CPWM Budget and Finance 5

Question 1

A public works agency is developing a five-year Capital Improvement Plan (CIP). Which factor should receive the HIGHEST priority when ranking projects?

Accepted Answer

Projects addressing critical safety, regulatory compliance, or infrastructure failure risks

Answer

Projects that are aesthetically appealing to residents

Answer

Projects with the lowest construction cost

Answer

Projects requested most recently by elected officials

Question 2

What is the purpose of a budget appropriation transfer?

Accepted Answer

To move spending authority between line items or funds within an approved budget

Answer

To increase the total budget authority for a department

Answer

To carry unspent funds forward to the next fiscal year

Answer

To reappropriate lapsed grant funds

Question 3

Which ratio measures a utility's ability to pay its annual debt service from operating revenues?

Accepted Answer

Debt service coverage ratio

Answer

Current ratio

Answer

Quick ratio

Answer

Return on assets

Question 4

Under generally accepted governmental auditing standards (GAGAS), a performance audit of a public works program primarily evaluates:

Accepted Answer

The economy, efficiency, and effectiveness of program operations

Answer

Whether financial statements are free from material misstatement

Answer

Compliance with tax code provisions

Answer

The internal control structure of the finance department

Question 5

A public works department is evaluating whether to contract out snow removal or perform it in-house. What type of analysis should guide this decision?

Accepted Answer

Make-or-buy (insource vs. outsource) cost-benefit analysis

Answer

Trend analysis

Answer

Break-even analysis only

Answer

Bond feasibility study

Question 6

When a government's fiscal year ends and unspent appropriations lapse, what happens to those funds?

Accepted Answer

They revert to the fund balance or general fund and are no longer available for the original purpose

Answer

They automatically carry forward to the new fiscal year for the same purpose

Answer

They are transferred to the capital projects fund

Answer

They are held in escrow for two years before lapsing

Question 7

Which element is typically NOT included in a public works department's operating budget?

Accepted Answer

Land acquisition for a new maintenance facility

Answer

Personnel services and benefits

Answer

Supplies and materials

Answer

Contractual services