CPRP Administration and Finance 4 — Questions and Answers
Question 1: Which type of fund is most commonly used by park and recreation agencies to account for general operating activities?
- Enterprise fund
- Capital projects fund
- General fund (Correct answer)
- Debt service fund
Correct answer: General fund
The general fund accounts for most of a government agency's core operating revenues and expenditures not assigned to other funds.
Question 2: A parks department wants to evaluate whether a new aquatic center should be funded as an enterprise fund. What is the key characteristic of an enterprise fund?
- It relies entirely on tax revenue
- It is intended to be self-supporting through user fees (Correct answer)
- It is managed by a nonprofit board
- It can only fund capital projects
Correct answer: It is intended to be self-supporting through user fees
Enterprise funds are used for government activities that operate like businesses, recovering costs primarily through user charges.
Question 3: Which document formally authorizes a parks agency to collect revenues and make expenditures for a fiscal year?
- Strategic plan
- Comprehensive plan
- Appropriations ordinance or budget resolution (Correct answer)
- Annual report
Correct answer: Appropriations ordinance or budget resolution
An appropriations ordinance or budget resolution is the legal authorization that allows a government agency to spend money and collect revenues.
Question 4: What is the purpose of a cost-benefit analysis when evaluating a new park facility?
- To determine staff salary ranges
- To compare total expected benefits against total expected costs over the project's life (Correct answer)
- To set the facility's fee schedule
- To assign maintenance responsibilities
Correct answer: To compare total expected benefits against total expected costs over the project's life
Cost-benefit analysis weighs all anticipated costs against quantified benefits to determine whether a project provides sufficient return on investment.
Question 5: A recreation supervisor is preparing a program budget. Which budget format organizes spending around specific programs rather than line items?
- Zero-based budget
- Program budget (Correct answer)
- Object-of-expenditure budget
- Performance budget
Correct answer: Program budget
A program budget groups expenditures by specific programs or services, allowing managers to evaluate the full cost of delivering each program.
Question 6: Which internal control practice best reduces the risk of fraud in cash-handling operations at a recreation center?
- Having one staff member manage all cash transactions
- Segregating duties so no single employee controls all cash functions (Correct answer)
- Storing all cash in an unlocked drawer for quick access
- Allowing supervisors to approve their own transactions
Correct answer: Segregating duties so no single employee controls all cash functions
Segregation of duties prevents fraud by ensuring no single employee can initiate, record, and reconcile cash transactions without oversight.
Question 7: What is a 'fund balance' in governmental accounting?
- The total amount of outstanding bonds
- The difference between a fund's assets and liabilities at year-end (Correct answer)
- The agency's total annual revenue
- The amount allocated to capital improvements
Correct answer: The difference between a fund's assets and liabilities at year-end
Fund balance represents the residual net position of a governmental fund, calculated as assets minus liabilities at the end of the fiscal year.
CPRP Administration and Finance 4
Which type of fund is most commonly used by park and recreation agencies to account for general operating activities?