CMFO Theory

Question 1

True or False: Due from State of NJ for Sr Citizen deduction can be anticipated as a revenue in the current fund budget as a non-cash surplus

Answer 1

True- Need approval from DLGS for non-cash surplus.

Question 2

Trust Assessment fund cash is first pledged to:

Answer 2

Retirement of Serial bonds

Question 3

Municipal Library is paid on a ______ basis

Answer 3

Quarterly

Question 4

True or False: Budge transfers from Capital Improvement Fund are no permited

Answer 4

True: Capital Improvement is outside the CAP.
Once outside CAP cannot go back in once out.

Question 5

Corrective Action Plan Consists of:

Answer 5

1. Finding/Conditions
2. Recommendations
3. Explanation
4. Corrective Action
   5 Implementation Date

Question 6

When must the Corrective Action Plan be completed?

Answer 6

60 Days from receipt of the audit report

Question 7

Who mails out the Local Assessment Bills?

Answer 7

Tax Collector

Question 8

Who has oversight of the PERS & PFRS?

Answer 8

NJ Department of Treasury

Question 9

Developer Escrows with monthly charges over $1,000 CFO is required to …

Answer 9

Provide an accounting statement to the developer on a monthly basis

Question 10

One Tax point is equal to:

Answer 10

1/10,000 of the valuation
One Ten Thousandth of the Valuation
(Move decimal over 4 places)

Question 11

Local Finance Board can intereven when

Answer 11

1. Default on Bonds
2. Tax collection rate is less that 70%
3. Cash Deficit of the taxy levy in excess of 4% for 2 consecutive years

Question 12

True or False:
Resident requesting to inspect vouchers that were approved for payment at the most recent meeting inspection of vouchers must be made available for inspection immediately:

Answer 12

True:
The law requires that:
-Budgets
-Bills
-Vouchers
-Contracts (Including collective bargaining agreements and individual employment contracts)
-Public employee salary and overtime information (Part of the Open Public Records Act)

MUST BE PROVIDED IMMEDIATELY UPON REQUEST

Question 13

Requirements for Financial disclosure forms:

Answer 13

1. Income Greater that $2,000
2. Gifts Greater than $400
3. Property within the state of NJ

Question 14

Ture or False: The supplemental debt statement is filed with the 1st and 2nd reading of the bond ordinance.

Answer 14

False
The Supplemental Debt Statement must be filed prior to the introduction of the Bond Ordinance

Question 15

True or False:
3 different bond ordinances are introduced at 1 public meeting, only one supplemental debt statement is required.

Answer 15

True

Question 16

True or False:
The anticipated revenue for receipts from delinquent taxes is limited to the amount of revenue realized in the prior year.

Answer 16

False:
It is based on sheet 26 of the AFS

Question 17

True or False:
The Annual Debt Statement is due upon intro of a bond ordinance

Answer 17

False:
The SUPLEMENTAL debt statement is due upon introduction of a bond ordinance.

Question 18

True or False:
The Federal single audit is required if federal grant expenditures is equal or greater than 750,000.

Answer 18

True

Question 19

True or False:
The Cash Management plan can be amended any time.

Answer 19

True

Question 20

Net Debt= _________-___________

Answer 20

Net Debt= Gross Debt - Deductions

Question 21

Liquidity is security that can be converted into

Answer 21

Cash

Question 22

Chairperson of the local finance board:

Answer 22

Director of the DLGS

Question 23

Old Escrow accounts escheat to

Answer 23

The State as unclaimed property

Question 24

True or False:
Interest on utility assessment debt is appropriated in the current fund.

Answer 24

False
The debt is raised in the utility operating fund.

Question 25

A _____ vote is required for the budget transfers.

Answer 25

2/3

Question 26

True or False: In regards to use of PC card, under no circumstances may a transaction exceed 15% of the municipality bid threshold.

Answer 26

False

Question 27

True or False: Pursuant to budget law, municipalities are permitted overspend a legal line item appropriation if the overall current fund budget remains in a surplus position.

Answer 27

False

Question 28

When a Municipality that carries statutory excess in reserve for an animal control fund at year end what happens?

Answer 28

Excess is due to current fund and recorded as MRNA

Question 29

True or False: Director approves budget

Answer 29

False

Question 30

True or False: The unexpended balance of debt service must be cancelled by resolution and no bids were submitted.

Answer 30

False

Question 31

True or False: An Emergency note can be issued in anticipation of the collection of taxes in a fiscal year

Answer 31

False: TANS are not emergency notes

Question 32

True or False: Capital budget must be adopted by a majority of the governing body.

Answer 32

No Less than 2/3 the full governing body

Question 33

True or False: Municipalities are permitted to negotiate with a vendor after 2 attempts, response to bids were too high

Answer 33

True

Question 34

True or False: If a trust assessment fund cash is less than the required budgeted amount to retire debt service, a required appropriation in the Current fund budget is necessary to cover the deficit.

Answer 34

True

Question 35

The number of miles of roads paved in terms of expenditure would be an example of which type of budgeting:

Answer 35

Performance based budgeting

Question 36

True or False: Maturity schedule for bonds does not have to be included in a bond ordinance.

Answer 36

True

Question 37

Budget appropriations transfers during the last 2 months of the year requires what vote:

Answer 37

2/3 Full Membersip

Question 38

True or False: DLGS approval does not need to be included in specs for banking services

Answer 38

True

Question 39

Which of the following activites would NOT create a deferred charge: A. An emergency appropriation B. Prepaid Taxes not applied to taxes receivable in full C. An over expenditure D. An expenditure without an appropriation

Answer 39

B. Prepaid taxes not applied to taxes receivable in full

Question 40

Best practices: Which of the following can be found on a municipal website? A. Past 3 years of Adopted Budgets B. Current year proposed budget and most recent financial statements and audits C All of the above

Answer 40

C. All of the above

Question 41

Equalized valuation:

Answer 41

The true value of all taxable property in the municipality

Question 42

Which of the following is not a permitted investment for municipal funds? A. Local Government Investment Pool B. Certificate of Deposit C. Derivative instruments maintained in the United States D. Government Money Market Mutual Funds E. US Treasury Bills

Answer 42

C. Derivative instruments maintained in the united states

Question 43

Budget Transfers during the last 2 months may not be made to ____. A. Deferred charges, B. RUT C. Down Payment on Improvements. D. CIF E. All of the above

Answer 43

E. All of the above.

Question 44

What is the period of useful life?

Answer 44

5-40 years

Question 45

A municipalities borrowing capacity is based on

Answer 45

Net Debt

Question 46

True or False: Patrol Cars are bondable assets.

Answer 46

False **SUVs are bondable but cars are not**

Question 47

Local Government bonds maybe sold privately, except when the total bonds is greater than $___________

Answer 47

$1,000,000

Question 48

Eligible Shared Services include:

Answer 48

Joint collection of taxes Joint Municipal Court Joint Solid Waste Collection/Disposal Health Services

Question 49

True or False: Division of local Government Services must approve Petty Cash, Change in title and text, dedicated by rider, Emergency Appropriations in excess of 3% of operation appropriations.

Answer 49

True

Question 50

True or False: Dedication by rider must be accounted for in the current fund.

Answer 50

False: Dedication by Rider is a Trust fund specifically set up for the purpose of the dedication by rider

Question 51

True or False: Special Improvement District Budgets must be approved by the governing body

Answer 51

True

Question 52

True or False: The budget Message does not need to contain an explanation of appropriation, levy caps and a listing of appropriation split by CAP

Answer 52

FASLE

Question 53

Correct procedure to adopt budget:

Answer 53

1. Intro and Approval 2. Publish Advertisement, Public Hearing, Amendments (If amendment advertising/public hearing) 3. Adoption

Question 54

If a municipality does not have an ethics board who will act as the ethics board?

Answer 54

Local Finance Board

Question 55

What is the official budget required to be adopted

Answer 55

Line item Budget

Question 56

True or False: Payment of utility assessment bond principal is recorded as an expenditure in the utility assessment trust fund.

Answer 56

True

Question 57

True or False: A tax over payment should be applied to the amount to be raised by taxation

Answer 57

False

Question 58

True or False" Township Administrator can be enrolled in Defined contribution retirement plan (DCRP) as opposed to PERS

Answer 58

True

Question 59

2010 CAP Eliminated the add on increases for the RUT transitional aid must demonstrate that user fees have been established for ____ _____ so that taxpayers are not subsidizing___ ___.

Answer 59

Discretionary Services, Non-Essential Programs

Question 60

True or False: Unexpended bond proceeds may not be appropriated to fund additional capital improvement projects with a shorter useful life

Answer 60

True

Question 61

True or False: Storm recover reserve can be used for salt and sand purchases, snow removal, and salaries and wages, LFN 2015-11 (40A:4-62.1) Unexpended balances budgeted annually for snow removal may be lapsed into the reserve

Answer 61

True

Question 62

The Local Assessment receivable for each parcel of property falls on the _____.

Answer 62

Tax Collector

Question 63

True or False: Dedication by rider added to a municipality's budget must be accounted for in the current fund as opposed to the trust fund.

Answer 63

False: Dedication by Rider is a trust fund account

Question 64

True or False: Capital Budget must be adopted by the majority of the governing body present.

Answer 64

False: Capital Budget is part of the regular budget and must get approved with same vote count as the budget.

Question 65

True or False: The summary of notice of bond sale may not be advertised electronically

Answer 65

True

Question 66

True or False: Cancellation of an improvement authorization funded completely from the CIF may be returned to the fund balance account.

Answer 66

False

Question 67

Trust Assessment cash is first pledged to ____________.

Answer 67

The retirement of bonds and notes.

Question 68

In what fund is gross utility debt reflected in

Answer 68

Water Capital

Question 69

Method of accounting for transactions:

Answer 69

Modified Accrual Basis

Question 70

When Recording the budget entry to set up budget appropriations are? A. Credit B. Debit

Answer 70

Credit

Question 71

True or False: 3 lowest bidders security must be returned within 60 days

Answer 71

False

Question 72

What may unexpended bond proceeds not be appropriated for?

Answer 72

To fund additional capital improvement projects with a shorter life

Question 73

A dedication by rider can be made to budget based upon:

Answer 73

The amount of revenue could not be reasonable estimated in advance.

Question 74

Regulations concerning fiscal controls are estimated in:

Answer 74

NJAC 5:30

Question 75

Vote Required to pass bond Ordinance:

Answer 75

2/3 full membership of governing body

Question 76

Vote required for Budget transfers

Answer 76

2/3 full membership of governing body

Question 77

Appropriation CAP %

Answer 77

2.5% or index rate (Whichever is higher) *Can pass resolution to bring it to 3.5%

Question 78

When is the first Bond Anticipation Note Due?

Answer 78

On the 3rd Anniversary Date

Question 79

Formula for first BAN Payment

Answer 79

Principle/ (useful life*2)-1

Question 80

Latest BAN's can mature by:

Answer 80

1st day, 5th month, following the close of the 10th year

Question 81

Votes needed to pass a bond ordinance:

Answer 81

2/3 members of the governing body

Question 82

Minimum deposit required by bidders to participate in bond sale.

Answer 82

2%

Question 83

Tax Levy Cap:

Answer 83

2% Exclusions include: Capital, Debt, and Statutory

Question 84

Appropriation Cap:

Answer 84

2.5% or cost of living adjustment (Whichever is less) 3.5% if COLA ordinance is passed

Question 85

Contingent Expenses Maximum

Answer 85

3%

Question 86

Limit for emergency appropriation of the total current and utility budget appropriations

Answer 86

3%

Question 87

Municipal Debt Limit

Answer 87

3.5%

Question 88

Capitalized, Non-Deductible debt for a municipal public utility in deficit. (20xs rule)

Answer 88

5%

Question 89

Temporary budget appropriations shall not exceed

Answer 89

26.25%

Question 90

Percentage in excess of bid threshold, may sell its personal property not needed for public use at public sale to the highest bidder

Answer 90

15%