CPRP Administration & Finance 4 — Questions and Answers
Question 1: A park agency receives a federal grant requiring a 25% local match. If the grant award is $200,000, the required local contribution is:
- $25,000
- $50,000
- $66,667 (Correct answer)
- $75,000
Correct answer: $66,667
A 25% local match means the agency must contribute 25% of the total project cost; if $200,000 is 75% of the total, the local share is $200,000 × (25/75) = $66,667.
Question 2: Which internal control procedure best prevents fraudulent disbursements in a parks agency?
- Monthly bank reconciliations
- Separation of duties between authorization, custody, and recordkeeping (Correct answer)
- Annual external audits
- Electronic fund transfers only
Correct answer: Separation of duties between authorization, custody, and recordkeeping
Separating duties so no single employee controls all steps of a transaction is the most effective deterrent to fraudulent disbursements.
Question 3: A parks director is preparing a cost-benefit analysis for a new recreation center. Which costs should be included as indirect costs?
- Instructor salaries and program supplies
- Administrative overhead, utilities, and depreciation (Correct answer)
- Registration software licensing fees
- Marketing and advertising expenses
Correct answer: Administrative overhead, utilities, and depreciation
Indirect costs are those not directly tied to delivering a specific program, such as shared administrative overhead, building utilities, and asset depreciation.
Question 4: The Governmental Accounting Standards Board (GASB) requires park agencies to report pension liabilities because:
- It improves credit ratings
- It provides a complete picture of long-term financial obligations (Correct answer)
- Federal law mandates it for all public agencies
- It simplifies payroll accounting
Correct answer: It provides a complete picture of long-term financial obligations
GASB 68 requires reporting the net pension liability on government-wide financial statements to fully disclose long-term obligations to employees.
Question 5: Which document formally authorizes a parks agency to collect revenues and make expenditures for a fiscal year?
- Strategic plan
- Appropriations ordinance or resolution (Correct answer)
- Comprehensive annual financial report
- Capital improvement plan
Correct answer: Appropriations ordinance or resolution
An appropriations ordinance or resolution passed by the governing board is the legal authorization for the agency to spend money and collect revenues.
Question 6: A parks agency wants to reduce dependency on tax revenues. Which alternative financing strategy involves private investment in exchange for naming rights?
- Tax increment financing
- Corporate sponsorship and partnership (Correct answer)
- Benefit assessment districts
- Revenue bond issuance
Correct answer: Corporate sponsorship and partnership
Corporate sponsorships exchange facility naming rights, signage, or promotional opportunities for private funding contributions.
Question 7: When evaluating a capital project's financial feasibility, a net present value (NPV) of positive $150,000 indicates:
- The project will cost $150,000 more than budgeted
- The project is expected to generate value exceeding its cost in today's dollars (Correct answer)
- The project has a payback period of 150,000 days
- Annual revenues will exceed costs by $150,000
Correct answer: The project is expected to generate value exceeding its cost in today's dollars
A positive NPV means the present value of future cash flows exceeds the initial investment, indicating the project creates financial value.
CPRP Administration & Finance 4
A park agency receives a federal grant requiring a 25% local match.
If the grant award is $200,000, the required local contribution is: