Certified Municipal Finance Officer (CMFO)
CMFO - CERTIFIED MUNICIPAL FINANCE OFFICER | VERIFIED
EXAM SOLUTIONS - COMPREHENSIVE QUESTIONS AND
ANSWERS - CURRENT VERSION
CERTIFIED MUNICIPAL FINANCE OFFICER (CMFO)
1. Which state agency has primary oversight and supervisory authority
over municipal finance in New Jersey?
A. NJ Department of Treasury
B. Office of the State Comptroller
C. Division of Local Government Services (DLGS), Department of
Community Affairs
D. NJ Division of Taxation
C. Division of Local Government Services (DLGS), Department of
Community Affairs — DLGS, within DCA, administers the Local
Budget Law, Local Bond Law, and other municipal finance statutes.
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, Certified Municipal Finance Officer (CMFO)
2. The Local Finance Board primarily has authority over which of the
following?
A. Auditing federal grants
B. Setting municipal tax rates
C. Certifying voting machines
D. Approval of local government debt issuance and financial agreements
D. Approval of local government debt issuance and financial
agreements — The Local Finance Board approves bond ordinances,
refunding bonds, and other debt-related matters under the Local
Bond Law.
3. What is the statutory fiscal year for most New Jersey municipalities?
A. October 1 through September 30
B. Calendar year (January 1 through December 31), unless a state fiscal
year transition is adopted
C. April 1 through March 31
D. July 1 through June 30 only
B. Calendar year (January 1 through December 31), unless a state
fiscal year transition is adopted — NJ municipalities generally
operate on the calendar year, though the state permits an optional
state fiscal year transition.
4. Which official is legally responsible for the custody and
disbursement of municipal funds?
A. Chief Financial Officer (CFO)/Treasurer
B. Construction Official
C. Municipal Clerk
D. Tax Assessor
A. Chief Financial Officer (CFO)/Treasurer — The CFO/Treasurer is
statutorily charged with custody of municipal funds and proper
accounting.
5. Who is responsible for assessing real property for local property tax
purposes?
A. Municipal Tax Assessor
B. County Board of Taxation
C. Director of the Division of Taxation
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, Certified Municipal Finance Officer (CMFO)
D. Municipal Tax Collector
A. Municipal Tax Assessor — The tax assessor values property
annually; the county board reviews and equalizes assessments.
6. The "Chapter 123" ratio relates to which process?
A. Allocating state aid
B. Setting the CAP index
C. Determining whether an assessment is discriminatory relative to the
average ratio for tax appeal purposes
D. Calculating pension contribution rates
C. Determining whether an assessment is discriminatory relative to
the average ratio for tax appeal purposes — Chapter 123 establishes
the common level range used in tax appeal cases.
7. Which entity certifies the equalized valuation of a municipality?
A. DLGS Bureau of Financial Regulation
B. Municipal governing body
C. County Board of Taxation, subject to Director of the Division of
Taxation review
D. Local Finance Board
C. County Board of Taxation, subject to Director of the Division of
Taxation review — Equalized valuations are used for apportioning
county taxes and state aid formulas.
8. What is the primary purpose of the Local Budget Law (N.J.S.A. 40A:4-
1 et seq.)?
A. To set employee salary schedules
B. To establish uniform procedures for municipal budget preparation,
adoption, and control
C. To govern land use approvals
D. To regulate municipal elections
B. To establish uniform procedures for municipal budget
preparation, adoption, and control — The Local Budget Law provides
the statutory framework for the entire municipal budget cycle.
9. The "CAP law" primarily restricts what?
A. The interest rate on bond anticipation notes
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, Certified Municipal Finance Officer (CMFO)
B. The annual increase in municipal tax levy or appropriations, subject to
permitted exceptions
C. The number of municipal employees
D. The length of council terms
B. The annual increase in municipal tax levy or appropriations,
subject to permitted exceptions — New Jersey has both an
appropriations CAP and a 2% tax levy CAP with statutory exceptions.
10. Which form of government requires a municipality to have an
appointed municipal administrator or manager in most cases?
A. Commission form only
B. Council-Manager (Optional Municipal Charter Law / Faulkner Act)
C. Special charter form only
D. Township form under Title 40
B. Council-Manager (Optional Municipal Charter Law / Faulkner Act)
— Council-Manager government under the Faulkner Act centralizes
administration under a professional manager.
11. Who typically signs municipal checks/warrants along with the CFO?
A. State Auditor
B. County Treasurer
C. Mayor or another authorized governing body member as designated by
ordinance/resolution
D. Municipal Prosecutor
C. Mayor or another authorized governing body member as
designated by ordinance/resolution — Dual signatures are
commonly required as an internal control on disbursements.
12. What is the primary role of the Municipal Clerk in the finance
process?
A. Setting the tax rate
B. Custodian of records, including certified copies of ordinances,
resolutions, and minutes related to financial actions
C. Approving purchase orders
D. Preparing the annual audit
B. Custodian of records, including certified copies of ordinances,
resolutions, and minutes related to financial actions — The clerk
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CMFO - CERTIFIED MUNICIPAL FINANCE OFFICER | VERIFIED
EXAM SOLUTIONS - COMPREHENSIVE QUESTIONS AND
ANSWERS - CURRENT VERSION
CERTIFIED MUNICIPAL FINANCE OFFICER (CMFO)
1. Which state agency has primary oversight and supervisory authority
over municipal finance in New Jersey?
A. NJ Department of Treasury
B. Office of the State Comptroller
C. Division of Local Government Services (DLGS), Department of
Community Affairs
D. NJ Division of Taxation
C. Division of Local Government Services (DLGS), Department of
Community Affairs — DLGS, within DCA, administers the Local
Budget Law, Local Bond Law, and other municipal finance statutes.
Page 1 of 63
, Certified Municipal Finance Officer (CMFO)
2. The Local Finance Board primarily has authority over which of the
following?
A. Auditing federal grants
B. Setting municipal tax rates
C. Certifying voting machines
D. Approval of local government debt issuance and financial agreements
D. Approval of local government debt issuance and financial
agreements — The Local Finance Board approves bond ordinances,
refunding bonds, and other debt-related matters under the Local
Bond Law.
3. What is the statutory fiscal year for most New Jersey municipalities?
A. October 1 through September 30
B. Calendar year (January 1 through December 31), unless a state fiscal
year transition is adopted
C. April 1 through March 31
D. July 1 through June 30 only
B. Calendar year (January 1 through December 31), unless a state
fiscal year transition is adopted — NJ municipalities generally
operate on the calendar year, though the state permits an optional
state fiscal year transition.
4. Which official is legally responsible for the custody and
disbursement of municipal funds?
A. Chief Financial Officer (CFO)/Treasurer
B. Construction Official
C. Municipal Clerk
D. Tax Assessor
A. Chief Financial Officer (CFO)/Treasurer — The CFO/Treasurer is
statutorily charged with custody of municipal funds and proper
accounting.
5. Who is responsible for assessing real property for local property tax
purposes?
A. Municipal Tax Assessor
B. County Board of Taxation
C. Director of the Division of Taxation
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, Certified Municipal Finance Officer (CMFO)
D. Municipal Tax Collector
A. Municipal Tax Assessor — The tax assessor values property
annually; the county board reviews and equalizes assessments.
6. The "Chapter 123" ratio relates to which process?
A. Allocating state aid
B. Setting the CAP index
C. Determining whether an assessment is discriminatory relative to the
average ratio for tax appeal purposes
D. Calculating pension contribution rates
C. Determining whether an assessment is discriminatory relative to
the average ratio for tax appeal purposes — Chapter 123 establishes
the common level range used in tax appeal cases.
7. Which entity certifies the equalized valuation of a municipality?
A. DLGS Bureau of Financial Regulation
B. Municipal governing body
C. County Board of Taxation, subject to Director of the Division of
Taxation review
D. Local Finance Board
C. County Board of Taxation, subject to Director of the Division of
Taxation review — Equalized valuations are used for apportioning
county taxes and state aid formulas.
8. What is the primary purpose of the Local Budget Law (N.J.S.A. 40A:4-
1 et seq.)?
A. To set employee salary schedules
B. To establish uniform procedures for municipal budget preparation,
adoption, and control
C. To govern land use approvals
D. To regulate municipal elections
B. To establish uniform procedures for municipal budget
preparation, adoption, and control — The Local Budget Law provides
the statutory framework for the entire municipal budget cycle.
9. The "CAP law" primarily restricts what?
A. The interest rate on bond anticipation notes
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, Certified Municipal Finance Officer (CMFO)
B. The annual increase in municipal tax levy or appropriations, subject to
permitted exceptions
C. The number of municipal employees
D. The length of council terms
B. The annual increase in municipal tax levy or appropriations,
subject to permitted exceptions — New Jersey has both an
appropriations CAP and a 2% tax levy CAP with statutory exceptions.
10. Which form of government requires a municipality to have an
appointed municipal administrator or manager in most cases?
A. Commission form only
B. Council-Manager (Optional Municipal Charter Law / Faulkner Act)
C. Special charter form only
D. Township form under Title 40
B. Council-Manager (Optional Municipal Charter Law / Faulkner Act)
— Council-Manager government under the Faulkner Act centralizes
administration under a professional manager.
11. Who typically signs municipal checks/warrants along with the CFO?
A. State Auditor
B. County Treasurer
C. Mayor or another authorized governing body member as designated by
ordinance/resolution
D. Municipal Prosecutor
C. Mayor or another authorized governing body member as
designated by ordinance/resolution — Dual signatures are
commonly required as an internal control on disbursements.
12. What is the primary role of the Municipal Clerk in the finance
process?
A. Setting the tax rate
B. Custodian of records, including certified copies of ordinances,
resolutions, and minutes related to financial actions
C. Approving purchase orders
D. Preparing the annual audit
B. Custodian of records, including certified copies of ordinances,
resolutions, and minutes related to financial actions — The clerk
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