Admin 200- hard test

Questions and Answers

What is the primary purpose of a financial policy?

To provide a framework for effective planning of government expenditures and revenues (correct)

To levy and authorize the expenditure of ad-valorem taxes

To ensure short-term financial gains

To allocate funds solely to public services

What is the basis of St. Johns County's annual budget preparation?

Consistency with Generally Accepted Accounting Principles (GAAP) and other standards (correct)

Cash Basis

Accrual Basis

Modified Cash Basis

What is the goal of St. Johns County's financial planning policy?

To allocate funds solely to infrastructure development

To benefit only the general taxpayer

To balance the financial burden of programs and facilities fairly between the general taxpayer and those who benefit directly (correct)

To prioritize funding for public services only

What is the primary function of a financial policy in ensuring financial stability?

To prevent financial problems from impacting policy decisions Signup and view all the answers

What is the authority granted to St. Johns County through its annual budget preparation?

The authority to levy and authorize the expenditure of ad-valorem taxes, user fees, permit fees, and other general revenue Signup and view all the answers

What is the role of a financial policy in the management of funds?

To provide guidelines for the management of funds or financial resources Signup and view all the answers

What is the primary consideration for recognizing the common good that flows from public expenditures?

The difficulty of measuring the relationship between public costs and public benefits Signup and view all the answers

What is the purpose of the mid-year report prepared by the Office of Management and Budget?

To compare actual and budgeted revenue and expenditures for all operating funds Signup and view all the answers

What is the requirement for the net budgeted revenue from ad valorem or property taxes?

95% of the reported total taxable value Signup and view all the answers

What is the purpose of the five-year plan for major capital improvement projects?

To reduce or avoid larger costs in the future Signup and view all the answers

What is the requirement for the annual audit of the County's financial records?

To be conducted timely and in accordance with State law and governmental auditing standards Signup and view all the answers

What is the purpose of the annual asset inventory?

To assess the condition of capital assets and identify the need for replacement or addition Signup and view all the answers

What is the requirement for the budget adoption process?

The budget must be adopted by the Board of County Commissioners Signup and view all the answers

What is the primary purpose of the long-range planning process?

To prepare a multi-year forecast of financial operations Signup and view all the answers

What is the requirement for year-end surpluses?

They must be retained within each specific fund for re-appropriation in the next fiscal year Signup and view all the answers

What is the purpose of the County's Office of Management and Budget?

To report significant budget variances and recommended actions to the County Administrator Signup and view all the answers

What is the main purpose of the County's debt policy?

To provide guidelines for the issuance and management of debt Signup and view all the answers

What is the primary consideration for allocating sales tax revenue?

Provisions of Florida Statute 218.65 Signup and view all the answers

What is the purpose of impact fees?

To bear a reasonable relationship to the benefits received by those who pay Signup and view all the answers

What is the County's approach to investing idle cash?

To continuously invest idle cash to provide maximum yield Signup and view all the answers

Why does the County adopt a conservative approach to budgeting certain revenue sources?

Because these revenue sources are relatively variable or unpredictable Signup and view all the answers

What is the main objective of the County's revenue diversification policy?

To improve the County's ability to withstand revenue fluctuations Signup and view all the answers

What is the primary consideration for issuing debt?

All of the above Signup and view all the answers

What is the purpose of the County's investment policy?

To provide a sufficient level of liquidity and maximum yield Signup and view all the answers

What is the County's approach to employee compensation?

To balance the stewardship of public funds with employee equity and minimize employee turnover Signup and view all the answers

What is the main purpose of the County's fees and charges policy?

To review and adjust fees and charges for services annually Signup and view all the answers

What is the primary objective of the County's policy regarding derivatives?

To hedge against future interest rate risk Signup and view all the answers

What is the legal debt limit for Florida Counties?

There is no legal debt limit Signup and view all the answers

What is the ideal minimum reserve target for the General Fund?

Two months of regular General Fund operating expenditures Signup and view all the answers

What is the purpose of the reserve for contingencies?

To protect against unforeseen cash flow shortages, emergencies and unexpected economic downturns Signup and view all the answers

What is the minimum working capital level that Enterprise Funds strive to maintain?

90 days of operating expenses including depreciation Signup and view all the answers

What is the timeframe for reaching the minimum reserve target if a fund does not meet the minimum stipulations?

Five years Signup and view all the answers

What is the basis of accounting used for Governmental Funds?

Modified accrual basis Signup and view all the answers

What is the purpose of the County's policy on providing full and fair disclosure?

To comply with Federal and State securities laws Signup and view all the answers

What is the ideal minimum reserve target for Special Revenue Funds, Transportation Trust, and Fire District?

2% of total fund revenue Signup and view all the answers

What is the requirement for progress toward meeting the minimum reserve target?

Improvement of at least 10% of the target each year Signup and view all the answers

Under which method of accounting are the two Funds accounted for?

Accrual basis of accounting Signup and view all the answers

What is the purpose of the Comprehensive Annual Financial Report (CAFR)?

To show the status of the County’s finances on the basis of GAAP Signup and view all the answers

How are capital outlay purchases shown in the budget’s Enterprise funds?

As expenditures Signup and view all the answers

What is the basis for budgets for salaries and benefits?

100% of the estimated salaries at the beginning of the fiscal year plus the scheduled pay plan increase Signup and view all the answers

What is the purpose of recovering indirect costs?

To allocate costs to specific programs Signup and view all the answers

What is the purpose of the County's purchasing policy?

To promote competition in procurement Signup and view all the answers

Under what circumstances may the County pre-pay certain expenditures?

Under necessitating circumstances, such as beach re-nourishment projects Signup and view all the answers

What is the purpose of the County's expenditure reductions?

To increase the County's efficiency and productivity Signup and view all the answers

What is the purpose of the County's budget requests review process?

To justify and closely review budget requests Signup and view all the answers

What is the basis for the County's annual appropriations?

Generally Accepted Accounting Principles (GAAP) Signup and view all the answers

What is the primary responsibility of the Office of Management and Budget in relation to appropriation changes?

To review all requests for appropriation changes and ensure necessary documents are prepared Signup and view all the answers

Who provides recommendations to update the Financial Policy as needed?

The County Administrator and the County Budget Officer Signup and view all the answers

What is the frequency of the Financial Policy review and modification?

Annual Signup and view all the answers

Through which process are the guidelines within the Financial Policy implemented?

Through the annual operating and capital budget process Signup and view all the answers

What information must be identified in the advertisement for appropriation changes?

The total amount of each budget and the budgetary fund to be amended Signup and view all the answers

What is the primary consideration for the County in determining the type of debt to be issued?

Current interest rates and market considerations Signup and view all the answers

What is the maximum period for which capital improvements can be financed through debt issuance?

30 years Signup and view all the answers

What is the primary purpose of refunding outstanding debt?

To realize cost savings Signup and view all the answers

What is the role of the outside financial advisor?

To evaluate debt management strategies Signup and view all the answers

What is the primary consideration for the County in determining the revenue sources to be pledged for debt repayment?

Legally available revenue sources Signup and view all the answers

What is the purpose of coordinating with other local government entities?

To minimize the overlapping debt burden to citizens Signup and view all the answers

What is the primary benefit of using credit enhancements?

Reducing the interest expense Signup and view all the answers

What is the primary consideration for the County in determining the type of lease to be used for major equipment acquisition?

The cost-benefit analysis Signup and view all the answers

What is the purpose of the County's debt management strategy?

To maintain a stable debt service burden Signup and view all the answers

What is the County's preferred approach to debt issuance?

Competitive bid Signup and view all the answers

What is the primary objective of the Internal Service Funds?

To break even and maintain a stable financial position Signup and view all the answers

What is the purpose of the Annual Operating Budget?

To provide a legal authorization for expenditures and financing Signup and view all the answers

At what level is budgetary control exercised?

Departmental level Signup and view all the answers

Who is responsible for the daily management of their budget?

Department heads Signup and view all the answers

What is the purpose of Section 129.06 of Florida Statutes?

To establish procedures for budget amendments Signup and view all the answers

What is the authority of the Budget Officer?

To approve internal or intra-department transfers Signup and view all the answers

What happens to a profit made by the Internal Service Funds?

It is used to lower internal service charges in the ensuing fiscal year Signup and view all the answers

How are receipts of funds not anticipated in the budget handled?

They are added to the budget within the proper fund Signup and view all the answers

What is the purpose of the public hearing required for budget amendments?

To provide a platform for citizen participation Signup and view all the answers

What is the goal of the county's efforts in relation to the Government Finance Officers Association's Award?

To qualify for the award annually Signup and view all the answers

Study Notes

Financial Policy

A financial policy is a set of guidelines for the management of funds or financial resources.
It provides for the effective planning of government expenditures, revenues, and the financing of public services.
It helps ensure that the County is financially able to meet its short-term and long-term service objectives.

Scope

The County prepares its annual budget in accordance with Chapters 129 and 200 of Florida Statutes.
The budget is prepared on a basis consistent with Generally Accepted Accounting Principles (GAAP), Governmental Accounting Standards (GAS), and the Government Finance Officers Association (GFOA) standards for the Distinguished Budget Presentation Award.

Financial Planning Policy

The County will balance the financial burden of programs and facilities as fairly as possible between the general taxpayer and those who benefit directly.
The County will recognize the common good that flows from many public expenditures, the inability of some citizens to pay the full costs of certain benefits, and the difficulty of measuring the relationship between public costs and public or private benefits of some services.

Budget Policy

The budget will be balanced upon adoption by the Board of County Commissioners.
Total revenues, including inter-fund transfers and fund balances brought forward, will equal the total of fund appropriations or expenditures and reserves.
Revenues will include a 5% statutory reduction in accordance with Chapter 129.01(2)(b) of Florida Statutes.
The County’s Office of Management and Budget will prepare a report at mid-year comparing actual and budgeted revenue and expenditures for all operating funds and their projections through year-end.

Long-Range Planning

The County will prepare a multiyear forecast of financial operations based on the service levels contemplated in the proposed budget and any probable future service level changes.
The County will analyze and project major revenues and expenditures by fund.
The County will develop a five-year plan for major capital improvement projects (CIP) and present it annually to the County Commission.

Audit

The County will ensure the conduct of a timely annual audit of its financial records in accordance with State law and governmental auditing standards.
The County will achieve an unqualified audit opinion in full compliance with Generally Accepted Accounting Principles (GAAP).

Asset Inventory

The County will annually identify and assess the condition of its capital assets.
The assessment will include an evaluation of community needs and priorities, the impact of any deferred maintenance, changes in technology, and any other significant factors.

Revenue Policy

Revenue from ad valorem or property taxes will be anticipated for purposes of the operating budget preparation using 100% of the reported total taxable value of current property assessments.
All sales tax received will be limited to the General Fund unless required for debt service.
The allocation of sales tax revenue will be in accordance with provisions of Florida Statute 218.65 and the direction of the County Commission.

Revenue Diversification

The County recognizes the value of diversity in revenue sources for funding County services.
The County will develop alternative funding sources other than property taxes.

Fees and Charges

The County Commission will review and adjust fees and charges for service and adopt them as part of the annual budget process.
Fees and charges will be charged against new development at the building permit stage.

Use of One-time Revenues

The County will use one-time or non-recurring revenues only for one-time expenditures (i.e., capital projects).

Use of Unpredictable Revenues

The County will budget unpredictable revenues more conservatively with emphasis on a safe minimum level that will most likely be generated.

Expenditure Policy

The County will seek to provide total employee compensation (pay plus employee benefits) that is competitive within its labor market.
The County will balance the stewardship of public funds with employee equity and the minimization of employee turnover.

Debt Policy

The County will issue debt only for the purposes of constructing or acquiring capital improvements, for making major renovations to existing capital improvements, for acquiring environmentally sensitive lands, and for refunding outstanding debt when sufficient cost savings can be realized or it is advantageous to do so.
The County will manage its debt and sustain its financial position in order to seek and maintain the highest credit rating possible.

Debt Issuance and Management Guidelines

Capital improvements related to Enterprise Fund operations should be financed solely by debt to be repaid from user fees and charges and other available revenue generated from operations of the respective Enterprise fund.
The County will issue debt only for the purposes specified in the debt policy.
The County will manage its debt and sustain its financial position in order to seek and maintain the highest credit rating possible.

Legal Debt Limit

There is no legal debt limit for the County.

Reserve or Stabilization Accounts and Fund Balance Targets

A reserve for contingencies complying with Florida Statutes 129.01(2) (c) shall be maintained to protect against unforeseen cash flow shortages, emergencies, and unexpected economic downturns.

Basis of Accounting

The accounts of the County are organized on the basis of funds and account groups, each of which is considered a separate accounting entity.
The operation of each fund is accounted for with a separate set of self-balancing accounts that comprises its assets, liabilities, fund equity, revenue, and expenditures.

Basis of Budgeting

Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all funds.
Actual spending cannot legally exceed the budgeted amount.

Expenditure Accountability

All expenditures will be maintained by a detailed line item based upon a chart of accounts that provides for uniformity of reporting and is consistent with the Uniform Chart of Accounts established by the State of Florida and generally accepted accounting principles (GAAP).
The operating budget will be appropriated at the major account levels of personal services, operating expense, capital outlay, grants-in-aid, debt service, and non-operating expense.### County Policy and Procedures
The County's purchasing policy is established under the "St. Johns County Purchasing Policy and Procedures."
Expenses will be charged against restricted revenue sources whenever possible.
The County seeks expenditure reductions through efficiencies, technology, productivity improvements, reorganization, outsourcing, or privatization of services.
The Finance Department determines the necessity of pre-paying certain expenditures, subject to Board approval where necessary.

Budget Preparation and Review

The budget will emphasize the link between fiscal and management (operations) planning.
The budget will include descriptions of each program's responsibilities, historical summaries of costs, previous year's accomplishments, and key objectives with quantifiable performance measurements.

Fleet Management and Replacement

A County Fleet Replacement Policy addresses fleet management, acquisition, and replacement, including the optimum replacement point.

Internal Service Funds and Budget Control

Internal Service Funds aim to break even, with profits used to lower internal service charges in the ensuing fiscal year.
Losses will be disposed of by crediting or charging billed departments according to their usage.
The Annual Operating Budget serves as the legal authorization for expenditures and financing.

Budget Amendments and Transfers

The County Budget Officer can approve internal or intra-department budget amendments or transfers without changing the total appropriation of the department.
The County Administrator reviews and approves all budget requests, including those for new programs, travel, contractual services, additional personnel, new vehicles, capital outlay, and computer hardware and software.

Budget Administration and Review

The County Administrator, County Budget Officer, and Clerk of Courts provide recommendations to update the Financial Policy as needed.
The Financial Policy undergoes annual review and modifications as deemed necessary.

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Description

Learn about financial policies and their role in effective planning of government expenditures, revenues, and financing of public services. Understand how it helps in achieving short-term and long-term service objectives.