SSA School Finance & Budget Management 1 — Questions and Answers
Question 1: What is the primary purpose of a school district's general fund?
- To account for long-term capital improvement projects
- To account for the primary day-to-day operating expenses of the district (Correct answer)
- To manage federal grant funding separately from local revenue
- To track debt service payments on outstanding bonds
Correct answer: To account for the primary day-to-day operating expenses of the district
The general fund accounts for the primary operating revenues and expenditures of a school district, including instruction, administration, and support services.
Question 2: Which budget format organizes resource allocation by specific programs and their associated costs rather than solely by object codes?
- Line-item budgeting
- Zero-based budgeting
- Program-based budgeting (Correct answer)
- Incremental budgeting
Correct answer: Program-based budgeting
Program-based budgeting organizes expenditures by educational programs and activities, allowing leaders to evaluate costs and outcomes for each individual program.
Question 3: During which phase of the budget cycle is the proposed budget formally presented to the board of education for approval?
- Budget development
- Budget adoption (Correct answer)
- Budget execution
- Budget audit
Correct answer: Budget adoption
The budget adoption phase is when the proposed budget is presented to and approved by the board of education through a formal vote, giving the district legal authority to spend.
Question 4: In school district accounting, what does the term 'encumbrance' refer to?
- A penalty assessed for overspending a budget line item
- A commitment of funds for a purchase order or contract not yet paid (Correct answer)
- Revenue that has been received but not yet deposited into the fund
- A debt obligation carried forward from a prior fiscal year
Correct answer: A commitment of funds for a purchase order or contract not yet paid
An encumbrance represents a commitment of budgeted funds for obligations such as purchase orders or contracts that have been made but not yet paid.
Question 5: Which federal legislation most directly governs Title I, Part A funding allocation to schools serving high concentrations of students from low-income families?
- IDEA
- FERPA
- ESSA (Correct answer)
- ADA
Correct answer: ESSA
The Every Student Succeeds Act (ESSA) governs Title I, Part A funding, which provides supplemental resources to schools and districts serving high concentrations of economically disadvantaged students.
Question 6: Zero-based budgeting is best defined as a process in which:
- Last year's figures are used as a baseline and adjusted for inflation
- Every expenditure must be justified from a zero base each budget cycle (Correct answer)
- An equal dollar amount is allocated to every school regardless of enrollment
- All budget lines are reduced by a fixed percentage to generate savings
Correct answer: Every expenditure must be justified from a zero base each budget cycle
Zero-based budgeting requires that all expenditures be justified from the ground up each cycle, rather than using prior year allocations as a starting point.
Question 7: For most school districts in the United States, the primary local revenue source is:
- State income tax allocations
- Federal impact aid payments
- Property taxes (Correct answer)
- Local sales tax revenue
Correct answer: Property taxes
Property taxes are the primary local revenue source for the majority of U.S. school districts, which is why local property values significantly influence district funding levels.
SSA School Finance & Budget Management 1
What is the primary purpose of a school district's general fund?