PADM 5400 Exam 1 2025

Public goods - Correct Ans-Goods and services provided by local government that cannot be sold in units and whose benefits accrue to all citizens These goods and services are generally accounted for in governmental types of funds and are financed from general taxes Non-rivalrous and non-excludable. Example: public safety. All members of the public have a right to safety, not just the ones who can afford it. Private goods - Correct Ans-Consumer goods and services that are sold in discrete units for a price and whose benefits nonbuyers are effectively excluded from enjoying Typically produced by the private market, but local governments assume responsibility for their production if there is no profit incentive for private investors Government can finance private goods and services through charges to users or through general revenues Rivalrous and excludable. Consumptions by one person preclude others from consuming them and their benefits are limited to those willing to pay for it. Can be divided. Merit goods - Correct Ans-Services or goods that provide such a benefit to the entire community that the government steps in and provides it for free. These are goods and services endowed with a public purpose but providing individual benefits that can be denied to those unwilling to pay for them Some of the benefits from these goods and services accrue to the whole community, such as the improvement of business opportunities or the creation of jobs The remaining private benefits should be financed by service charge to users Example: Highways, water, or education Operating budget - Correct Ans-The portion of the budget that deals with recurring expenditures Reports the spending plan for a government's ongoing services, such as police and fire protection, parks and recreation, water, and sewer service. Typically organizes information by departments and provides details on such line items as personnel, supplies, contract services, travel, utilities, and smaller capital items (e.g., office equipment) Receives money from current revenues, such as property, sales, and income taxes; service charges; fees and fines; and grants. Capital budget - Correct Ans-A spending plan for improvements to or acquisition of land, facilities, equipment, and infrastructure Balances revenues and expenditures, specifies the sources of revenues, lists each project or acquisition, and must ordinarily be approved through adoption of an appropriation by the legislative body One-time non recurring Example: highway and building construction (typically a part of the Capital Improvement plan CIP) Comprehensive budget - Correct Ans-Consists a projection of all the recurring income and expenditure and non-recurring expenditure Includes all fund types in the annual budget process Annual financial report - Correct Ans-Compares the appropriation for each department, as amended with the actual amount of expenditures Fiscal year - Correct Ans-The start of a budgeting cycle (typically starts Oct 1 - Sept 31) Current year - Correct Ans-Current fiscal year in which a budget is prepared and adopted Budget year - Correct Ans-The financial year of the municipality for which an annual budget is to be approved Actual budget - Correct Ans-The process of comparing your organization's predicted budget to the amount you actually have, in order to find the difference Estimated budget - Correct Ans-A preliminary assessment either of funds project to be available Approved budget - Correct Ans-Instructs the accounting system on how much to set aside in the fund balance for reserves and what interfund transfers to make, and it provides the accounting system with information on the amount and type of revenues to accrue Final budget - Correct Ans-The adopted budget adjusted by all revisions through the fiscal year Current expenditures - Correct Ans-Expenditures on goods and service consumed within the current year Current revenues - Correct Ans-Revenues gained from goods and services within the current year Long-term revenues - Correct Ans-Advances received from customers for goods or services expected to be delivered in greater than one year. Since this revenue is considered 'unearned', a liability for this prepayment is recorded on the balance sheet until delivery of goods or completion of services AKA "deferred revenue" Long-term expenditures - Correct Ans-Long-term investments, meaning the assets purchased have a useful life of one year or more. Types of capital expenditures can include purchases of property, equipment, land, computers, furniture, and software. Balanced budget - Correct Ans-When current revenues = current expenditures Deficit budget - Correct Ans-When current expenditures current revenues Surplus budget - Correct Ans-When current revenues current expenditures Structural deficit - Correct Ans-When a budget deficit persists for some time Line-item budget - Correct Ans-Shifted power away from political bosses to legislative bodies Collects and reports information on inputs (resources) used in the productions of government goods and services Zero-Base Budget (ZBB) - Correct Ans-In response to pressure to limit government spending, this budget relies on existing accounting information and focuses on budget inputs (the resources used by local governments to produce goods and services), organizing them into decision packages that reflect various levels of effort and costs Target-base budget - Correct Ans-The budget office gives each department a maximum dollar figure for its budget request, basing its targets for each department on revenue estimates for the forthcoming fiscal year and on any changes in policy markers' priorities Intended to simplify budget preparation, mitigate interdepartmental conflict, and gamesmanship Performance budgeting - Correct Ans-A budgeting format that includes (1) performance goals and objectives, and (2) inputs, outputs, outcomes, efficiency, and effectiveness measures for each governmental program Uses performance measures to monitor the use of funds and to identify ways to improve productivity Program budgeting - Correct Ans-Budgeting in which budgetary information and allocated funds are organized along program rather than departmental lines Focuses attention on outputs. Organizes government activities into programs and identifies alternatives for achieving each goal, determines the costs and benefits of each alternative, and selects the alternative that maximizes net benefits. Entreprenurial Budgeting - Correct Ans-Budget preparation procedures that interject market-like measures, such as competition and performance contracting, into budget deliberations A practice to transform cities into entrepreneurial enterprises with the goal of introducing competition into the process for setting spending priorities. (Balanced scorecard, Budgeting for outcomes, and responsibility-centered management) Decision packages - Correct Ans-Used with ZBB to describe the various level of spending proposals that departments used when submitting their budget requests There are three types of decision packages: -Base-level Package: meets only the most basic needs -Current Service Package: ensures delivery of services at the current level -Enhanced Package: allows the decision unit to extend its services to currently unmet needs Example, a fire department has a base package to run their department, but you could buy a different package that also includes replacement for all the fire trucks on top of the base requirements. Enhancement packages - Correct Ans-A type of decision package used with ZBB that allows the decision unit to extend its services to currently unmet needs Current Services budget (AKA Base Budget) - Correct Ans-Used with target-based budgeting. The departments appropriation for the current year unless it happens to contain funding for one-time purchases or for a position that was filled well into the fiscal year A budget that provides an estimate of the spending authority needed to continue current level of service with no changes in the level of effort Management by Objectives (MBO) - Correct Ans-A management tool popularized during the 1960s and 1970s. Found in performance budgeting. A top-down process; each level in the organization develops performance objectives for the forthcoming year. Employees negotiate a performance agreement with their supervisor, which becomes the basis for evaluating the employee's year-end job performance. Total Quality Management (TQM) - Correct Ans-Found in program budgeting, an approach to management improvement that strives to create a culture of quality in the organization whereby all employees continually seek ways to improve outputs. Driven by customer satisfaction, TQM relies on employee-based quality circles to generate ideas for improving service outputs and, ultimately, outcomes. Inputs and Outputs - Correct Ans-Inputs = all costs or expenditures (staffings, programs) Outputs = labor * money Every budget decision has unintended consequences, and budget deliberations help community leaders ferret out a better, albeit still imperfect, understanding of both the intended and unintended consequences of their choices. It is through this learning process and the conflict inherent in budget deliberations that budget data are converted into budget decisions. Outcomes - Correct Ans-Major goals/results of your inputs and outputs The goal is to provide better information that helps council members make better decisions, provide better procedures to increase the accountability of local governments to their citizens, and thereby increase the efficiency and effectiveness of government. Budgeting for outcomes relies on competition among city departments as well as with businesses and nonprofits outside government to bid on the provision of city services. Example: Higher ratings, profit Budget linkages - Correct Ans-The linkages between budget inputs and outcomes The process of preparing a budget is a