Cgfm Part Ii- Chapter 1 General Knowledge

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AS GOVERNMENTS CONTINUE TO PROGRESS AND BECOME MORE SOPHISTICATED, PRESSURES FOR PROFESSIONAL MGMT WILL CONTINUE TO INCREASE. RESOURCES ARE SHRINKING AND THE DEMAND FOR SERVICES CONTINUES TO ESCALATE. GOVERNMENT ENTITIES MUST:

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RESPOND WITH IMPROVEMENTS TO THE EFFICIENT DELIVERY OF EFFECTIVE SERVICES

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WHAT IS THE DIFFERENCE BETWEEN THE BUDGET FOR THE GOVERNMENT AND THE BUDGET FOR THE PRIVATE SECTOR?

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* GOVERNMENTS ARE LEGALLY BOUND BY THE BUDGET AND USE THEM TO MEASURE ACCOUNTABILITY
* PRIVATE SECTOR USES THE BUDGET AS A BENCHMARK OF PERFORMANCE, GOALS OF GROWTH, OR MGMT TOOL FOR PLANNING, AND AS A GUIDE OF OPERATIONS

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WHERE DOES THE MAJORITY OF FUNDING OF MOST GOVERNMENTS COME FROM?

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TAXES

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ESTABLISHES SPENDING AUTHORIZATIONS, OUTLINES PROGRAMS AND SERVICES TO BE PROVIDED, AND DEFINES THE SOURCES OF REVENUES THAT WILL BE USED TO FUND THEM. IT MAY SPECIFY RESTRICTIONS ON THE USE OF RESOURCES

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BUDGET

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WHAT IS THE PRIMARY CONTROL DEVICE IN GOVERNMENT?

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THE BUDGET PROCESS

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WHAT IS THE PRIMARY MECHANISM BY WHICH PUBLIC OFFICIALS ARE ABLE TO DEMONSTRATE ACCOUNTABILITY?

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FINANCIAL REPORTING

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IN GOVERNMENT, WHAT IS THE CORNERSTONE OF FINANCIAL REPORTING?

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ACCOUNTABILITY

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GOVERNMENT ACCOUNTABILITY IS BASED ON THE BELIEF THAT...
1)
2)
3)

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1) THE GOVERNMENT HAS A RESPONSIBILITY TO REPORT
2) THE PUBLIC HAS A RIGHT TO KNOW
3) THE ULTIMATE POWER BELONGS TO THE PEOPLE

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PEOPLE CAN EXERCISE THEIR POWER THROUGH?

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BALLOT BOX, INITIATIVE, & REFERANDUMS

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PLAYS A MAJOR ROLE IN FULFILLING GOVERNMENT'S DUTY TO BE ACCOUNTABLE

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FINANCIAL REPORTING

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GOVERNMENTS DERIVE THEIR REVENUES IN LARGE PARTY FROM:

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INVOLUNTARY RESOURCE PROVIDERS- THE TAXPAYERS!
* TAX ASSESSMENTS
* LICENSES
* FEES
* PERMITS
* USER FEES
NOT FROM THE PAYER'S WILLINGNESS TO PARTICIPATE IN THE TRANSACTION

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IN GOVERNMENT, WHAT ARE THE FOUR TYPES OF ACCOUNTABILITY?

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1) LEGAL ACCOUNTABILITY- COMPLYING WITH LAWS, RULES, AND REGULATIONS

2) PERFORMANCE ACCOUNTABILITY- GOVT ACTS IN AN EFFICIENT, EFFECTIVE MANNER

3) FISCAL ACCOUNTABILITY- RAISING AND ALLOCATION OF RESOURCES TO ACCOMPLISH OBJECTIVES

4) OPERATIONAL ACCOUNTABILITY- STEWARDSHIP OF PUBLIC RESOURCES

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THE EXECUTIVE BRANCH IS ACCOUNTABLE TO THE _____________ BRANCH AND THE PUBLIC

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LEGISLATIVE BRANCH

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WHICH BRANCH IS ACCOUNTABLE TO THE PUBLIC FOR OPERATING IN AN EFFECTIVE AND EFFICIENT MANNER, AND FOR COLLECTING AND USING RESOURCES?

ACCOUNTABLE TO THE LEGISLATIVE BRANCH FOR USING RESOURCES IN ACCORDANCE WITH LEGISLATIVE MANDATES WITHIN FISCAL CONSTRAINTS IMPOSED BY THE LEGISLATIVE BRANCH?

ACCOUNTABLE TO OTHER GOVTS USING RESOURCES IN ACCORDANCE WITH GRANT REQUIREMENTS AND RESTRICTIONS?

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EXECUTIVE BRANCH

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WHAT BRANCH IS ACCOUNTABLE TO THE PUBLIC FOR RAISING OF RESOURCES AND FOR DETERMINING HOW THOSE RESOURCES ARE TO BE USED?

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LEGISLATIVE BRANCH

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WHAT TWO BRANCHES RELY ON FINANCIAL REPORTING AS A MEANS OF DEMONSTRATING ACCOUNTABILITY?

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EXECUTIVE AND LEGISLATIVE BRANCHES

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A UNIQUE CHARACTERISTIC OF GOVERNMENTS IS THE WIDE RANGE OF USERS OF GOVERNMENTAL FINANCIAL REPORTS INCLUDING:

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* LEGISLATORS
* OVERSIGHT ORGANIZATIONS
* CITIZENS
* INVESTORS
* CREDITORS
* MEDIA
* FINANCIAL MANAGERS
* PROGRAM MANAGERS
(BROADER RANGE OF INTERESTS AND FINANCIAL KNOWLEDGE/EXPERTISE THAN THOSE OF READERS OF COMMERCIAL FINANCIAL STMTS)

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WHO ESTABLISHES THE BUDGETARY APPROPRIATIONS?

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LEGISLATIVE BODY

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THE LEGISLATIVE BODY USES FINANCIAL REPORTS TO SEE IF?

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ACTUAL EXPENDITURES WERE WITHIN THE AUTHORIZED LEVELS

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FINANCIAL REPORTING IN GOVERNMENT PROVIDES INFORMATION TO ASSIST USERS IN DOING TWO THINGS
1)
2)

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1) ASSESS ACCOUNTABILITY
2) HELP MAKE ECONOMIC, SOCIAL, AND POLITICAL DECISIONS

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WHAT IS THE PRIMARY COMMUNICATION DEVICE FOR ASSESSING ACCOUNTABILITY?

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GOVERNMENTAL FINANCIAL REPORTING

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ARE RESPONSIBLE FOR RAISING RESOURCES AND FOR DETERMINING HOW THOSE RESOURCES ARE TO BE USED?

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PUBLIC OFFICALS

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PROVIDES THE MEANS TO DETERMINE IF THE RESOURCES THAT WERE RAISED WERE SUFFICIENT TO COVER THE SERVICES PROVIDED DURING THE OPERATING PERIOD. AND SHOULD ALLOW USERS TO DETERMINE IF TAXPAYERS OF THE FUTURE ARE REQUIRED TO PAY FOR SERVICES PROVIDED IN THE CURRENT YEAR

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FINANCIAL REPORTING

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FINANCIAL REPORTS TEND TO BE OF TWO TYPES:
1)
2)

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1) POINT-IN-TIME REPORTS (STOCK REPORTS)
2) PERIOD REPORTS (FLOW REPORTS)

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A BALANCE SHEET IS AN EXAMPLE OF A ______________________ REPORT

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POINT-IN-TIME

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THE OPERATING STATEMENT AND CASH FLOW STATEMENT ARE EXAMPLES OF A __________________ REPORT

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PERIOD REPORT

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PROVIDES CURRENT INFORMATION AS OF THE DATE OF THE REPORT

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POINT-IN-TIME REPORT

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TYPE OF REPORT THAT COVERS THE ENTIRE FISCAL YEAR

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PERIOD REPORT

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CONSIST PRIMARILY OF THE AUDITED FINANCIAL STATEMENTS INCLUDING THE NOTES TO THE FINANCIAL STATEMENTS, REQUIRED SUPPLEMENTAL INFO, AND OTHER ACCOMPANYING INFO

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GENERAL PURPOSE EXTERNAL FINANCIAL REPORTS (GPEFR)

(ALSO CALLED THE BASIC OR PRINCIPAL FINANCIAL STATEMENTS)

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WHAT ARE THE SIX REPORTING CHARACTERISTICS THAT FINANCIAL REPORTS MUST HAVE TO MAKE THE INFORMATION IN THEM EFFECTIVE?

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1) UNDERSTANDABILITY
2) RELIABILITY
3) RELEVANCE
4) TIMELINESS
5) CONSISTENCY
6) COMPARABILITY

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THIS CHARACTERISTIC MEANS IT SHOULD BE EXPRESSED AS SIMPLY AS POSSIBLE AND THE REPORTS SHOULD INCLUDE EXPLANATIONS AND INTERPRETATIONS TO HELP USERS UNDERSTAND THE INFORMATION PROVIDED?

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UNDERSTANDABILITY

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THIS CHARACTERISTIC MEANS IT SHOULD BE VERIFIABLE, FREE FROM BIAS, AND FAITHFULLY REPRESENT WHAT IT PURPORTS TO REPRESENT. AND IT MEANS TO BE COMPREHENSIVE WITH NONE OF THE MATERIAL OMITTED

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RELIABILITY

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THIS CHARACTERISTIC ENCOMPASSES MANY OF THE OTHERS FOR EXAMPLE INFORMATION MUST BE TIMELY AND RELIABLE.

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RELEVANCE

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INFORMATION IS RELEVANT IF IT IS?

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CAPABLE OF MAKING A DIFFERENCE IN A USER'S ASSESSMENT OF A CONDITION, EVENT, OR PROBLEM

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THIS CHARACTERISTIC MEANS INFORMATION SHOULD BE REPORTED IN A TIME FRAME THAT ENABLES USERS TO BASE DECISIONS ON IT. MIGHT HAVE TO SACRIFICE PRECISION OR DETAIL TO MEET THIS CRITERIA

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TIMELINESS

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TRUE OR FALSE: TO BE TIMELY, PRECISION OR DETAIL MIGHT HAVE TO BE SACRAFICED

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TRUE

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TRUE OR FALSE: A TIMELY ESTIMATE IS MORE USEFUL THAN A PRECISE AMOUNT, IF THE TIME TO PRODUCE THE PRECISE AMOUNT IS OVERLY LONG

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TRUE

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THIS CHARACTERISTIC MEANS ONCE A PARTICULAR ACCOUNTING PRINCIPLE METHOD IS USED, IT IS PRESUMED THAT FUTURE INFORMATION IS REPORTED USING THE SAME METHOD OR PRINCIPLE.

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CONSISTENCY

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IF IT IS NECESSARY TO CHANGE A METHOD OR PRINCIPLE ONCE A PARTICULAR ACCOUNTING METHOD IS USED THEN....

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THE NATURE AND REASON FOR THE CHANGE MUST BE DISCLOSED AS WELL AS THE EFFECT OF THE CHANGE

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THIS CHARACTERISTIC MEANS THAT LIKE ENTITIES SHOULD REPORT THE SAME INFORMATION THE SAME WAY

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COMPARABILITY

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IS AN EFFORT BY THE FEDERAL GOVERNMENT TO CREATE A LEVEL OF OPENNESS IN GOVERNMENT. THE PHILOSOPHY IS THAT GOVERNMENT SHOULD BE TRANSPARENT, PARTICIPATORY, AND COLLABORATIVE

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FEDERAL OPEN GOVERNMENT INITIATIVE

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THE PHILOSOPHY OF THE FEDERAL OPEN GOVERNMENT INITIATIVE IS THAT GOVERNMENT SHOULD BE
1)
2)
3)

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1) TRANSPARENT
2) PARTICIPATORY
3) COLLABORATIVE

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WHAT ARE SOME OF THE AGENCIES PARTICIPATING IN THE FEDERAL OPEN GOVERNMENT INITIATIVE?

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* STATE DEPARTMENT
* JUSTICE DEPARTMENT
* HEALTH & HUMAN SERVICES
* NASA
* TREASURY
* EPA
* DEFENSE
* SOCIAL SECURITY ADMINISTRATION

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WHAT ARE A FEW OF THE OPEN GOVERNMENT INITIATIVES THAT HAVE TAKEN PLACE IN STATE AND LOCAL GOVERNMENT?

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* NEVADA- ONE-STOP WEBSITE

* MICHIGAN- "OPEN DOOR" APPROACH TO GOVT TO HOLD ELECTED OFFICIALS ACCOUNTABLE FOR DELIVERING RESULTS

* BOSTON- WEBSITE FOR KEY GOVT RECORDS

* WASHINGTON, DC- TWO OPEN GOVT INITIATIVES AIMED AT IMPROVING TRANSPARENCY, PUBLIC PARTICIPATION, AND ACCOUNTABILITY WITHING THE CITY'S GOVT