MMC Budget Administration & Financial Oversight 2

Question 1

Under GASB Statement No. 54, which fund type must a municipality use to account for resources legally restricted to expenditure for specific purposes other than debt service or capital projects?

Accepted Answer

Special Revenue Fund

Answer

GASB 54 requires Special Revenue Funds for resources that are restricted or committed to specific purposes other than debt service or capital projects.

Question 2

A municipality receives a federal grant with a performance period ending September 30 but its fiscal year ends December 31. How should the clerk ensure proper budget accountability?

Accepted Answer

Track expenditures against the grant performance period separately from the fiscal year

Answer

Grant funds must be tracked against the grantor's performance period to ensure compliance, separate from the municipality's own fiscal year-end accounting.

Question 3

Which budgetary control technique limits spending to a fixed percentage of appropriations per quarter, preventing agencies from front-loading expenditures?

Accepted Answer

Allotment system

Answer

An allotment system divides annual appropriations into periodic spending limits, controlling the rate at which funds are spent throughout the year.

Question 4

When a department head requests a budget amendment to transfer $50,000 from personnel services to equipment, who typically has final authority to approve this transfer under most municipal charters?

Accepted Answer

Governing body

Answer

Most municipal charters reserve authority for budget amendments and inter-line transfers to the governing body, the legislative branch of local government.

Question 5

A municipality's budget shows estimated revenues of $5 million and appropriations of $4.8 million. The $200,000 difference is best described as:

Accepted Answer

An unappropriated fund balance

Answer

When appropriations are less than estimated revenues, the difference is an unappropriated fund balance, which provides a buffer against revenue shortfalls.

(MMC) Master Municipal Clerk Certification Practice Test

(MMC) Master Municipal Clerk Certification Practice Test

MMC Budget Administration & Financial Oversight 2