Municipal Budgeting and Finance Practices, Exams of Nursing

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ANSWERED AND GRADED A+

True or False: Due from State of NJ for Sr. Citizen deduction can be anticipated as a revenue in the current fund budget as non-cash surplus. - Answer True--Need approval from DLGS for non-cash surplus. Trust Assessment fund cash is first pledged to: - Answer 1. Retirement of serial bonds 2. general capital 3. general taxpayers Municipal Library is paid on a __________________ Basis - Answer Quarterly Basis True or False: Budget transfer from the Capital Improvement Fund are not permitted

• Answer True: Capital Improvement is outside CAP can't transfer out or in Corrective Action Plan Consists of: - Answer 1. Finding/Conditions 2. Recommendations 3. Explanation 4. Corrective Action 5. Implementation Date When must the Corrective Action Plan must be completed? - Answer 60 days from receipt of the audit report Who mails out Local Assessment BIlls - Answer Tax Collector In Clark Tax Assessor does Who has oversight of PERS and PFRS - Answer NJ Dept. of Treasury Developer escrows with monthly charges over $1,000 CFO is required to: - Answer Provide an accounting statement to the developer on a monthly basis One tax point is equal to: - Answer One tenth-thousandth of the valuation (move decmil over 4 decimil places) Local Finance Board can intervene when - Answer 1. Default on bonds 2. Tax collection rate than 70% 3. Cash deficit of the tax levy in excess of 4% for 2 consecutive years True or False: Resident requesting to inspect vouchers that were approved for payment at the most recent meeting. Inspection of vouchers must be made available for inspection immediately - Answer True Financial Disclosure forms if - Answer Income greater 2000; gifts greater than $400; Property within the state of NJ True or False: The supplemental debt statement is filed by/with the 1st and 2nd reading of the bond ordinance - Answer False: Prior to the introduction of the Bond Ordinance. True or False: 3 different bond ordinances are introduced at 1 public meeting only one supplemental debt settlement required - Answer True

ANSWERED AND GRADED A+

True or False: The anticipated revenue for receipts from delinquent taxes is limited to the amount of revenue realized in the previous year. - Answer False: It is based on sheet 26 True or false: ADD is due upon intro of a bond ordinance - Answer False: the Suppl. debt Statement is due upon intro of bond ordinance True or false: federal single audit is required if federal grant expenditures equal or greater than 750,000 - Answer True True or false: cash management plan can be amended any time - Answer True Net debt=_______-__________ - Answer Gross debt-deductions=net debt Liquidity is security that can be converted into - Answer Cash Chairperson of the Local Finance Bd. - Answer Director of DLGS Old Escrow accounts escheat to - Answer state as unclaimed property True or false: interest on utility assessment debt is appropriate in the current fund - Answer False: raised in the utility operating fund 2/3rds majority vote is required for which of the following - Answer C. Budget transfers True or false: in regard to use of pc cards, under no circumstances may a transaction exceed 15% of municipalities bid threshold - Answer False True or false: pursuant to budget law , municipalities are permitted to overspend a legal line item appropriation if the overall current fund budget remains in a surplus position - Answer False When a municipality that carries statutory excess in reserve for an animal control fund at year end, what happens - Answer Excess is due to current fund and recorded as MRNA True or False: director approves budget - Answer False True or false: the unexpended balance of debt svc must be cancelled by resolution and no bids were submitted. - Answer False True or false: an emergency note can be issued in anticipation of the collection of taxes in a fiscal year - Answer Flase: TANs are not emergency notes True or false: capital budget must be adopted by a majority of the governing body - Answer No less than 2/3 of the full governing body

ANSWERED AND GRADED A+

True or False: municipalities are permitted to negotiate with a vendor after 2 attempts, responses to bids were too high - Answer True True or False: if trust assessment fund cash is less than the required budgeted amount to retire debt svc, a required appropriation in the CF budget is necessary to cover the deficit - Answer True the number of miles of roads paved in terms of expenditure would be an example of which type of budgeting - Answer Performance based budgeting Maturity schedule for bonds does not have to be included in a bond ordinance - Answer True (multiple choice question on the exam know contents of bond law) Budget appropriation transfers during the last 2 months of year requires what voite: - Answer 2/3 of full membership True or False: DLGS approval does not need to be included in specs for banking services - Answer True: this is a multiple choice question on test Prepaid taxes does not create a deferred charge: - Answer True: this is a multiple choice question on test Best practices which foes on municipal website? A. Past 3 years of adopted budget B. Current Year proposed budget and most recent financial statements and audits C. All of the above - Answer All of the above Equalized valuation represents: - Answer the true value of all taxable property in the municipality True or False: Derivatives are NOT a permissible investment - Answer True Budget transfers during the last 2 months may not be made to: - Answer Deferred charges, RUT, Down Payment on improvements, and CIF Period of usefulness can never exceed: - Answer 40 years (minimum 5 years) Borrowing capacity is based on: - Answer Net Debt True or False: Patrol cars are bondable assets: - Answer False: But Patrol SUVS are bondable Local government bonds may be sold privately, except when the total of bonds is greater than$_________ - Answer 1,000, Eligible Shared Services Include" - Answer Joint collection of taxes, joint municipal court, joint solid waste collection/disposal, and health services

ANSWERED AND GRADED A+

True or False: DLGS must approve Petty Cash, Change in title and text, dedicated by rider, Emergency Appropriations in excess of 3% of operating appropriations - Answer True True or False: Dedicated by rider must be accounted for in the current fund - Answer False--Trust True or False: Special Improvement District Budgets must be approved by the governing body - Answer True True or False: The budget message does not need to contain an explanation of appropriation, levy caps, and a listing of appropriation split by CAP - Answer False: (this is a multiple choice question on Test) Correct procedure to adopt budget: - Answer 1. Intro and Approval

2. Publish advertisement, Public hearing, Amendments (if amendment advertising/public hearing)
3. Adoption If a municipality does not have an ethics board: - Answer Local finance board would act as ethics board What is the official budget required to be adopted? - Answer Line item budget True or False: Payment of utility assessment bond principal is recorded as an expenditure in the utility assessment trust fund - Answer True Which is NOT a proper way to distribute a tax overpayment? - Answer Apply to the amount to be raised by taxation. True or False: Town administrator can be enrolled in defined contribution retirement plan (DCRAP) as opposed to PERS? - Answer True 2010 CAP eliminated the add-on increases for the RUT Transitional Aid must demonstrate that user fees have been established for_________ _____ so that taxpayers are not subsidizing____ ____. - Answer Discretionary Services Non- Essential Programs True or False: unexpended bond proceeds may not be appropriated to fund additional capital improvement projects with a shorter useful life. - Answer True True or False: Storm recovery reserve can be used for salt and sand purchases, snow removal, and salaries and wages - Answer True The local assessment receivable for each parcel of property falls on the: - Answer Tax Collector

ANSWERED AND GRADED A+

True or False: Dedication by rider added to a municipality's budget must be accounted for in the current fund as opposed to the trust fund - Answer False True or False: Capital Budget must be adopted by the majority of the governing body present - Answer False (same as budget vote, Capital Budget is approved with the budget not on its own) True or False: The summary of notice of a bond sale may not be advertised electronically - Answer True True or False: Cancellation of a improvement authorization funded completely from the CIF may be returned to the fund balance account - Answer False Trust Assessment cash is first pledged to: - Answer The retirement of bonds and notes In what fund is gross utility debt reflected in? - Answer Water Capital Method of accounting for transactions - Answer Modified Accrual Basis When recording the budget entry to set up budget appropriations are: - Answer credit True or False: 3 lowest bidders security must be returned within 60 days - Answer False What may unexpended bond proceeds not be appropriated for? - Answer To fund additional capital improvement projects with a shorter useful life. A dedication by rider can be made to budget based upon: - Answer The amount of revenue could not be reasonably estimated in advance Regulations concerning fiscal controls are estimated in: - Answer NJAC 5: Vote required to pass bond ordinance: - Answer 2/3 full membership of gov body Vote required for budget transfer: - Answer 2/3 membership of gov body appropriation CAP percentage - Answer 2.5% or index rate, whichever is higher. 3.5% if resolution passed by gov body When if first BAN payment due? - Answer Due the 3rd anniversary date Formula for first BAN payment? - Answer principle/(useful life*2) - Latest BAN's can mature by: - Answer 1st day, 5th month, following the closed of the 10th year Bond Ordinance Vote: - Answer 2/3 vote of members of the governing body

ANSWERED AND GRADED A+

Minimum deposit required by bidders to participate in bond sale: - Answer 2% Tax Levy Cap - Answer 2% (exclusions include: Capital, Debt, & Statutory) Appropriation CAP - Answer 2.5% or Cost of Living adjustment, whichever less. 3.5% if pass ordinance Contingent Expense Maximum - Answer 3% Limit for emergency appropriation of the total current and utility budget appropriations: - Answer 3% Municipal Debt Limit - Answer 3.5% Capitalized, non-deductible debt for a municipal public utility in deficit (20xs rule) - Answer 5% Temporary Appropriations - Answer 26.25% Percentage in excess of bid threshold, may sell its personal property not needed for public for public use, at public sale, to the highest bidder - Answer 15% How many days for advertising for bids? - Answer 10 days/60 days for solid waste The public hearing for the municipal budget cannot be held less than how many days after introduction and approval of the budget? - Answer 28 days How many days public notice is required for the public hearing on an amendment to the approved budget> - Answer 3 days At the end of the second budget year, any remaining uncommitted appropriations reserves are? - Answer lapsed and returned to the fund balance through journal entries The flexible chart of accounts is a coding system which categorizes? - Answer Budget appropriations and revenues GASB (Government Accounting and FInancial Reporting) Statement 45 requires local governing bodies to disclose: - Answer the liability and cost of post retirement health benefits The lower the estimated tax collection rate the - Answer higher the reserved for uncollected taxes Tax maps, revaluations, codifications, and master plans may be authorized and financed over 5 years by: - Answer special emergency appropriations

ANSWERED AND GRADED A+

Upon adoption of a capital ordinance, the ordinance does not take effect until" - Answer 20 days after publication in the official newspaper Bond Ordinances must be published how many days prior to the public hearing: - Answer 10 days The period during which a capital ordinance is not in effect is called - Answer the estoppel period Contracts must be awared to the lowest responsible bidder, or all bids rejected, by resolution of the governing body: - Answer 60 days of the receipt of bids The corrective action plan must be received by the DLGS - Answer 60 days Budget hearing must be advertised how many days prior and after? - Answer 10 days/28 days How many days does governing body have to review audit report? - Answer 30 days from receipt of audit The method of accounting for recording transactions which is used by NJ municipalities is called: - Answer Modified Accrual Basis Which account is debited to record the budget: - Answer Amt to be raised on taxation (multiple choice question on exam) A financial disclosure statement needs to be processed within _______ days of being hired: - Answer 30 days What actions can be taken when have tax overpayment: - Answer -Apply to Rcv or refund How many credits are required for CFO: - Answer every 2 years 30 credits--2 must be in ethics T or F: An increase in the collection rate means a decrease in the RUT? - Answer True Law that authorizes depositories? - Answer GUDPA T or F: Does the bidding law permit receiving bids on Mondays and after holidays? - Answer No mondays or after holidays Do you need an ordinance to establish pay to play? - Answer Yes What are considered material events? - Answer On Exam answer all the above Cash received in prior year do you need directors approval? - Answer Yes

ANSWERED AND GRADED A+

If the municipality funds an Improvement Authorization but then cancel a part of it where does the money go? - Answer Goes back to Capital Improvement Fund When does the Internal Report of Contribution Report need to be done ("IROC") - Answer 10 days at end of quarter Interest on Investments in Capital Fund where do record interest? - Answer Capital Fund Where will the municipality file the adopted budget? - Answer DLGS and County Tax Board within 15 days following adoption of budget Name an account that will not be closed at year end? - Answer Prepaid Taxes Which situation creates greatest increase to fund balance: - Answer Lapse of RSV/MRNA (Depends on amount) Where will utility trust and utility principle be? - Answer Utility Operating Accouting True or False: Bonds must be sold by public sale either thru a formal sealed bid process or electronic auction? - Answer True An appropriation required by statute to cover the cash flow requirements of the school, county and municipal obligations: - Answer The Reserve for Uncollected Taxes The difference between amount of appropriations for the budget year and the anticipated revenues is the: - Answer Amount to be Raised for Taxation The appropriations for Pension and Social Security in a municipal budget are reffered to as: - Answer Statutory Expenditures The four major revenue categories are: - Answer Surplus, Misc Rev, State Aid, Public and Private Grants, Delinq. Taxes, and current taxes An over expenditure of appropriation and prior year bill are known as what type of appropriation in a municipal budget? - Answer Deferred charge Is Overtime part of pensionable salary? - Answer No What is the pay to play threshold - Answer 17500 DCRAP Pention Plan: - Answer 3% Certain Positions by Law-Mayor fixed hours of work fewer than 32 hours per week who aren't eligible for PERS but are eligible for Defined Contrib. Retirement Program (DCRAP) $5,000 threshold

ANSWERED AND GRADED A+

What are the qualifications to receive transitional aid? - Answer 40A: 40A: 40A: 40A: 40:A12 - Answer Bond; Budget;Fiscal Affairs; Public Contracts Law; Public Land and Buildings Law For a given budget year, when are the budget transfers permitted between appropriation reserves: - Answer During the first three months of the succeeding year What are the two primary functions that constitute a municipal budget: - Answer Establish appropriations necessary to meet expenditures and authority to tax to provide revenue The certification of new construction or improvements by the local tax assessor, and the amount of local taxes what would have been generated, would increase the: - Answer The CAP Base Number days minimum, prior to adoption, budget must be made available for inspection - Answer 7 Number of days after DLGS certifies approval budget gov may adopt budget - Answer 10 When a municipality that carries statutory excess in reserve for animal control fund at year end, what happens to excess - Answer excess is due to current fund and recorded as MRNA What are additions made to the budget after adoption? - Answer Chapter 159 Amendments Unexpended funds in a capital ordinance may be: - Answer Cancelled to capital surplus In which budget must a deficit in a municipal utility be raised: - Answer Current Fund DLGS supervises municipalities under the Fiscal Supervision Act, which occurs when: - Answer A default exists in the payment of bonded obligations; payments are due to state, county, or school districts for more than 2 years; a cash deficit amount to more than 4% of the total tax levy; current tax collections fall below 70% for 2 successive years True or False: A municipality cannot adopt a COLA ordinance if its budget cap referendum fails - Answer True

ANSWERED AND GRADED A+

True or False: Application fees collected by a municipality for the services of the public defender are deposited into Current Fund. - Answer False: Trust Fund True or False: Any appropriation of fund balance from an authority or utility to the local governmental unit may not exceed 5% of the annual costs of operation of the appropriation or utility. - Answer True True or False: Utility budgets are subject to the appropriations cap: - Answer False- They are funded by user fees True or False: Municipal Revenues may not normally be anticipated above the amount collected in the previous year for each type of revenue - Answer True Are health benefits costs are calculated net of employee message? - Answer Yes What should be contained in the budget message: - Answer 1. Explanation of appropriations and levy caps

2. a listing of appropriations split by cap If a municipality doesn't have an ethics board, who acts as the ethics board? - Answer Local Finance Board True or False: Transitional Aid must demonstrate that user fees have been established for discretionary services so that taxpayers are not subsidizing nonessential programs. - Answer True: User fees must cover new programs not taxpayers How many certified copies of the temporary budget must be filed with the DLGS? - Answer none The minimum amount which shall be annually appropriated and raised by taxes for free public libraries is a sum equal to? - Answer 1/3 mil on every dollar of assessable property within the municipality on the equalized valuation The governing body may raise an appropriate funds to any fire district or volunteer fire company up to: - Answer 150,000 (per each volunteer fire company) With regard to First Aid Organization, the CFO Must: - Answer Receive an audit performed by a CPA or RMA, when contribution exceeds $35, A fire district may appropriate surplus to a municipal budget? - Answer no Contributions to LOSAP programs are considered pension costs? - Answer True Municipalities are required to collect solid waste from apartment complexes if the same service is provided to other residential units within the municipality - Answer True

ANSWERED AND GRADED A+

True or False: A municipality who has recived transitional aid may participate in the municipal self examination of its budget in the next budget cycle: - Answer False True or False: Municipalities with a tax collection rate of 89.7% may participate in the municipal local budget examination process - Answer False: must be 90% or better Current Appropriations include: - Answer Operating expenses. S&W, debt service, statutory expenses, deferred charges, and reserve for uncollected taxes Current Revenues include: - Answer property taxes, misc revenues, and fund balance Than annual financial statement must be filed by _________ to _________ no later than _______________ - Answer CFO; DLGS; Feb 10th The Annual audit is required by the Local Fiscal Affairs Law _____days after the close of the fiscal year? - Answer 180 The _______performs the annual aduit - Answer RMA The unemployment compensation law establishes the following financing methods: - Answer Benefit reimbursement mehtod and contribution method A municipality experiencing cash flow problems may issue - Answer Tax Anticipation Notes The budget summary publication must cite: - Answer Number of person employed in the previous year budget and estimate of the number of employees from the current year; the municipal property tax levy for the previous year and estimate for current year; the total amount to be raised by taxation and the total revenues from other sources in the current budget; and the total appropriations for the previous and current year budgets Why is a copy of the adopted budget sent to the COunty Board of Taxation? - Answer To certify the municipal tax rate Unused tax levy cap amounts may be banked for how many years? - Answer 3 years A service transfer from Anytown, NJ to another local governmental unit or utility results in a ______ to the transferring units cap base? - Answer Decrease A service transfer from another local government unit or utility to Anytown, NJ resilts in a _____ to Anytowns cap base: - Answer Increase In local government, the Annual Financial Statement provides: - Answer An unaudited report of the results of the prior years financial operations

ANSWERED AND GRADED A+

Monies transferred to a municipality by board of trustees of a municipal free public library may be anticipated in the municipal budget for the purpose of: - Answer reducing the amount to be raised by taxation in the municipal budget True or False: The anticipated revenue for receipts from delinquent taxes is limited to the amount of revenue realized in the previous year. - Answer False: It comes from the AFS Sheet 26, has nothing to do with the revenue from prior year Debt service must be divided into what 2 categories: - Answer principal and interest Municipalities seeking to exceed their debt limit must apply to who? - Answer Local Finance Board How are over expenditures of appropriations required to be raised? - Answer In full, subject to the CAP Municipalities must establish a dedicated by rider trust account for the payment of off duty police detail: - Answer True Municipal authority and utility finances must be: - Answer Self-liquidating and funded by user fees The division of Local Government Services requires the adoption of a capital budget where the cumulative cost of such items will exceed: - Answer $25,000 with a useful life of at least 5 years Emergency appropriations must be adopted by which vote: - Answer No less than 2/3 of full governing body Resolutions authorizing the transfer of appropriations required what vote of the full membership of the governing body: - Answer 2/3 full membership True or False: The local finance board may grant property tax waivers? - Answer False--voters refereundum True or False: Municipalities may establish a dedicated tax for historic purposes upon the approval of the voters: - Answer True--Open Space Tax True or False: Governmental units must account for accumulated absence time annually in the User Friendly Budget document - Answer True No amendment of the budget can become effective without a public hearing and publication of the amendment, if the amendment: - Answer Adds a new item of appropriation in an amount in excess of 1% of total appropriations in approved budget Increases the amount to be raised by taxation by more than 5% unless the same is made to include an emergency appropriation Increases or decreases any items of appropriations by more than 10%

ANSWERED AND GRADED A+

What are the exceptions to the Tax Levy Cap: - Answer Health Benefits Limit; increases in debt svc; true emergencies; and pension costs What are the exceptions to the Appropriation Cap: - Answer Debt svc; Rsv for uncollected taxes, shared services, and pensions A proper listing of detail of prior years bill in the current budget would be: - Answer Jones Service, Inc., 2009 Equipment SUpplied, $ TANS must mature no later than - Answer 120 days of the succeeding fiscal year Who oversees the PERS & PFRS? - Answer NJ State Treasury Does a maturity schedule for bonds need to be included in a bond ordinance? - Answer NO True or False: the unexpended balance of debt service must be cancelled by resolution - Answer false: automatically lapses Does the Director approve budget transfers? - Answer No A municipality may alter a budget appropriation which is no longer needed during its budget year with: - Answer Change om text and Title Resolution True or False: TANS may affect the credit rating of the local unit - Answer True True or False: Refunding bonds require a down payment pursuant to Local Bond Law: - Answer False A tax lien sale held before the close of the budget year is known as: - Answer Accelerated Tax Sale What is the difference between assets and liabilities - Answer Fund Balance By what date must the local budget be introduced unless the date is modified by DLGS? - Answer Feb 10th What is the statutory deadline for submitting the Annual Financial Statement? - Answer Feb 10th What is the statutory deadline for submitting the Annual Debt Statement? - Answer Jan 31 True or False: Due from State of NJ for Snr Citizen Deductions can be anticipated as a revenue in the current fund budget as non-cash surplus: - Answer True--need approval from DLGS

ANSWERED AND GRADED A+

Are budget transfers from Capital Improv. Fund permitted? - Answer No The governing body of the municipality may advertise a summary of the budget if the publication contains atleast: - Answer Major sections, debt, number of persons employed, and location of where a copy is available True or Flase: BANS are considered unfunded debt - Answer True-not permanent funding like a bond True or False: If a municipality does not maintain a GL accounting system or encumbrance system for the current fund it is ineligible for local examination of its budget - Answer True True or False: A municipality may calculate the current year reserve for uncollected taxes by reducing the prior years certified tax levy by the amount of tax levy adjustment resulting from adjudicated tax appeals - Answer True True or False: The final principal payment in a muncipal bond schedule of maturity may not be more than twice the 1st payment, unless the municipality rcv approval for a non-conforming debt schedule from LFB: - Answer True Emergency purchases and contracts may be executed if the emergent condition affects which of the following - Answer Public Health, Safety, and welfare Unless cancelled by resolution of the gov body , the full balance in a line item appropriation at the end of budget year is: - Answer held in reserve How is the maximum amount of delinquent taxes that may be anticipated, determined - Answer The percentage of delinquent taxes collected in the prior year applied to the year end outstanding delinquent tax balance Transfers for surplus from a municipal utility for use as revenue in the municipalitys budget shall not exceed which percentage of annual cost of the operation of the utility - Answer 5% of the annual cost of operation of the utility True or False: Operating Expenses can be bonded - Answer False True or False: Appropriations (1998) Cap Bank is automatic and allows a municipality to bank its final appropriation subject to the cap and 3.5% indefinitely - Answer False--Bank 2 years only True or False: The recreation director may set fees for summer camp - Answer False--Governing Body approves fee schedules True or False: The monmouth county improvement authority may appropriate undesginated fund balance towards the Twp of Howell for use in budget - Answer False--No regional only ask local authority

ANSWERED AND GRADED A+

True or False: A municipality may anticipate the proceeds of the sale of municipal property when the property will be sold during the budget year - Answer False=-- proceeds of sale will go into reserve account to reduce taxation true or false: An emergency appropriation must be raised by taxation in full in the subsequent years budget - Answer true Who approves special improvement districts - Answer governing body Is the explanation of the tax rate required to be explained in the budget? - Answer No Where must the Annual Financial Statements be filed? - Answer EMMA (strongly recommended) What funds can payroll costs be found in? - Answer Current, Utility Operating, Trust Fund, and General Capital Fund Who must a municipality apply to if they decide to convert to State FIscal Year from a Calendar? Is an Ordinance or Resolution required? - Answer Local Finance Board; Ordinance What is the type of vote required to introduce, approve, amend, and adopt a municipal budget? - Answer Not less than the majority vote of the full membership of governing body If the municipality introduces their budget on Feb 6th and is going to hold a public hearing for the budget on March 6th, when is the latest they can publish? - Answer Feb 24th (10 days prior) According to Section 45 of the Local Bond Law, any municipal public utility that has cash receipts in a fiscal year sufficient to meet operation and debt charges without recourse to general taxation is considered to be: - Answer Self-liquidating True or False: LFB has the approval to create or dissolve authority - Answer True True or False: Aggregation allows for spreading or splitting costs to avoid bidding - Answer False--not permitted Is there a limit on anticipated tax receipts? - Answer Yes, included in the calculation