GFOA CPFO Capital and Operating
Budgeting UPDATED ACTUAL Exam
Questions and CORRECT Answers
Capital Project Service-Level Goals - CORRECT ANSWER - The means by which a local
government can illustrate to its citizens what level of service can be provided with available
resources.
Needs Assessment - CORRECT ANSWER - This should address any gaps in service
delivery and form the basis for a capital projects request.
Public Participation Survey - CORRECT ANSWER - Should be conducted every few
years with similar questions each time to gauge changing opinions. Questions should therefore
be developed with the anticipation that they will be used for many years.
Public Participation Community Meetings - CORRECT ANSWER - Speaking with
community groups will show the public that the jurisdiction is transparent and responsive and
will encourage citizens to become more involved with government.
Public Information Officer (PIO) - CORRECT ANSWER - Often responsible for writing
newsletters and press releases, maintaining the jurisdictions website, and answering inquiries
from citizens.
Bond Committees - CORRECT ANSWER - Formed for capital projects to provide
feedback on bond referendums.
Bond Referendum - CORRECT ANSWER - May be required under state law, is used to
help ensure the lowest cost financing, and or confirm the public's commitment to proposed
projects.
,Bond Committee Members - CORRECT ANSWER - Typically include former elected
officials, reps of other governing bodies, business and environmental leaders, community
activists, and clients of the service.
Bond Committee Responsibilities - CORRECT ANSWER - Determining the size of the
bond program, ID'ing potential projects, holding public meetings, and producing a report to
elected officials.
Establishing Guiding Principles - CORRECT ANSWER - Before prioritizing projects, the
group as a whole needs to define the broad guiding principles for the process. Examples could
include: equity, diversity, input, sustainability, quality of life, accountability, or affordability.
Establishing Project Scope - CORRECT ANSWER - Means defining the need or needs the
project is meant to address (temporarily or permanently), deciding how the needs are to be
addressed, identifying any other needs or goals that will be created by the project, defining what
the project should be like, and deciding what should and should not be included in the project.
Scope Creep - CORRECT ANSWER - Can increase the duration, complexity and cost of
the project with little and/or noticeable warning.
Project Scope - CORRECT ANSWER - Must be controlled by careful documentation and
project management. Before approval, scope should be defined by a detailed narrative
explanation with supporting back-up.
Project Budget - CORRECT ANSWER - Will incorporate all of the costs associated with
the project, such as design, consultant fees, land acquisition, site preparation, and project
management expenses.
Construction Budget - CORRECT ANSWER - Includes just the portion of the project
costs that are paid to the contractor(s).
Project Cost Estimates - CORRECT ANSWER - More expensive or complex the project,
the more often a cost estimate should be developed.
,Value Engineering - CORRECT ANSWER - Systematic application of recognized
techniques which identify the function of a product or service, establish a value for that function,
and provide the necessary function at the least overall cost.
Capital Financing Costs - CORRECT ANSWER - May be charged to the project and
included in the debt financing or may be separately funded through the operating budget.
Price Changes Over Time - CORRECT ANSWER - A multi-year project will need to
include inflation factors during the construction period.
Regional Inflation Indices - CORRECT ANSWER - Generally more accurate than national
indices and will reflect regional labor and material prices.
Cost Estimation Pitfalls - CORRECT ANSWER - Costs that are occasionally overlooked
include moving costs and inflation.
Marshall-Swift Index - CORRECT ANSWER - Uses certain project attributes to arrive at
an estimated cost per square foot. This measure can then be applied to the total area to calculate
an estimated project cost.
Elements to Include in the Capital Budget - CORRECT ANSWER - Definition of capital
expenditure, summary information, schedule of completion, descriptions of the general scope of
the project, impact on the operating budget, estimated project cost, funding sources, funding
authority, and any analytical information like cost-benefit analysis.
Quality-based Process - CORRECT ANSWER - Focuses on the knowledge, skills and
experience of the professional consultants to meet the projects needs.
Request for Qualifications - CORRECT ANSWER - Similar to an RFP, except fee
proposals are not involved in the selection process.
, Owner's Representative - CORRECT ANSWER - Outside consultant with construction
expertise that will provide oversight, manage the project and coordinate activities between all
members of the project team, including the design professionals and the contractors in the
jurisdictions best interest.
Methods for managing design of capital projects - CORRECT ANSWER - Lowest bid,
construction manager/general contractor, and design/build.
Lowest Bid Aware - CORRECT ANSWER - Most common, often called Design/bid/build
(DBB). Selection is via a qualifications process and construction services are selected through
competitive bidding.
Construction Manager/General Contractor - CORRECT ANSWER - Also known as
"construction manager at risk," allows the jurisdiction to select a construction manager, based on
a qualifications process before the design is complete. Once a manager is selected, all work
organized under a single guaranteed maximum price (GMP) contract. Manager coordinates all
subcontract work.
Design/Build - CORRECT ANSWER - Similar to a CMGC process, but here all work is
awarded to a firm or joint venture that does the design and construction management. With this
method, work is accomplished concurrently, accelerating the completion of the project.
Project Schedule - CORRECT ANSWER - Land Acquisition, Design, Pre-Construction,
Construction, Close-Out, Commissioning, Warranty Period
Architectural Program Development - CORRECT ANSWER - Architectural program is a
document that establishes functions to be included in the facility, overall land needs, and current
and future needs.
Schematic Design - CORRECT ANSWER - Diagrams take shape, progress into drawings
that begin to resemble real plans.
Budgeting UPDATED ACTUAL Exam
Questions and CORRECT Answers
Capital Project Service-Level Goals - CORRECT ANSWER - The means by which a local
government can illustrate to its citizens what level of service can be provided with available
resources.
Needs Assessment - CORRECT ANSWER - This should address any gaps in service
delivery and form the basis for a capital projects request.
Public Participation Survey - CORRECT ANSWER - Should be conducted every few
years with similar questions each time to gauge changing opinions. Questions should therefore
be developed with the anticipation that they will be used for many years.
Public Participation Community Meetings - CORRECT ANSWER - Speaking with
community groups will show the public that the jurisdiction is transparent and responsive and
will encourage citizens to become more involved with government.
Public Information Officer (PIO) - CORRECT ANSWER - Often responsible for writing
newsletters and press releases, maintaining the jurisdictions website, and answering inquiries
from citizens.
Bond Committees - CORRECT ANSWER - Formed for capital projects to provide
feedback on bond referendums.
Bond Referendum - CORRECT ANSWER - May be required under state law, is used to
help ensure the lowest cost financing, and or confirm the public's commitment to proposed
projects.
,Bond Committee Members - CORRECT ANSWER - Typically include former elected
officials, reps of other governing bodies, business and environmental leaders, community
activists, and clients of the service.
Bond Committee Responsibilities - CORRECT ANSWER - Determining the size of the
bond program, ID'ing potential projects, holding public meetings, and producing a report to
elected officials.
Establishing Guiding Principles - CORRECT ANSWER - Before prioritizing projects, the
group as a whole needs to define the broad guiding principles for the process. Examples could
include: equity, diversity, input, sustainability, quality of life, accountability, or affordability.
Establishing Project Scope - CORRECT ANSWER - Means defining the need or needs the
project is meant to address (temporarily or permanently), deciding how the needs are to be
addressed, identifying any other needs or goals that will be created by the project, defining what
the project should be like, and deciding what should and should not be included in the project.
Scope Creep - CORRECT ANSWER - Can increase the duration, complexity and cost of
the project with little and/or noticeable warning.
Project Scope - CORRECT ANSWER - Must be controlled by careful documentation and
project management. Before approval, scope should be defined by a detailed narrative
explanation with supporting back-up.
Project Budget - CORRECT ANSWER - Will incorporate all of the costs associated with
the project, such as design, consultant fees, land acquisition, site preparation, and project
management expenses.
Construction Budget - CORRECT ANSWER - Includes just the portion of the project
costs that are paid to the contractor(s).
Project Cost Estimates - CORRECT ANSWER - More expensive or complex the project,
the more often a cost estimate should be developed.
,Value Engineering - CORRECT ANSWER - Systematic application of recognized
techniques which identify the function of a product or service, establish a value for that function,
and provide the necessary function at the least overall cost.
Capital Financing Costs - CORRECT ANSWER - May be charged to the project and
included in the debt financing or may be separately funded through the operating budget.
Price Changes Over Time - CORRECT ANSWER - A multi-year project will need to
include inflation factors during the construction period.
Regional Inflation Indices - CORRECT ANSWER - Generally more accurate than national
indices and will reflect regional labor and material prices.
Cost Estimation Pitfalls - CORRECT ANSWER - Costs that are occasionally overlooked
include moving costs and inflation.
Marshall-Swift Index - CORRECT ANSWER - Uses certain project attributes to arrive at
an estimated cost per square foot. This measure can then be applied to the total area to calculate
an estimated project cost.
Elements to Include in the Capital Budget - CORRECT ANSWER - Definition of capital
expenditure, summary information, schedule of completion, descriptions of the general scope of
the project, impact on the operating budget, estimated project cost, funding sources, funding
authority, and any analytical information like cost-benefit analysis.
Quality-based Process - CORRECT ANSWER - Focuses on the knowledge, skills and
experience of the professional consultants to meet the projects needs.
Request for Qualifications - CORRECT ANSWER - Similar to an RFP, except fee
proposals are not involved in the selection process.
, Owner's Representative - CORRECT ANSWER - Outside consultant with construction
expertise that will provide oversight, manage the project and coordinate activities between all
members of the project team, including the design professionals and the contractors in the
jurisdictions best interest.
Methods for managing design of capital projects - CORRECT ANSWER - Lowest bid,
construction manager/general contractor, and design/build.
Lowest Bid Aware - CORRECT ANSWER - Most common, often called Design/bid/build
(DBB). Selection is via a qualifications process and construction services are selected through
competitive bidding.
Construction Manager/General Contractor - CORRECT ANSWER - Also known as
"construction manager at risk," allows the jurisdiction to select a construction manager, based on
a qualifications process before the design is complete. Once a manager is selected, all work
organized under a single guaranteed maximum price (GMP) contract. Manager coordinates all
subcontract work.
Design/Build - CORRECT ANSWER - Similar to a CMGC process, but here all work is
awarded to a firm or joint venture that does the design and construction management. With this
method, work is accomplished concurrently, accelerating the completion of the project.
Project Schedule - CORRECT ANSWER - Land Acquisition, Design, Pre-Construction,
Construction, Close-Out, Commissioning, Warranty Period
Architectural Program Development - CORRECT ANSWER - Architectural program is a
document that establishes functions to be included in the facility, overall land needs, and current
and future needs.
Schematic Design - CORRECT ANSWER - Diagrams take shape, progress into drawings
that begin to resemble real plans.
