CGFM Exam 1 with complete solutions

Federalism - ANSWER-Power is distributed among different levels of government, no one level has complete authority Sovereignty - ANSWER-National government cant be sued by states or citizens without its permission ...

Federalism - ANSWER-Power is distributed among different levels of government, no one level has complete authority Sovereignty - ANSWER-National government cant be sued by states or citizens without its permission Popular Sovereignty - ANSWER-Citizens hold ultimate authority through the ballot; even a sovereign government is accountable to citizens Primary Purpose of Government - ANSWER-Provide services to its citizens 10th Amendment - ANSWER-Aka - reserved Clause National government cant dictate the manner in which state and local programs should operate Why are state and local governments called labratories of democracy? - ANSWER-They experiment with policies and procedures that are later adopted at the national level (upward influence) At the state level, the legislative branch is sometimes referred to as? - ANSWER-General Assembly Cities, towns & villages are ________________ governments - ANSWER-Municipal What is the type of municipal government with two branches: executive (mayor), and legislative (council) - ANSWER-Mayor-Council form The form of municipal government where the executive and legislative branches are combined into the authority of commissioners - ANSWER-Commission form Type of municipal government where council members embody the legislative branch & a manager serves at discretion of the council- not the voters - ANSWER-Council Manager Form The first 10 amendments are known as ______________ - ANSWER-The Bill of RIghts How many articles are in the Constitution? - ANSWER-Seven No one branch of government can exercise complete control over another - ANSWER-Separation of Powers Under _________________, courts can overturn laws if deemed unconstitional - ANSWER-Judicial Review Since each house may pass a different version of a bill, differences are reconciled in ___________________ - ANSWER-Conference Committees Congress may override the presidents veto with a _______________ vote in BOTH houses - ANSWER-Two-Thirds The 3 branches of government can further be divided into ____________________ - ANSWER-Components Which branch has the most components - ANSWER-Executive Many government components take the form of ________________, either permanent of temporary - ANSWER-Commissions The local government equivalent of a constitution - ANSWER-Charter Put the following in order per hierarchy of government authorities: Laws, Executive Orders, Constitution, Rules & Regulations - ANSWER-Constitution, Laws, Executive Orders, Rules & Regulations Which decision is most likely to be made during the "programming phase" a- broad goals of government b- whether to lease space of construct a new building c- how to respond to an audit report d- appropriate accounting methods - ANSWER-B - Make or buy done decisions done during programming phase Which is not a typical output of programming phase? a- most cost effective means to acheive objectives b- specific, measurable objectives c- level of resources requested d- reprogramming requests - ANSWER-D - reprogramming requests Typically, which type of budget will be in effect the longest? a-operations b- cash flow c- capital - ANSWER-C- Capital What is the purpose of forecasting in regards to the budget? - ANSWER-To determine the likely level of economic activity & economic trends and how they will impact revenue & expenses What publication of the national government provides an effective guide to internal controls & may be applied at all levels of government - ANSWER-Standards for Internal Control in the federal government (GAO) Which of the following is least supported through financial accounting? a- information about expenses and inter-governmental transfers b- info about fund levels & disbursements c-info about deposits and earmarked receipts d- info about achievement of program outcomes - ANSWER-D - this requires non-financial information Which entity provides detailed instructions for completing performance & accountability reports at the federal level? a- AGA b- OMB c- GASB d- FASAB - ANSWER-B- OM 3 types of accounting - ANSWER-Financial, Managerial, Budgetary Type of accounting that tracks affects of financial events on the financial position of an entity - ANSWER-Financial Type of accounting that tracks commitments, obligations & expenditures by purpose, time and amount - ANSWER-Budgetary Type of accounting used to gauge the cost effectiveness of operations to improve efficiency - ANSWER-Managerial (cost accounting) Phase of management cycle used to communicate accomplishments & resources expended - ANSWER-Reporting What entity defines GAAP for state/local governments - ANSWER-Governmental Accounting Standards Board (GASB) What entity defines GAAP for national government - ANSWER-Federal Accounting Standards Advisory Board (FASAB) Reports with condensed financial information in easy to read format - ANSWER-Popular, Summary and/or Citizen Report Reports that link financial resources to the service outputs & outcomes achieved with those resources - ANSWER-Performance Reports AGA recommended report to communicate the business of government to the public - ANSWER-Citizen Centric Report (CCR) At the federal level, performance reporting is ______________ - ANSWER-Required Report that combines financial data & performance measures - ANSWER-Performance & Accountability Report (PAR) What act calls for the establishment of government wide financial data standards - ANSWER-Data Transperancy & Accountability Act (DATA) 3 differences between internal & external reports - ANSWER-timing - internal prepared as needed purpose - internal help officials make decision to improve operations structure- internal take any form useful to management What entity establishes standards for financial audits, generally? - ANSWER-American Institute of Certified Public Accountants (AICPA) Citizen action that requires legislative action to be presented to voters for approval - ANSWER-Referendum What are three tools used by the federal reserve to moderate the supply and cost of money? - ANSWER-1- buying and selling government bonds 2-altering amount of reserves that other banks keep at the federal reserve 3- changing the interest rate at which it loans funds to other institutions What are the fiscal and monetary powers of governments, there are 4 - ANSWER-Tax citizens and corporate entities Establish budgets and spend public funds Borrow funds for government operations and capital investments Create money (only at national level) Which of the following statements is NOT true A- members of a tribal council must generally pay state income tax on money earned in tribal lands B- members of a tribal council must generally pay federal income tax, though some exemptions apply C- a tribal council may levy and collect taxes in activities conducted in tribal (reservation) land D- tribal lands are exempt from local real estate taxes - ANSWER-A What is the difference between local charters and local ordinances - ANSWER-Charters are the basic authority to operate, like a constitution. Ordinance is a local law, like a state statute or US code Describe the distinction between policy and administration - ANSWER-Executive branch components implement policies when they administer programs. Legislative branch develops policies that establish/guide programs Citizen action that enables voters to remove elected officials from office - ANSWER-Recall Type of government entity that performs multiple functions - ANSWER-General purpose Type of government entity that performs just one or two functions - ANSWER-Special purpose What are the two types of special purpose local governments - ANSWER-School district Special district What are the 3 types of general purpose local governments? - ANSWER-County Municipality (cities/towns) Township (historical) Type of government entity that blends characteristics of government and not-for-profit organizations - ANSWER-Quasi-Governmental (government corporations) Who issues the yellow book - ANSWER-Government Accountability Office (GAO) Another term for Generally Accepted Government Auditing Standards (GAGAS) - ANSWER-Yellow Book 3 types of external audits - ANSWER-Financial Attestation Engagements Performance Audits Type of external audit that provides reasonable assurance on whether financial statements are presented fairly in conformity with GAAP - ANSWER-Financial Audit What is an attestation engagement? - ANSWER-Examine, review, or perform agreed-upon procedures on a limited subject matter & report on the results, can be financial or non-financial Principle that taxes should treat taxpayers fairly - ANSWER-Tax equity Different taxpayers with the same income level should pay the same amount of tax - ANSWER-horitzontal equity Taxpayers with different income levels should pay different amounts of tax - ANSWER-vertical equity US Federal Income Taxes are progress or regressive? - ANSWER-Progressive - those with higher incomes pay a higher proportion of their taxable income due to a higher tax rate Sales tax is progressive/regressive? - ANSWER-Regressive - single sales tax rate applies to everyone "Benefit Received" in tax policy decisions - ANSWER-Deciding to establish new tax or raise existing taxes Also, deciding whether a specific group should bear a specific tax burden Collection efficiency in tax policy - ANSWER-Cost of collecting the tax Should be minimal compared to the revenue generated How governments accomplish social goals with taxes (4) - ANSWER-Exemptions Deductions Credits Deferrals Exceptions to tax laws and regulations are called ____________ - ANSWER-Tax Expenditures (homeowners deduct interest, encourages home ownership) Tax levied for a specific purpose & proceeds are deposited into an account restricted to that purpose - ANSWER-Dedicated Tax (earmarked or restricted) Income Taxes are Progressive/Regressive - ANSWER-Progressive Are payroll taxes classified as income taxes? (social security, medicare) - ANSWER-No, they are proportional to income & regressive Term when state & local governments adjust taxes for state and local factors - ANSWER-Piggyback What is the most direct impact of having a bond issue insured by a 3rd party organization? a- government can issue a larger amount of LT Debt b- government can issue debt at a lower interest rate c- government can extend the maturity period of the debt issue beyond 30 years d- debt issuance guarantees that they interest payments will be tax-free for the investor - ANSWER-B - issue at a lower interest rate Ultimately government officials are accountable to ______________ - ANSWER-Citizens 3 advantages of income tax - ANSWER-- less costly to administer - compliance levels are high - respond to general economic conditions T/F - donations are always voluntary - ANSWER-False - valuables are left by travelers Which branch is accountable for authorizing & funding programs & subsequent over site? - ANSWER-Legislative