CPRP Administration & Finance 3

Question 1

Which budgeting approach requires managers to justify every expenditure from zero each budget cycle?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting starts from a base of zero and requires each program to justify all expenses, rather than using prior year figures as a starting point.

Question 2

A park agency's debt service coverage ratio is 1.2. What does this indicate?

Accepted Answer

Revenue exceeds debt service payments by 20%

Answer

A coverage ratio of 1.2 means revenues are 120% of debt service requirements, indicating a 20% cushion above the minimum needed.

Question 3

Which fund type is used by park agencies to account for revenues restricted for specific purposes such as park dedication fees?

Accepted Answer

Special revenue fund

Answer

Special revenue funds account for revenues that are legally restricted or committed to expenditures for specific purposes other than debt service or capital projects.

Question 4

An agency is considering outsourcing its golf course operations. The most critical financial analysis to perform is:

Accepted Answer

Make-or-buy cost comparison

Answer

A make-or-buy analysis compares the full cost of providing the service in-house versus contracting it out to determine the most economical option.

Question 5

Under the Americans with Disabilities Act, capital improvement funds must prioritize:

Accepted Answer

Transition plan barrier removal before other capital improvements

Answer

ADA transition plans require agencies to systematically remove barriers, and this obligation should guide capital funding prioritization.

CPRP - Certified Park and Recreation Professional Practice Test

CPRP - Certified Park and Recreation Professional Practice Test

CPRP Administration & Finance 3