CPRP Administration and Finance 5 — Questions and Answers
Question 1: A parks agency receives a federal grant restricted to trail development. How should these funds be classified?
- Unrestricted revenue in the general fund
- Restricted revenue that may only be spent for the designated purpose (Correct answer)
- Discretionary revenue available for any park use
- Capital reserve revenue transferable to operating costs
Correct answer: Restricted revenue that may only be spent for the designated purpose
Grant funds with specified purposes must be accounted for as restricted revenue and expended only for the allowable uses defined by the grantor.
Question 2: Which pricing strategy sets recreation fees based on what the market will bear rather than on actual program costs?
- Cost-recovery pricing
- Market-rate pricing (Correct answer)
- Subsidy pricing
- Break-even pricing
Correct answer: Market-rate pricing
Market-rate pricing sets fees based on comparable offerings in the marketplace, which may be above or below actual program costs.
Question 3: What is the primary purpose of a comprehensive annual financial report (CAFR) for a park district?
- To market programs to new participants
- To provide a complete audited financial disclosure to stakeholders and the public (Correct answer)
- To outline the strategic plan for the next five years
- To document maintenance schedules for park facilities
Correct answer: To provide a complete audited financial disclosure to stakeholders and the public
A CAFR (now often called an Annual Comprehensive Financial Report, ACFR) provides audited financial statements and full disclosure required for governmental transparency.
Question 4: Which type of audit is conducted to assess whether an agency's programs are achieving their intended outcomes efficiently?
- Financial audit
- Performance audit (Correct answer)
- Compliance audit
- Operational review
Correct answer: Performance audit
A performance audit evaluates the effectiveness, efficiency, and economy of government programs rather than just the accuracy of financial statements.
Question 5: A park agency's long-term capital improvement plan (CIP) typically covers what time horizon?
- One fiscal year
- Three to ten years (Correct answer)
- Twenty to thirty years
- One hundred years
Correct answer: Three to ten years
Capital improvement plans typically project major infrastructure needs, costs, and funding sources over a three- to ten-year planning horizon.
Question 6: When a recreation agency contracts with a private vendor to operate a concession in a park, which agreement type is most commonly used?
- Intergovernmental agreement
- Concession agreement (Correct answer)
- Memorandum of understanding
- Lease-purchase agreement
Correct answer: Concession agreement
A concession agreement grants a private party the right to operate a commercial activity within a public park under specified terms and revenue-sharing arrangements.
Question 7: Which concept describes the practice of setting aside funds annually to replace major assets at the end of their useful life?
- Amortization scheduling
- Capital replacement reserve funding (Correct answer)
- Encumbrance accounting
- Deferred revenue recognition
Correct answer: Capital replacement reserve funding
Capital replacement reserves are funds accumulated over time to pay for major asset replacements, avoiding large unplanned expenditures when assets wear out.
CPRP Administration and Finance 5
A parks agency receives a federal grant restricted to trail development.
How should these funds be classified?