CPRP Administration & Finance 2 — Questions and Answers
Question 1: Which financial statement shows a park agency's revenues and expenditures over a specific time period?
- Balance sheet
- Statement of net position
- Statement of revenues, expenditures, and changes in fund balance (Correct answer)
- Cash flow statement
Correct answer: Statement of revenues, expenditures, and changes in fund balance
The statement of revenues, expenditures, and changes in fund balance reports inflows and outflows during an accounting period for governmental funds.
Question 2: A parks department wants to fund a new aquatic center through bonds repaid by user fees. This is best structured as:
- General obligation bond
- Revenue bond (Correct answer)
- Tax increment financing bond
- Municipal lease
Correct answer: Revenue bond
Revenue bonds are repaid from the income generated by the specific facility or project they finance, making them ideal when user fees will cover debt service.
Question 3: Under GASB standards, park and recreation agencies must report infrastructure assets using which approach?
- Replacement cost method
- Modified approach or depreciation (Correct answer)
- Historical cost only
- Fair market value
Correct answer: Modified approach or depreciation
GASB allows agencies to either depreciate infrastructure assets or use the modified approach, which requires maintaining the assets at a set condition level.
Question 4: A supervisor notices staff overtime costs are 40% over budget mid-year. The most appropriate immediate action is to:
- Request a budget amendment
- Reduce program offerings to eliminate overtime
- Analyze the variance and implement corrective staffing measures (Correct answer)
- Transfer funds from capital accounts
Correct answer: Analyze the variance and implement corrective staffing measures
Identifying the cause of variance and adjusting staffing is the first step before considering budget amendments or program cuts.
Question 5: Which procurement method requires a park agency to select a vendor based on both technical qualifications and price?
- Invitation for Bids (IFB)
- Request for Qualifications (RFQ)
- Request for Proposals (RFP) (Correct answer)
- Sole source procurement
Correct answer: Request for Proposals (RFP)
An RFP evaluates both the technical approach/qualifications and cost, unlike an IFB which awards solely on lowest price.
Question 6: The primary purpose of an internal audit function in a parks agency is to:
- Prepare annual financial statements
- Ensure compliance with laws and evaluate internal controls (Correct answer)
- Collect delinquent fees
- Approve capital expenditures
Correct answer: Ensure compliance with laws and evaluate internal controls
Internal audits assess the effectiveness of internal controls and verify compliance with regulations and policies.
Question 7: A parks district uses a cost allocation plan to charge overhead to programs. This practice is primarily done to:
- Reduce total agency spending
- Ensure programs reflect their true full cost (Correct answer)
- Satisfy bond covenant requirements
- Simplify the budget process
Correct answer: Ensure programs reflect their true full cost
Cost allocation distributes indirect costs (administration, utilities, maintenance) to programs so pricing and subsidy decisions reflect full cost of service.
CPRP Administration & Finance 2
Which financial statement shows a park agency's revenues and expenditures over a specific time period?