Public Finance Defined (Gov Fin Analysis)

Question 1

Asset

Answer 1

Anything the government owns that has value, such as cash, equipment or buildings.

Question 2

Budget Solvency

Answer 2

A government is budget solvent if its budgeted revenues meet or exceed its budgeted spending; often described as the fourth type of solvency.

Question 3

Cash Solvency

Answer 3

A government’s ability to cover expenses that will come due in the next 60 to 90 days using available cash on hand.

Question 4

Debt Affordability

Answer 4

A government’s ability to repay debt given its current and expected revenues.

Question 5

Debt Capacity

Answer 5

The amount of money a government can legally borrow within state law.

Question 6

Financial Health

Answer 6

A state or local government is financially healthy if it can deliver the services its citizens expect, with the resources its citizens provide, now and in the future

Question 7

Financial Performance

Answer 7

How well a government’s typical revenues cover its typical expenses

Question 8

Financial Position

Answer 8

A government’s ability to pay its bills as they come due

Question 9

Fiscal Policy Space

Answer 9

Flexibility in a government’s budget that allows it to shift funds based on needs through actions such as raising taxes, negotiating labor costs and reducing spending on social services

Question 10

Funds

Answer 10

Stand-alone groups of accounts within a government

Question 11

Fund Balance

Answer 11

Difference between assets and liabilities in a governmental fund; reveals the accumulated effect of a government’s past general fund surpluses and deficits

Question 12

Liability

Answer 12

Money the government owes, such as unpaid invoices or pension liabilities

Question 13

Long Term Solvency

Answer 13

A government’s ability to generate the revenues it will need to cover long-term spending needs such as principal and interest on debt, pensions and retiree health care, and infrastructure requirements

Question 14

Net Assets

Answer 14

Difference between assets and liabilities in a governmental fund; often mentioned as an indicator of government financial health, most commonly discussed is general fund balance

Question 15

Prospective Systems

Answer 15

Financial systems that use existing data to say something about a government’s current financial health

Question 16

Salary Lapse

Answer 16

A chronic problem in government that occurs when a portion of a budgeted salary becomes available

Question 17

Service-Level Solvency

Answer 17

A government’s capacity to continue to deliver basic services in the face of major changes in its economic and political circumstances

Question 18

Solvency

Answer 18

A government’s ability to pay bills that will arrive in the future

Question 19

The three primary types of solvency include:

Answer 19

Cash Solvency, Long-Term Solvency, Service Level Solvency

Question 20

10-Point Test

Answer 20

A retrospective system based on 10 measures from a government’s financial statements

Question 21

For Governmental and Business Type Activities, how is profit defined?

Answer 21

Change in Net Position

Question 22

For the General Fund and Special Projects how is profit defined?

Answer 22

Change in Fund Balance

Question 23

What financial statement do you use to find the category of Net Position or Net Assets for Governmental Activities or Business Type Activities?

Answer 23

The Statement of Net Position

Question 24

What are the categories of Net Assets for General and Special projects of the government and where do you find them?

Answer 24

In the Balance Sheet

1. ) Non-Spendable
2. ) Restricted
3. ) Committed
4. ) Assigned
5. ) Unassigned