CPRP Administration and Finance 3 — Questions and Answers
Question 1: Which financial statement shows a park and recreation agency's revenues and expenditures over a specific period?
- Balance sheet
- Statement of revenues and expenditures (Correct answer)
- Cash flow statement
- Statement of net position
Correct answer: Statement of revenues and expenditures
The statement of revenues and expenditures (or statement of activities) summarizes financial activity over an accounting period.
Question 2: A park district is considering issuing general obligation bonds. Which factor most directly affects the interest rate the agency will pay?
- The agency's credit rating (Correct answer)
- The number of parks in the district
- The agency's total acreage
- The number of full-time employees
Correct answer: The agency's credit rating
Credit ratings assigned by agencies like Moody's or S&P directly influence bond interest rates by signaling the issuer's creditworthiness.
Question 3: What is the primary purpose of an indirect cost allocation plan in a parks agency?
- To track volunteer hours
- To distribute overhead costs across programs and departments (Correct answer)
- To calculate depreciation on equipment
- To set admission fee schedules
Correct answer: To distribute overhead costs across programs and departments
Indirect cost allocation plans systematically distribute shared overhead costs (administration, utilities) to programs for accurate cost accounting.
Question 4: A recreation manager discovers mid-year that a program is significantly over budget. Which action should be taken FIRST?
- Cancel the program immediately
- Identify the cause of the variance before making decisions (Correct answer)
- Transfer funds from another department without approval
- Issue a supplemental appropriation
Correct answer: Identify the cause of the variance before making decisions
Identifying the root cause of a budget variance is the essential first step before any corrective action can be properly targeted.
Question 5: Which procurement method is typically required when a parks agency purchases goods or services above a specified dollar threshold?
- Sole source purchase
- Competitive sealed bidding (Correct answer)
- Petty cash purchase
- Emergency purchase
Correct answer: Competitive sealed bidding
Most government agencies require competitive sealed bidding (formal competitive bidding) for purchases above a set threshold to ensure transparency and value.
Question 6: What does the term 'encumbrance' mean in governmental accounting?
- Outstanding debt on a capital project
- A reservation of funds for a future purchase obligation (Correct answer)
- Excess revenue carried over to next year
- A penalty assessed for late payment
Correct answer: A reservation of funds for a future purchase obligation
An encumbrance is a reservation of appropriated funds to cover a commitment or purchase order that has not yet been paid.
Question 7: Under the Americans with Disabilities Act (ADA), which aspect of facility planning directly affects a parks agency's capital budget?
- Marketing budget allocations
- Transition plan costs for accessibility improvements (Correct answer)
- Staff overtime calculations
- Seasonal hiring projections
Correct answer: Transition plan costs for accessibility improvements
ADA transition plans identify barriers and schedule capital expenditures to bring facilities into compliance over time.
CPRP Administration and Finance 3
Which financial statement shows a park and recreation agency's revenues and expenditures over a specific period?