SLLA School Finance and Resource Management 2 — Questions and Answers
Question 1: What is the primary role of an internal auditor in a school district?
- To set the annual operating budget
- To review financial transactions for compliance and accuracy (Correct answer)
- To approve all expenditures over a set threshold
- To manage payroll processing for all staff
Correct answer: To review financial transactions for compliance and accuracy
Internal auditors review financial operations to ensure compliance with regulations, accuracy of financial records, and proper use of public funds.
Question 2: Title I funds under ESSA are primarily targeted to serve which student population?
- Students identified as gifted and talented
- English language learners exclusively
- Students from low-income families in high-poverty schools (Correct answer)
- Students with documented disabilities only
Correct answer: Students from low-income families in high-poverty schools
Title I funds target schools with high concentrations of students from low-income families to close achievement gaps and support academic success.
Question 3: What does 'fiscal year' typically refer to in public school budgeting?
- The calendar year from January 1 to December 31
- A 12-month financial period that may differ from the calendar year (Correct answer)
- The academic year running from September to June
- A quarterly financial reporting period
Correct answer: A 12-month financial period that may differ from the calendar year
A fiscal year is any 12-month budgeting period; many school districts operate on a July 1–June 30 fiscal year, not the calendar year.
Question 4: A school's budget shows a 'structural deficit.' What does this indicate?
- The school building has critical deferred maintenance funding gaps
- Recurring expenditures consistently exceed recurring revenues (Correct answer)
- The school has borrowed funds beyond allowable limits
- Capital improvement reserves are fully depleted
Correct answer: Recurring expenditures consistently exceed recurring revenues
A structural deficit occurs when ongoing operational expenses consistently exceed stable revenue sources, indicating a long-term financial imbalance.
Question 5: What is the function of a 'budget amendment' in school finance?
- To formally approve the initial annual budget
- To officially modify an adopted budget during the fiscal year (Correct answer)
- To audit all expenditures at the end of the fiscal year
- To submit a request for additional state emergency funding
Correct answer: To officially modify an adopted budget during the fiscal year
A budget amendment is the official process to revise an approved budget to reflect changed circumstances, unexpected expenses, or shifting priorities during the year.
Question 6: Under Generally Accepted Accounting Principles (GAAP), governmental school entities typically use which basis of accounting?
- Cash basis accounting
- Full accrual basis accounting
- Modified accrual basis accounting (Correct answer)
- Single-entry bookkeeping basis
Correct answer: Modified accrual basis accounting
Governmental entities including school districts use modified accrual accounting, recognizing revenues when measurable and available, and expenditures when incurred.
Question 7: Which principle in school finance requires that expenditures be supported by proper documentation and authorization?
- Internal controls principle (Correct answer)
- Equity principle
- Adequacy principle
- Fungibility principle
Correct answer: Internal controls principle
Internal controls are procedures and policies that ensure financial transactions are properly authorized, recorded, and documented to prevent fraud and error.
SLLA School Finance and Resource Management 2
What is the primary role of an internal auditor in a school district?