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60 Cards in this Set
- Front
- Back
5 types of Expenditures
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1-Purchases
2-Transfer Payments 3-Debt Transfers 4-Tort Liabilities 5-Tax expenditures and Credits |
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What are the two types of authority for spending?
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1-Ability to act often through enabling legislation
2-Ability to spend through appropriations |
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What is Allocation?
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Lease common expenditure authority--lump sum authority where the administrator decides how to allocate the funds.
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What is Apportionment?
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The distribution of expenditure authority for a specific time period.
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What is Allotment?
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The most common expenditure authority--communicate most of authority directly to subordinates.
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Obligation spending?
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it is legally binding to the responsibity to pay
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Commitment spending?
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Contracts, entitlement notices, etc....sometimes irrevocable
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What are the 5 forms of payment in public sector?
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1-Petty Cash
2-Reimbursements 3-Directly from an account 4-Budget transfers 5-From an unrestricted account. |
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What must be considered when purchasing?
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1-What to buy (need)
2-Is it authoriezed in the budget 3-Written standards (specifications) |
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What are the two types of management for purchasing?
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Decentralized and Centralized
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Does decentralized purchasing have written standards?
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Less likely then centralized.
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Are decentralized purchasing decisions linked to budget or accounting systems?
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Not necessarily
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Which purchasing system is cheaper and more often used by public organizations?
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Decentralized
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What is the main drawback to decentralized purchasing systems?
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Quality and integrity control of goods and services are often lacking.
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Who is responsible for purchasing in centralized systems?
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A single person or department specializing in purchasing.
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Who is drafts policies and oversees function in centralized systems?
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Policy Board or group
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What is the main drawback of a centralized purchasing system?
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Often Slower
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What are the two types of interest?
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Simple and Compound
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What is simple interest?
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Interest paid only on the principal amount
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What is compound interest?
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Interest paid on both the principal and interest
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What three factors do you need to look to when analyzing cash flow?
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Source, Amount & Date
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What is the formula for calculating the time value of money?
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FV=PV(1+r)^n
Futer value= Present Value times one plus the rate raised to the number of periods |
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What are the 4 concerns with investments?
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1-Risk
2-Liquidity 3-Yield 4-Size of Investment |
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What are the 3 types Risk?
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1-Default Risk
2-Market Risk 3-Liquidity Risk |
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What is Default Risk?
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Probability that the issuer will be unable to redeem the investment
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What is Market Risk?
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Possibility of loss from choosing a relatively poor investment from all available investments
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What is Liquidity Risk?
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Occurs when invested money cannot be collected immediately even though the money is safe
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What does risk do to the rate?
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High Risk=High Rate
Low Risk=Low Rate |
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What is Liquidity?
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Ability to readily convert to cash
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What is Yield?
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The rate of return above the initial investment
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How can the size of investment be defined?
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Larger investments generally are associated with higher return, fewer transaction costs.
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What are the 3 types of investments?
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1-Debt
2-Equity 3-Money Market/Mutual Fund |
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What is Capital BUdgeting?
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A plan for the funding, acquisition, and development of public land, improvements, equipment, and facilities for use in the immediate, intermediate, and long-term future.
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What are the two ways to finance Capital Budgeting?
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Pay-as-you-go and Pay-as-you-use
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What is Pay-as-you-go?
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raise all the money and pay as you go
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What is Pay as you use?
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Go into debt have those who use the facility pay fees to pay off the building.
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What is Debt?
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Debt is an outstanding obligation to the government.
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What is a deficit?
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expenditures that are greater than revenues
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What are the 4 types of obligation?
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1- General
2- Limited Liability 3- Moral 4- No Obligation |
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What is General Obligation?
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You have it you pay it even if it means raising taxes
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What is Limited Liability Obligation?
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Use Specific fees to pay for the debt
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What is Moral Obligation?
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Moral Obligation when there is no formal pledge but you put your name on it and if you don't pay your credit goes really low
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What is Risk Management?
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A systematic organized effort to eliminate or reduce harm to persons and the threat of losses to public organizations
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What 4 factors should be considered when evaluating risks?
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1-Frequency and Severity
2-what costs are associated 3-what can the organization do to reduce the risk and how much will it cost? 4-Is it worth the cost to reduce the risk? |
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What are some examples of risks?
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Liability, personnel, property loss, vehicular operation
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What are some ways to minimize risks?
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Insure, eliminate risk, transfer legal responibility
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What are some examples of overhead costs
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Unemployment insurance, workers comp, cost of personnel department
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What is an overhead cost?
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the cost that employors must paya on their employees
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What is Managerial Efficiency?
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Ratio of outputs to inputs
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What is Economic Efficiency?
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if it is not possibly to change the state and have someone better off and no one worse off
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What is Effectiveness?
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measure of attainment (comparing observed output to planned output)
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What is Productivity?
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Amount of output per input
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What are the two types of Audits?
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Internal and External
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What is an Internal Audit?
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audit done by a department or person who is part of the organization
-quick -done for management or planning |
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What is an External Audit?
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Done by people that are outside of the organization
-mainly financial audits -used by most local governments |
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Audit Focus: Financial?
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Assess the fairness and reliability of finances
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Audit Focus: Compliance?
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Laws and regulations are followed
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Audit Focus: Economy/Efficiency?
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resource use
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Audit Focus: Performance/Program Results
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achievement relative to goals
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What are the 3 main roles of government?
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1-Distribution
2-Stablilization 3-Allocation |