CPRE Finance and Budgeting 5

Question 1

A parks department is considering issuing revenue bonds to finance a new golf course. Which condition is most critical for this financing method to be viable?

Accepted Answer

The projected revenues from the golf course must be sufficient to cover debt service

Answer

Revenue bonds are repaid from the revenues generated by the specific facility or project they finance, so the facility must produce adequate cash flow to service the debt.

Question 2

Under GASB Statement No. 34, parks and recreation agencies must report infrastructure assets using the:

Accepted Answer

Depreciation method or the modified approach in government-wide statements

Answer

GASB 34 requires infrastructure assets to be reported at historical cost and either depreciated or accounted for using the modified approach in government-wide financial statements.

Question 3

A recreation director must reduce the department's operating budget by 8% mid-year due to a revenue shortfall. Which strategy best preserves core program delivery?

Accepted Answer

Prioritize cuts to administrative overhead and non-essential programs first

Answer

Targeting administrative and non-essential costs first protects direct service delivery, which is the agency's primary mission.

Question 4

Which of the following is a characteristic of a Tax Increment Financing (TIF) district that a parks director should understand when seeking park improvement funds?

Accepted Answer

TIF captures incremental property tax growth within a defined district for reinvestment

Answer

TIF districts capture the increase in property tax revenues above a baseline level and redirect those funds to improvements within the district, which can include parks.

Question 5

A parks agency's auditors identify a material weakness in internal controls related to cash handling at recreation centers. The MOST appropriate immediate corrective action is:

Accepted Answer

Implement segregation of duties so no single employee controls all steps of cash receipting

Answer

Segregation of duties—ensuring different staff collect, record, and reconcile cash—is the standard control to prevent and detect errors or fraud in cash handling.

CPRE - Certified Park and Recreation Executive Practice Test

CPRE - Certified Park and Recreation Executive Practice Test

CPRE Finance and Budgeting 5