The Starting point for budget preparation is looking at
the prior year’s budge
Some communities operate on a bottom line philosophy which permits departments to shift funds
as long as the total budget is not exceeded
Personnel costs account for 80% of the total police budget
Of that, 25% are fringe benefits
Employees should be encouraged to submit budget suggestions to
their immediate supervisor
The federal government fiscal year starts in
October
Process by which financial information about an agency is recorded, summarized, classified, and communicated/interpreted to vested/interested parties is known as
accounting
Tough decisions are often necessary in budgeting, not all factors can be measured in dollars, and all budget items require justification.
These are all true statements.
Top common cost problems include
absenteeism, paperwork, and turnover
Variance budget analysis involves looking at what has been budgeted and what has already been spent
and tells you how much you have left over
Cut back budgeting reducing costs is referred to as
doing more with less, budget reduction, and reduction in expenditures
Formula grants or Block Grants are distributed on the basis of
population and crime rates
Fixed Costs do not vary in total during a period regardless of services provided
True or false
True
The budgeting process begins with
1) the department’s goals
2) objectives
3) work plans
Budgeting system where dollars are allocated based on productivity are
performance based budgets
Budgeting is a _____ _____ and a ______ ____
continuous process
written commitment
The leading federal funding agency for all law enforcement is the
Department of Justice
Zero based budgeting
must have a justification for all expenditures
The budget is divided into two classes of expenditures:
Fixed and Variable
Operating costs that cannot be easily assigned to a particular department when transactions occur and recorded are ______ _____.
indirect costs
All levels police budget approach means that
all levels of personnel are involved in the process
Operating expenses of the department exclusive of personnel costs are _________.
overhead
The 12 month accounting period is also known as the ______ year.
fiscal
A list of probable expenses in a given period is known as a
budget
Costs that arise out of normal activities of the agency are ________ _______.
operating costs
A budget is a working document that is to be used not to be
cast in stone or held in reverence
Reducing costs is the responsibility of
every employee
Preparing budgets are difficult because
most law enforcement services are intangible
Salaries and benefits are considered
direct expenses
An agencies calendar year and fiscal year may be different
True or false
True
Rent and insurance are considered _____ costs
fixed
All employees should contribute ideas related to budget items as specific needs arise.
True or false
True
Budgets prepared using a logical process beginning with the lowest levels of the department and working upward will be more accurate and complete
True or false
True
Line item budgeting was initiated in the early 1900’s and is still widely used today
True or false
True
Chiefs should develop a mindset that sees budgeting as a year round process, not just a task that occurs once per year
True or false
True
Most budget items are short term and are applicable to current year activities
True or false
True
Use of volunteers is declining in law enforcement departments across the country
True or false
False
A CPA is an accountant licensed by the state to do public accounting
True or false
True
A cash fund of limited amount used for small expenditures when not practical to write checks is called
petty cash
The first step in cost solving is to identify
waste areas
A formula grant is also called a _____ grant
block
A modern version of the program budgeting system that breaks down costs by activity is known as ______ _______ _______.
activity based costing
Rules of accounting used by agencies in reporting the financial activities are called
GAAP
A capital budget is for _____ _____ _____.
big ticket items
Operating costs that can be identified with specific individual departments are
direct expenses
Variance reports should be made know directly to everyone who ______ or _______ influences the costs
directly or indirectly
Bottom line budget philosophy allows for the spending of all monies as long as you do not exceed the bottom line
True or false
True
Budgets are not infallible because variances will always arise
True or false
True
Cut back budgeting requires
using the same revenues to provide more services
Program budgeting requires much paperwork and is
perceived by managers as unproductive
Personnel costs are 80% of police budgets, ____ of which are fringe benefits
25%
Financial and discretionary budgets are two types of budgets
True or false
True
Most important obligation by the government to the citizens is to
protect lives and property
Using the team concept departments can cut costs and make improvements at the same time by using an
employee suggestion program
Quartermaster systems help officers maintain uniforms
True or false
True
Variance budget analysis involves the difference between ______ _____ and the ______ ______.
actual costs and the amount budgeted
Departments have begun charging for traditional services including DUI arrests
True or false
True
Performance budgeting is when dollars are allocated based on _________ .
productivity
Most budget items are short term for the current budget year
True or false
True
According to text the asset forfeiture program is not designed to create property used in illegal activities
True or false
True
Budget is divided into two classes of expenses:
fixed and variable
Supplemental appropriation should be applied for if you are to
exceed your budget
Another approach to savings costs for agencies is the effort to “Go Green”
True or false
True
Contingency funds (aka discretionary budget) are set aside for _________ ________ but the precise total of allowable expenditures is difficult to ascertain.
unforeseen emergencies
Budgets can be done by anybody in the police department if assigned so by the Chief (all-levels approach)
True or false
True
Common costs are costs that are directly traceable to a segment of an agency such as a particular division
True or false
(FALSE – They are not directly traceable).
Salaries and benefits are considered _______ _______. Overtime is a ______ _______.
direct expenses
variable cost
Short term expenses are easier to plan for than long term expenses
True or false
True
The main clearing house for federal grants is www.grants.gov which allocates billions of dollars in grants. (Grants are difficult to write as there are no templates or easy fill in the blank forms provided).
True or false
