NRPA NRPA Financial Management & Budgeting 1 — Questions and Answers
Question 1: What type of budget allocates resources based on the specific activities and programs a parks department will deliver?
- Program-based budget (Correct answer)
- Line-item budget
- Zero-based budget
- Capital budget
Correct answer: Program-based budget
A program-based budget organizes expenditures around specific programs and services rather than simply listing expense categories.
Question 2: Which financial document provides a summary of revenues, expenditures, and net position for a parks and recreation agency?
- Statement of net position (Correct answer)
- Cash flow statement
- Revenue forecast
- Fund balance report
Correct answer: Statement of net position
The statement of net position (balance sheet) summarizes all assets, liabilities, and net position at a specific point in time.
Question 3: What is a cost recovery ratio in parks and recreation finance?
- The percentage of program costs covered by earned revenues (Correct answer)
- The ratio of capital to operating expenses
- The proportion of budget funded by taxes
- The share of overhead costs allocated to programs
Correct answer: The percentage of program costs covered by earned revenues
Cost recovery ratio measures how much of a program's direct costs are offset by fees and other earned revenues.
Question 4: Which funding source is typically used in parks agencies to finance major infrastructure improvements like new facilities or renovations?
- Capital improvement plan (CIP) funds (Correct answer)
- General operating fund
- Petty cash reserves
- Grant administration funds
Correct answer: Capital improvement plan (CIP) funds
Capital improvement plan funds are specifically designated for large, long-term infrastructure investments rather than day-to-day operations.
Question 5: What is the purpose of a parks and recreation agency conducting a fee benchmarking study?
- To compare program fees with those of comparable agencies in the region (Correct answer)
- To determine total annual revenue projections
- To calculate staff-to-participant ratios
- To evaluate grant eligibility criteria
Correct answer: To compare program fees with those of comparable agencies in the region
Fee benchmarking allows agencies to set competitive and equitable fees by comparing their rates with similar organizations.
Question 6: In government accounting, what is a 'fund' as used by parks and recreation departments?
- A self-balancing set of accounts used to track specific activities or purposes (Correct answer)
- The total annual budget appropriation
- A restricted donation from a private source
- A reserve account for emergency expenses
Correct answer: A self-balancing set of accounts used to track specific activities or purposes
In governmental accounting, a fund is a fiscal and accounting entity with a self-balancing set of accounts used to record activities for specific purposes.
NRPA NRPA Financial Management & Budgeting 1
What type of budget allocates resources based on the specific activities and programs a parks department will deliver?