Assignment Instructions/ Description
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Exam – Winter 2019PADM 540 – Administration of Financial ResourcesInstructions: Answer each question in detail (minimum 250 words each). Provide support for your responses (references, minimum 2 per response). Exam must be uploaded into Canvas no later than 6 pm April 23th. Late submission will not be accepted.
1) Why are internal controls important for governments and not for profit organization? Provide details on the types of internal control measures they would use.
2) Assume you are the Budget Director for your hometown and you are developing the annual budget. a) Describe at least 3 revenues governments typically have available to them. b) What methods would you use to forecast revenue and expenditures (include a minimum of 2 methods)? c) Compare and contrast the different methods discussed in 2b. d) How would you prepare for your presentation before the city council (be specific)? e) Why is the budget an important document for governments?
3) During lunch, the director of Streets made the following comment: “For the past 10 years, I have deliberately overstated my labor and equipment needs by 20 percent when preparing my budget request. I figure that the city council will cut it by 10 percent, and I can use the other 10 percent as slack. If there is money left over, I can always find a way to spend it.” Do you consider this behavior ethical? How does this impact other departments? What should the budget director do to cut down on this behavior?
4) The CAFR for governments is important document. a. What is a CAFR? What are its main components?b. What is GAAP?c. What is the purpose of GASB and what is its role with the CAFR?d. Distinguish between cash, accrual and modified accrual accounting?e. What is the definition of funds for governmental accounting?f. Why is fund balance important?
5) Lew quoted “The budget is not just a collection of numbers, but an expression of our values and aspirations”. Do you think is true? Why or why not?
6) How would you apply what you have learned in this course to your work?
7) To fulfill a campaign promise, the new mayor is looking for ways to finance an increase in the level of police protection without raising the city’s property tax rate. He reads the city’s financial report and notices that the Capital Projects Fund has a large fund balance. He discusses the fund balance with his fiancé commissioner who says: “The fund balance is high because the city voted to sell bonds last year to finance construction of a new firehouse. The architect just finished the design of the firehouse, and we are about to award a construction contract.” The mayor responds “Forget the firehouse. I promised to put more police patrols on the street. Let’s use the bond proceeds to hire more police officers.” How should the finance commissioner respond to the mayor? Is this allowable? Why or why not? What alternatives could he propose?
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