SLLA School Finance and Resource Management 1 — Questions and Answers
Question 1: What is the primary purpose of zero-based budgeting in schools?
- To use the previous year's budget as a starting point
- To justify all expenditures from a zero base each budget cycle (Correct answer)
- To allocate funds equally across all departments
- To eliminate all discretionary spending
Correct answer: To justify all expenditures from a zero base each budget cycle
Zero-based budgeting requires administrators to justify every expense from scratch each cycle rather than incrementally building on prior budgets.
Question 2: Which federal law primarily governs the allocation of federal education funds to states under the Every Student Succeeds Act?
- Elementary and Secondary Education Act (ESEA) (Correct answer)
- Americans with Disabilities Act (ADA)
- Family Educational Rights and Privacy Act (FERPA)
- Individuals with Disabilities Education Act (IDEA)
Correct answer: Elementary and Secondary Education Act (ESEA)
ESEA, reauthorized as ESSA, is the primary federal law establishing how federal education funds are allocated to states for K-12 programs.
Question 3: In school finance, what does the term 'encumbrance' refer to?
- Funds already spent and recorded as expenditures
- Funds reserved for anticipated future expenditures (Correct answer)
- Funds transferred between budget accounts
- Funds returned to the general fund at year-end
Correct answer: Funds reserved for anticipated future expenditures
An encumbrance is a reservation of funds for a future expenditure, typically created when a purchase order is issued but not yet paid.
Question 4: Which type of school fund is used to cover day-to-day operational expenses such as salaries and utilities?
- Capital projects fund
- Debt service fund
- General fund (Correct answer)
- Special revenue fund
Correct answer: General fund
The general fund covers regular, recurring operational expenses including salaries, benefits, utilities, and instructional supplies.
Question 5: A principal needs to purchase technology equipment totaling $50,000. Which procurement process is most appropriate?
- Petty cash disbursement
- Competitive bidding (Correct answer)
- Direct vendor payment without quotes
- Emergency purchase order
Correct answer: Competitive bidding
Competitive bidding ensures transparency and best value for large purchases by requiring multiple vendor proposals, protecting public funds.
Question 6: Which budget approach allocates school resources proportionally based on the number of students enrolled?
- Program-based budgeting
- Incremental budgeting
- Site-based management budgeting
- Per-pupil allocation budgeting (Correct answer)
Correct answer: Per-pupil allocation budgeting
Per-pupil allocation distributes resources proportionally based on student enrollment, promoting equity across schools in a district.
Question 7: What does 'carryover' mean in school budgeting?
- Transferring unspent funds from one fiscal year to the next (Correct answer)
- Accounting for overspending in a budget line item
- Creating a reserve for emergency expenses
- Reallocating unused categorical grant funds mid-year
Correct answer: Transferring unspent funds from one fiscal year to the next
Carryover allows unspent funds from one fiscal year to remain available in the next fiscal year, subject to state and local board policies.
SLLA School Finance and Resource Management 1
What is the primary purpose of zero-based budgeting in schools?