quantitative information primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.
American Institute of Certified Public Accountants (AICPA)’s Accounting Principles Board
Name the three types of accounting bases that define the timing of recording transactions.
- Cash Basis
- Accrual Basis
- Modified Accrual Basis
Name the 7 main accounting functions.
- Accounts Payable (AP)
- Accounts Receivable (AR)
- Payroll
- General Ledger (GL)
- Grant Accounting
- Financial Reporting
- Budgeting
According to GAAP, all transactions are recorded using what method?
double-entry method
What is the list of all accounts used in recording transactions called?
chart of accounts
What are the two policy setting boards established by the Financial Accounting Foundation (FAF)?
Financial Accounting Standards Board (FASB) and Governmental Accounting Standards Board (GASB)
The standards that FASB and GASB prescribe are known as what?
Generally Accepted Accounting Principles (GAAP)
GAAP includes principles on what?
Recognition, Measurement, Presentation, and Disclosure
This is defined as techniques and concepts for integrated management of businesses as a whole from the viewpoint of the effective use of management resources to improve the efficiency of enterprise management.
Enterprise Resource Planning (ERP)
This is a forecast of revenues and expenses for a specific period of time.
budget
What are the two main types of budgets?
operating and capital
This type of budget addresses items that are viewed as investments in assets that have useful lives extending beyond a single fiscal year and exceeding a certain value (as determined by the airport’s capitalization policy).
capital budget
What are the six steps in the budgeting cycle?
Planning, Preparation, Approval, Execution (or Expenditure), Analysis, and Audit
What are the three different budgeting responsibility types?
top-down, bottom-up, collaborative (or negotiated) budgeting
Name the four types of budgeting techniques discussed in this module?
- Incremental Budgeting
- Zero-Based Budgeting (ZBB)
- Management by Objectives (MBO)
- Activity-Based Budgeting (ABB)
This organization represents public finance officials throughout the U.S. and Canada with a mission to advance excellence in public finance.
Government Finance Officers Association (GFOA)
What are the three basic financial statements that airports provide at the end of each fiscal year?
- Statement of Net Positions (balance sheet)
- Statement of Revenues, Expenses, and Changes in Net Position/Assets (income statement)
- Statement of Cash Flows
The Cash Flow Statement breaks down cash flow from what three different activities?
- Cash Flow from Operations
- Cash Flow from Investing Activities
- Cash Flow from Financing Activities
What are the four types of audit opinions?
- Unqualified Opinion (“clean”)
- Qualified Opinion
- Disclaimer of Opinion
- Adverse Opinion
This type of audit is required from all non-federal government agencies and non-profit organizations that expend $750,000 or more in federal grants during a fiscal year.
Single Audit (formerly a A-133 Audit)
This type of audit is required of most commercial service airports to provide an opinion of the fairness and reasonableness of the public agency’s procedures for receiving, holding, and using PFC revenue.
PFC Audit
Name five entities that the airport must ensure receive copies of the financial statement audit.
- Banks or financial institutions via loans or financing documents
- Bond insurance agency
- Bond trustees
- Municipal Securities Rulemaking Board (MSRB) Electronic Municipal Market Access (EMMA) website
- Any overseeing governmental entity of the airport
What is the name of the DOTs web-based portal for grant recipients to request grant payments and monitor the status of those payments?
Delphi eInvoicing System
An agreement between two or more governments to solve problems of mutual concern.
Intergovernmental Agreements (IGA)
The FAA requires the airport sponsors to submit a 5-year what? And update it annually indicating expected capital expenditures during that time?
Capital Improvement Plan (CIP)
States that participate in this program receive AIP funds and prioritize, select, and fund AIP projects at defined small airports.
State Block Grant Program
This report, prepared by government entities as encouraged by GASB, encompasses all funds of the primary government.
Comprehensive Annual Financial Report (CAFR)
The minimum required sections of the CAFR?
- Introductory Section
- Financial Section
- Statistical Section
What makes up the Financial Section of a CAFR?
- Independent Auditor’s Report
- Management’s Discussion & Analysis (MD&A)
- Financial Statements
- Supplementary Info, other than MD&A
- Combined and individual fund statements and schedules
What 5 categories of statistical information are required in the CAFR?
- Financial trends
- Revenue capacity
- Debt capacity
- Demographic & economic information
- Operating information
According to 14 CFR, Part 158, how often must airports file PFC reports?
quarterly
What is required in the quarterly PFC report?
- Actual PFC revenue received; interest earned, & project expenditures
- Cumulative PFC revenue received, interest earned, project expenditures, and amount committed for use on currently approved projects.
- PFC level for each project.
- Each projects current schedule.
What are the two different FAA AIP Grant reports outlined in the AIP handbook?
- Quarterly Performance Report
- Federal Financial Report (SF-425)
What are the two financial reports/forms that all U.S. commercial airports must file with the FAA?
Form 126 “Financial Governmental Payment Report” and Form 127 “The Operating and Financial Summary”
What section of Form 127 is optional for an airport having fewer than 25,000 enplanement in the preceding calendar year?
Section 16 - operating statistics
What calculation on Form127 is found by dividing the passenger airline aeronautical revenue by the enplanements reported?
Cost Per Enplaned Passenger (CPE)
