Northwestern E-07 Study Guide

  1. What are the three reasons why we budget?
    • Mission
    • Goals
    • Objectives
  2. A ___________ is a list of probable/estimated expenses and income during a given period, most often one year.
  3. A ___________ _________ is a plan or schedule adjusting expenses during a certain period to the estimated income for that period.
    Financial budget
  4. Match the Role of the branch of government to the budget process:

    a. Executive
    b. Legislative
    c. Judicial

    1. Settles disputes
    2. Makes laws,levies taxes, authorizes spending
    3. Proposes and spends the budget
    • A = 3
    • B = 2
    • C = 1
  5. 5. The phases of the budget cycle are:

    A. Allocation, obligation, expenditure, audit B. Execution, allocation, preparation, audit
    C. Preparation, approval. execution, audit
    D. Approval, preparation, execution, audit.
    C. Preparation, approval, execution, audit
  6. Budgeting is a ______________ annual process resulting in a written commitment.
  7. In summary, a budget is a critical document for ________, ________
    and ________.
    • Operations
    • Planning
    • Administration
  8. Personnel services, Operating expenses and Capital Expenses are the three major parts of the _____________ ________________.
    Operating budget
  9. The ______________ _____________ deals with expenses needed to run the department.
    Operating Budget
  10. Operating expenses exclusive of personnel is considered as ________________.
  11. The _______________ budget sets aside funds for special needs that arise (emergencies, special events, and unanticipated expenses).
  12. Budgets are a law enforcement agency’s work plan translated into ________.
  13. ___________ ______ budget is when funds may be expended up to the total amount approved regardless of category.
    Bottom Line
  14. _________________ is the process by which financial information about an agency is recorded, classified, summarized, interpreted and communicated to managers.
  15. _________ _____ the 12-month accounting period used by an agency.
    Fiscal year
  16. ____________ _______ ________________ is a person licensed by a state to do public accounting.
    Certified Public Accountant – CPA
  17. ________ _____ _____ is a cash fund of a limited amount used to make small expenditures.
    Petty cash fund
  18. Encumbrance- Committed during the current year for ______________ future expenditure for a specific line item.
  19. Obligation- Cash liability. Money ________ to vendors for products and or services provided.
  20. GAAP stands for ____________ ____________ ______________ ____________. The rules of accounting used by agencies (State & Local Governments) in reporting their financial activities.
    Generally accepted accounting principles
  21. Reducing _________ is all employees’ responsibility.
  22. Match the term with the definition:

    A. A gift of money from one entity to another Revenue
    B. Money collected from any source
    C. A loan to a government to be paid back w/ interest

    1. Taxes
    2. Bonds
    3. Grant
    • A = 3
    • B = 1
    • C = 2
  23. Preparing police budgets is difficult because most law enforcement services are ___________________.
  24. Employees should submit their ideas relating to budget items to their most ________________ ________________.
    Immediate supervisor
  25. Budget preparation should be a ____-___________ project.
  26. The _________ _____________ is the most important document to the police administrator in developing the budget
    Budget manual
  27. The _________ _____________contains all the needed information and ground rules for completing the budget.
    Budget manual
  28. ___________ ____________ ________ are used to justify major discretionary purchases, new line-items or activities or significant increases in a line-item or activity.
    Budget justification forms
  29. True or False – Audits are submitted to a higher authority.
  30. _________ _________________ means providing the same or more services with less funding, or budget reduction resulting from reduced expenditure spending.
    Cutback budgeting
  31. Which of the following is not a cause of cutbacks?

    D. embezzlement
  32. True or False - Reducing costs is every employee’s responsibility.
  33. The lead federal funding agency for law enforcement programs is ________Office of Justice Programs
    DOJ’s – Department of Justice
  34. The _________ is the primary funding arm for law enforcement agencies.
    BJA – Bureau of Justice Assistance
  35. The availability of grants is advertised in the _________ _____________ and _____________.
    Federal register and www.Grants.Gov
  36. Six components of effective grant writing are:
    • 1. A statement of need
    • 2. How this need can be met
    • 3. Who will accomplish the tasks
    • 4. What time line will be followed
    • 5. What the cost will be
    • 6. When you may look for approval to proceed
  37. The focus of _____-______ budgeting is to control and limit spending to line items by object code.
  38. The _________ _______________ system looks at work as programs.
    Program Budgeting
  39. ____-___________ budgeting system assumes NOTHING is getting funded, requires justification of all expenditures, not only those that exceeded the prior year’s allocations.
  40. True or False – Performance Based Budgets:
    Focus on Efficiency and Productivity and has performance measures.
  41. ________-_____ budgets are usually based on the preceding year’s budget and a comparison between it and actual expenses
  42. True or False - Program Budgeting System (PBS) identifies the various programs an agency provides and allocates funds for each.
  43. True or False - Zero Based Budgeting (ZBB) begins with a clean slate, justifying each expenditure anew
  44. Activity Based Costing (ABC) is the modern version of program based budgeting and breaks down costs by _______.
  45. Discretionary budgets are for ____________ needs that arise.
  46. What percentage of the average total police budget is for personnel?
  47. True or False – Bottom Line Budgeting allows for funds to be expended up to the total amount approved regardless of category.
  48. True or False - A basic starting point for budget preparation is the previous year’s budget.
  49. The Federal Government’s fiscal year starts in:

    C. October
  50. True or False – Absenteeism and turnover are common cost problems.
  51. True or False – Variance Analysis consists of comparing actual costs against what was budgeted and analyzing differences
  52. A formula or ________ grant is awarded to states or localities based on population and crime rates.
  53. True or False – Variable costs do not vary in total even though the amount of service provided is more or less than anticipated.
    False – this is a definition of fixed costs
  54. The top common cost problems are ___________, __________ and ___________.
    • Absenteeism
    • Turnover
    • Paperwork
  55. The budgeting system where dollars are allocated based on productivity is called _______________ _______ ________________.
    Performance based budgeting
  56. The two classes of expenditures are __________ and _______________.
    Fixed and variable
  57. Of the total amount budgeted for salaries and benefits, what percentage is allocated for fringe benefits?
  58. Operating costs that cannot be easily assigned to a particular department are ___________ expenses.
  59. __________ budgeting means providing the same or more services with less funding.
  60. A 12 month accounting period is also known as ________ ______.
    Fiscal year
  61. True or False – Salaries and benefits are considered direct expenses?
  62. Rent and insurance are considered ___________ costs.
  63. True or False – Line item budgeting was initiated in the 1900’s and is widely used today.
  64. True or False – The first step in solving cost problems is to identify waste.
  65. A modern version of the program budgeting system that breaks down costs by activity is called __________ ____________ _______________.
    Activity Based Costing
  66. A list of major and minor object codes in a budget is a _______ __ ____.
    Chart of Accounts
  67. ______________ can suggest ways to cut costs through an employee cost improvement suggestion program
Card Set
Northwestern E-07 Study Guide
Northwestern E-07 Study Guide