CPPO END OF COURSE EXAM QUESTIONS AND SOLUTIONS
GRADED A+
✔✔Inter-Sector Efficiency is defined as: - ✔✔Determines whether or not the cost of
government activity yields more benefits to society than if it remained in the private
sector. For example: Should daycare services be funded by the government?
✔✔Inter-program Efficiency is defined as: - ✔✔Judges competing programs and
allocates resources to the program that produces the greatest net benefits. For
example: Should the police budget for youth activities be increased or should the
recreation departments youth programs be increased?
✔✔Intra-program Efficiency is defined as: - ✔✔Determines within each program if
resources should be combined to maximize the net benefits from any given expenditure
increment. For example, would it be more efficient for a specific service to be performed
in-house or contracted out?
✔✔Line item budgets are defined as: - ✔✔The oldest and still the predominant form of
budgeting in the public sector. They are easy to understand and designed to maximize
control and ensure financial accountability.
✔✔Major weaknesses of line item budgets are: - ✔✔They focus on what is purchased
rather than on the achievement of goals
They provide no criteria for evaluating funding to determine what is to be gained or lost
by increasing or decreasing expenditures.
Efficient trade-offs among services are impossible to determine and must be made on
the basis of subjective judgements about service effectiveness.
They are prone to incremental increases in successive fiscal periods.
They encourage a "spend it or lose it" attitude
✔✔Performance Budget are defined as: - ✔✔Relate expenditures and revenues to
workloads. They provide a mechanism to improve the management of service delivery,
with cost efficiency being the principal indicator of managerial effectiveness. "This is
what you are expected to do and here's the money."
✔✔Major weaknesses of performance budgets are: - ✔✔Unit costs are not always
meaningful indicators of progress toward goals
Separated activities assigned to performance units may not include all the
organizational actions that contribute to a particular output.
,Benefits are not measured, as there are no indicators of inter-sector efficiency
Inter-program efficiency cannot be established because unit cost does not indicate the
net value yielded by each program
Funding requests for each activity consists of only a single estimate based on lowest
unit costs; performance budgeting does not facilitate inter-program efficiency
✔✔Program budgets are defined as: - ✔✔related expenditures and revenue to public
goals. This is the most elaborate budget form. They tend to be more long-range, with
multi-year plans along with budget requests. They are designed to have the greatest net
benefit for the cost.
✔✔Major weaknesses of program budgets are: - ✔✔Goals are difficult to define and
formulate
Goals are subject to change and programs must change when goals change
For some goals, it is impossible to obtain measures of benefit and objectives
Systemic evaluation of alternatives is subject to human limitations and time and cost
restraints
✔✔Zero based budgets (ZBB) is defined as: - ✔✔Relate expenditures and revenues to
workloads and organize budget presentations according to "decision packets" of cost
centers for which alternative levels of service delivery can be specified.
✔✔Major weaknesses of Zero based budgets are: - ✔✔Most organizations will not give
managers the required latitude needed to make the ZBB work.
Without objective measurements of cost and benefits, the chief executive cannot judge
inter-sector and inter-program efficiency.
Without a program structure, decision makers cannot conduct coherent analyses of
alternatives.
Since activities in several decision units may contribute to the same output, authority
over services is diffused.
✔✔Results oriented budget is defined as: - ✔✔Budgeting that attempts to link resource
allocation decisions to performance criteria that includes both output and outcome
measures.
✔✔Preparing an operational budget includes: - ✔✔The budget office of the agency
prepares a policy overview, which includes statement of priorities and goals of the
budget and details economic and policy assumptions.
,✔✔When determining service needs the following should be considered: -
✔✔Measuring demand (What is expected of my department?)
Estimating staff needs (Do I have enough staff?)
Measuring workload (Take a look at what needs to be done and can it be done with
current staff and money)
Estimating operating expenses (Do I have enough money?)
✔✔Four types of audits are: - ✔✔Financial and compliance
Economy and efficiency
Program
Performance
✔✔Financial and compliance audits are: - ✔✔Performed by an independent accounting
firm with the main purpose being to detect fraud.
✔✔Economy and efficiency audits are: - ✔✔Management or operational audits. They
examine administrative practices for economy and cost efficiency and attempt to identify
the cause of any cost inefficiencies.
✔✔Program audits: - ✔✔Monitor results to determine the extent to which a
governmental unit has achieved program objectives. they evaluate the cost-
effectiveness of the alternatives employes.
✔✔Performance audits: - ✔✔Review all of the operations and encompass previous
types of audits. Performance audits ensure that those entrusted with the management
of public programs and services are held accountable.
✔✔Smart cards are defined as: - ✔✔Similar to credit cards or pCards, they have an
embedded computer chip that stores data for a variety of uses. The card can be pre-
loaded with a certain amount of currency and serves as an "electronic wallet".
✔✔Benchmarking is defined as: - ✔✔A process in which organizations measure various
aspects of their processes in relation to best practices, usually within their own sector.
✔✔Benchmarking commonly follows the following steps: - ✔✔Planning
Analysis
Integration
Action
Maturity
✔✔In order to perform a benchmark evaluation, data must be collected and divided into
several categories: - ✔✔Quantitative or objective data-Numbers, specifics
Qualitative or subjective data- subject to interpretation
Primary data-gathered for the first time "Raw Data"
, Secondary data-already been gathered and now analyze it
Longitudinal data-gathered over a long period of time by repeated observation
Cross-sectional data-data collected by observing many subjects at the same point in
time.
✔✔Process improvements are: - ✔✔A systematic approach to help any organization
make significant changes in the way it does business.
✔✔Non-value added - ✔✔Activities that generate zero or negative return on the
investment of resources and can usually be eliminated without impairing the process.
✔✔Value-Added - ✔✔Activities that increase the value of the input.
✔✔Douglas McGregor created this theory in 1960: - ✔✔Theory X and Theory Y
✔✔Theory X - ✔✔which has been proven counter effective in most modern practice,
management assumes employees are inherently lazy and will avoid work if they can
and that they inherently dislike work. As a result of this, management believes that
workers need to be closely supervised and comprehensive systems of controls
developed.
✔✔Theory Y - ✔✔In this theory, management assumes employees may be ambitious
and self-motivated and exercise self-control. It is believed that employees enjoy their
mental and physical work duties. According to them work is as natural as play. They
possess the ability for creative problem solving, but their talents are underused in most
organizations.
✔✔Maslow's hierarchy of needs - ✔✔focus on describing the stages of growth in
humans. Maslow used the terms Physiological, Safety, Belonging and Love, Esteem,
Self-Actualization and Self-Transcendence needs to describe the pattern that human
motivations generally move through.
✔✔Process improvement programs include: - ✔✔Six Sigma, Lean thinking, ISO 9000,
Total Quality Management (TQM), Just in time (JIT), benchmarking
✔✔Six Sigma is defined as: - ✔✔Introduced by Motorola in 1981, seeks to improve the
quality of process outputs by identifying and removing the causes of errors an
minimizing variability in business processes.
✔✔Lean Thinking is defined as: - ✔✔originated by Toyota, it is a method that focuses
on providing service in the most efficient manner by improving flow and eliminating
waste. Lean thinking centers around creating more value with less work.
✔✔ISO 9000 is defined as: - ✔✔A family of standards and guidelines for quality in the
manufacturing and service industries from the International Organization for
GRADED A+
✔✔Inter-Sector Efficiency is defined as: - ✔✔Determines whether or not the cost of
government activity yields more benefits to society than if it remained in the private
sector. For example: Should daycare services be funded by the government?
✔✔Inter-program Efficiency is defined as: - ✔✔Judges competing programs and
allocates resources to the program that produces the greatest net benefits. For
example: Should the police budget for youth activities be increased or should the
recreation departments youth programs be increased?
✔✔Intra-program Efficiency is defined as: - ✔✔Determines within each program if
resources should be combined to maximize the net benefits from any given expenditure
increment. For example, would it be more efficient for a specific service to be performed
in-house or contracted out?
✔✔Line item budgets are defined as: - ✔✔The oldest and still the predominant form of
budgeting in the public sector. They are easy to understand and designed to maximize
control and ensure financial accountability.
✔✔Major weaknesses of line item budgets are: - ✔✔They focus on what is purchased
rather than on the achievement of goals
They provide no criteria for evaluating funding to determine what is to be gained or lost
by increasing or decreasing expenditures.
Efficient trade-offs among services are impossible to determine and must be made on
the basis of subjective judgements about service effectiveness.
They are prone to incremental increases in successive fiscal periods.
They encourage a "spend it or lose it" attitude
✔✔Performance Budget are defined as: - ✔✔Relate expenditures and revenues to
workloads. They provide a mechanism to improve the management of service delivery,
with cost efficiency being the principal indicator of managerial effectiveness. "This is
what you are expected to do and here's the money."
✔✔Major weaknesses of performance budgets are: - ✔✔Unit costs are not always
meaningful indicators of progress toward goals
Separated activities assigned to performance units may not include all the
organizational actions that contribute to a particular output.
,Benefits are not measured, as there are no indicators of inter-sector efficiency
Inter-program efficiency cannot be established because unit cost does not indicate the
net value yielded by each program
Funding requests for each activity consists of only a single estimate based on lowest
unit costs; performance budgeting does not facilitate inter-program efficiency
✔✔Program budgets are defined as: - ✔✔related expenditures and revenue to public
goals. This is the most elaborate budget form. They tend to be more long-range, with
multi-year plans along with budget requests. They are designed to have the greatest net
benefit for the cost.
✔✔Major weaknesses of program budgets are: - ✔✔Goals are difficult to define and
formulate
Goals are subject to change and programs must change when goals change
For some goals, it is impossible to obtain measures of benefit and objectives
Systemic evaluation of alternatives is subject to human limitations and time and cost
restraints
✔✔Zero based budgets (ZBB) is defined as: - ✔✔Relate expenditures and revenues to
workloads and organize budget presentations according to "decision packets" of cost
centers for which alternative levels of service delivery can be specified.
✔✔Major weaknesses of Zero based budgets are: - ✔✔Most organizations will not give
managers the required latitude needed to make the ZBB work.
Without objective measurements of cost and benefits, the chief executive cannot judge
inter-sector and inter-program efficiency.
Without a program structure, decision makers cannot conduct coherent analyses of
alternatives.
Since activities in several decision units may contribute to the same output, authority
over services is diffused.
✔✔Results oriented budget is defined as: - ✔✔Budgeting that attempts to link resource
allocation decisions to performance criteria that includes both output and outcome
measures.
✔✔Preparing an operational budget includes: - ✔✔The budget office of the agency
prepares a policy overview, which includes statement of priorities and goals of the
budget and details economic and policy assumptions.
,✔✔When determining service needs the following should be considered: -
✔✔Measuring demand (What is expected of my department?)
Estimating staff needs (Do I have enough staff?)
Measuring workload (Take a look at what needs to be done and can it be done with
current staff and money)
Estimating operating expenses (Do I have enough money?)
✔✔Four types of audits are: - ✔✔Financial and compliance
Economy and efficiency
Program
Performance
✔✔Financial and compliance audits are: - ✔✔Performed by an independent accounting
firm with the main purpose being to detect fraud.
✔✔Economy and efficiency audits are: - ✔✔Management or operational audits. They
examine administrative practices for economy and cost efficiency and attempt to identify
the cause of any cost inefficiencies.
✔✔Program audits: - ✔✔Monitor results to determine the extent to which a
governmental unit has achieved program objectives. they evaluate the cost-
effectiveness of the alternatives employes.
✔✔Performance audits: - ✔✔Review all of the operations and encompass previous
types of audits. Performance audits ensure that those entrusted with the management
of public programs and services are held accountable.
✔✔Smart cards are defined as: - ✔✔Similar to credit cards or pCards, they have an
embedded computer chip that stores data for a variety of uses. The card can be pre-
loaded with a certain amount of currency and serves as an "electronic wallet".
✔✔Benchmarking is defined as: - ✔✔A process in which organizations measure various
aspects of their processes in relation to best practices, usually within their own sector.
✔✔Benchmarking commonly follows the following steps: - ✔✔Planning
Analysis
Integration
Action
Maturity
✔✔In order to perform a benchmark evaluation, data must be collected and divided into
several categories: - ✔✔Quantitative or objective data-Numbers, specifics
Qualitative or subjective data- subject to interpretation
Primary data-gathered for the first time "Raw Data"
, Secondary data-already been gathered and now analyze it
Longitudinal data-gathered over a long period of time by repeated observation
Cross-sectional data-data collected by observing many subjects at the same point in
time.
✔✔Process improvements are: - ✔✔A systematic approach to help any organization
make significant changes in the way it does business.
✔✔Non-value added - ✔✔Activities that generate zero or negative return on the
investment of resources and can usually be eliminated without impairing the process.
✔✔Value-Added - ✔✔Activities that increase the value of the input.
✔✔Douglas McGregor created this theory in 1960: - ✔✔Theory X and Theory Y
✔✔Theory X - ✔✔which has been proven counter effective in most modern practice,
management assumes employees are inherently lazy and will avoid work if they can
and that they inherently dislike work. As a result of this, management believes that
workers need to be closely supervised and comprehensive systems of controls
developed.
✔✔Theory Y - ✔✔In this theory, management assumes employees may be ambitious
and self-motivated and exercise self-control. It is believed that employees enjoy their
mental and physical work duties. According to them work is as natural as play. They
possess the ability for creative problem solving, but their talents are underused in most
organizations.
✔✔Maslow's hierarchy of needs - ✔✔focus on describing the stages of growth in
humans. Maslow used the terms Physiological, Safety, Belonging and Love, Esteem,
Self-Actualization and Self-Transcendence needs to describe the pattern that human
motivations generally move through.
✔✔Process improvement programs include: - ✔✔Six Sigma, Lean thinking, ISO 9000,
Total Quality Management (TQM), Just in time (JIT), benchmarking
✔✔Six Sigma is defined as: - ✔✔Introduced by Motorola in 1981, seeks to improve the
quality of process outputs by identifying and removing the causes of errors an
minimizing variability in business processes.
✔✔Lean Thinking is defined as: - ✔✔originated by Toyota, it is a method that focuses
on providing service in the most efficient manner by improving flow and eliminating
waste. Lean thinking centers around creating more value with less work.
✔✔ISO 9000 is defined as: - ✔✔A family of standards and guidelines for quality in the
manufacturing and service industries from the International Organization for
