GFOA CPFO Capital and Operating
Budgeting Exam questions with correct
answers
Capital Project Service-Level Goals - verified answers; The means by which a local government can
illustrate to its citizens what level of service can be provided with available resources.
Needs Assessment - verified answers; This should address any gaps in service delivery and form the
basis for a capital projects request.
Public Participation Survey - verified answers; 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 - verified answers; 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) - verified answers; Often responsible for writing newsletters and press
releases, maintaining the jurisdictions website, and answering inquiries from citizens.
Bond Committees - verified answers; Formed for capital projects to provide feedback on bond
referendums.
Bond Referendum - verified answers; 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 - verified answers; Typically include former elected officials, reps of other
governing bodies, business and environmental leaders, community activists, and clients of the service.
,Bond Committee Responsibilities - verified answers; Determining the size of the bond program, ID'ing
potential projects, holding public meetings, and producing a report to elected officials.
Establishing Guiding Principles - verified answers; 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 - verified answers; 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 - verified answers; Can increase the duration, complexity and cost of the project with
little and/or noticeable warning.
Project Scope - verified answers; 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 - verified answers; 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 - verified answers; Includes just the portion of the project costs that are paid to
the contractor(s).
Project Cost Estimates - verified answers; More expensive or complex the project, the more often a
cost estimate should be developed.
Value Engineering - verified answers; 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 - verified answers; 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 - verified answers; A multi-year project will need to include inflation factors
during the construction period.
Regional Inflation Indices - verified answers; Generally more accurate than national indices and will
reflect regional labor and material prices.
Cost Estimation Pitfalls - verified answers; Costs that are occasionally overlooked include moving costs
and inflation.
Marshall-Swift Index - verified answers; 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 - verified answers; 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 - verified answers; Focuses on the knowledge, skills and experience of the
professional consultants to meet the projects needs.
Request for Qualifications - verified answers; Similar to an RFP, except fee proposals are not involved
in the selection process.
Owner's Representative - verified answers; 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 - verified answers; Lowest bid, construction
manager/general contractor, and design/build.
, Lowest Bid Aware - verified answers; 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 - verified answers; 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 - verified answers; 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 - verified answers; Land Acquisition, Design, Pre-Construction, Construction, Close-
Out, Commissioning, Warranty Period
Architectural Program Development - verified answers; Architectural program is a document that
establishes functions to be included in the facility, overall land needs, and current and future needs.
Schematic Design - verified answers; Diagrams take shape, progress into drawings that begin to
resemble real plans.
Design Development - verified answers; Provides plans, elevations, and other info that clearly defines
the nature of the project.
Base Bid - verified answers; Owner receives a single bid from each bidder
Alternate Bid - verified answers; Allow jurisdiction to request and obtain prices for either adding or
deducting specific pieces of work or changes in the project schedule.
Pre-Construction - verified answers; Process to understand what federal/state and local regulatory
approvals are required and the appropriate steps to obtain them.
Budgeting Exam questions with correct
answers
Capital Project Service-Level Goals - verified answers; The means by which a local government can
illustrate to its citizens what level of service can be provided with available resources.
Needs Assessment - verified answers; This should address any gaps in service delivery and form the
basis for a capital projects request.
Public Participation Survey - verified answers; 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 - verified answers; 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) - verified answers; Often responsible for writing newsletters and press
releases, maintaining the jurisdictions website, and answering inquiries from citizens.
Bond Committees - verified answers; Formed for capital projects to provide feedback on bond
referendums.
Bond Referendum - verified answers; 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 - verified answers; Typically include former elected officials, reps of other
governing bodies, business and environmental leaders, community activists, and clients of the service.
,Bond Committee Responsibilities - verified answers; Determining the size of the bond program, ID'ing
potential projects, holding public meetings, and producing a report to elected officials.
Establishing Guiding Principles - verified answers; 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 - verified answers; 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 - verified answers; Can increase the duration, complexity and cost of the project with
little and/or noticeable warning.
Project Scope - verified answers; 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 - verified answers; 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 - verified answers; Includes just the portion of the project costs that are paid to
the contractor(s).
Project Cost Estimates - verified answers; More expensive or complex the project, the more often a
cost estimate should be developed.
Value Engineering - verified answers; 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 - verified answers; 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 - verified answers; A multi-year project will need to include inflation factors
during the construction period.
Regional Inflation Indices - verified answers; Generally more accurate than national indices and will
reflect regional labor and material prices.
Cost Estimation Pitfalls - verified answers; Costs that are occasionally overlooked include moving costs
and inflation.
Marshall-Swift Index - verified answers; 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 - verified answers; 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 - verified answers; Focuses on the knowledge, skills and experience of the
professional consultants to meet the projects needs.
Request for Qualifications - verified answers; Similar to an RFP, except fee proposals are not involved
in the selection process.
Owner's Representative - verified answers; 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 - verified answers; Lowest bid, construction
manager/general contractor, and design/build.
, Lowest Bid Aware - verified answers; 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 - verified answers; 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 - verified answers; 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 - verified answers; Land Acquisition, Design, Pre-Construction, Construction, Close-
Out, Commissioning, Warranty Period
Architectural Program Development - verified answers; Architectural program is a document that
establishes functions to be included in the facility, overall land needs, and current and future needs.
Schematic Design - verified answers; Diagrams take shape, progress into drawings that begin to
resemble real plans.
Design Development - verified answers; Provides plans, elevations, and other info that clearly defines
the nature of the project.
Base Bid - verified answers; Owner receives a single bid from each bidder
Alternate Bid - verified answers; Allow jurisdiction to request and obtain prices for either adding or
deducting specific pieces of work or changes in the project schedule.
Pre-Construction - verified answers; Process to understand what federal/state and local regulatory
approvals are required and the appropriate steps to obtain them.
