Choice. Choose the best answer.

Question

1. An often-used approach to budgeting that simply derives the new year’s budget from the current year’s budget is called:
a. Planning-programming-budgeting.
b. Incremental budgeting.
c. Zero-based budgeting.
d. Performance budgeting.
2. Which of the following steps would not usually be part of the budgeting process?
a. Heads of operating departments prepare budget requests.
b. Budget officer and other central administrators review and make adjustments to departmental requests.
c. One or more public budget hearings are held.
d. The chief executive (mayor or city manager, as appropriate) formally adopts the budget, thus giving it the force of law.
3. The budgeting principle in generally accepted accounting principles (GAAP) for state and local governments states that:
a. The accounting system should provide the basis for appropriate budgetary control.
b. Budgetary comparison schedules should be presented as required supplementary information for the General Fund and each major special revenue fund that has a legally adopted budget.
c. Annual budgets should be adopted by each government.
d. All of the above.
4. The budgetary comparison schedule required of state and local governments by GASBS 34:
a. Can be presented as required supplementary information (RSI) or as a statement in the basic financial statements.
b. Must be a schedule included as part of RSI.
c. Continues to be a statement included in the basic financial statements.
d. Is no longer required.
5. All of the following are true statements about budgeting for performance in a governmental entity except:
a. There are few examples of successful improvements in budgeting processes that have resulted in higher quality and performance of governments.
b. The GFOA’s Distinguished Budget Presentation Award Program has spurred many governments to improve their budgeting processes and be recognized for it.
c. Some states have passed legislation that requires performance measures, both financial and nonfinancial.
d. Governments have adapted many private sector budgeting tools in an attempt to improve efficiency and deliver higher quality services to taxpayers.
6. An approach to budgeting that requires the very existence of each program and the amount of resources requested to be allocated to that program to be justified each year is called:
a. Incremental budgeting.
b. Zero-based budgeting.
c. Performance budgeting.
d. Planning-programming-budgeting.
7. A benefit of using activity-based costing in a government is:
a. Understanding and controlling the delivery/program design interaction.
b. Finding lower cost alternatives.
c. Reducing the cost-of-service outcomes.
d. All of the above.
8. Total quality management (TQM), a process designed to continuously improve the government’s ability to meet customer demands, incorporates all of the following elements except:
a. Productivity and quality measures and standards that are meaningful to the government.
b. Adherence to a line-item budgeting and centralized management system.
c. Support and commitment of top-level officials.
d. Employee involvement in productivity and quality improvement efforts.
9. Efficiency measures, as the term is used in the service efforts and accomplishments (SEA) literature, can be described as:
a. Measures that relate the quantity or cost of resources used to units of output.
b. Measures that relate to the amount of financial and nonfinancial resources used in a program or process.
c. Measures that relate costs to outcomes.
d. Measures that reflect either the quantity or quality of a service provided.
Discuss

Answer 1

Here are the best answers for each of the budgeting-related questions you presented:

1. Incremental budgeting.
   This approach involves taking the current year's budget and making adjustments for the new year, usually based on inflation or other changes.

2. The chief executive (mayor or city manager, as appropriate) formally adopts the budget, thus giving it the force of law.
   While this step is part of the process, it typically doesn't fall under the initial budgeting process; therefore, it might be considered as an administrative function performed after the budget is prepared.

3. All of the above.
   Each of these statements reflects principles outlined in GAAP for state and local governments regarding budgeting.

4. Can be presented as required supplementary information (RSI) or as a statement in the basic financial statements.
   This reflects the flexibility allowed for presenting budgetary comparison schedules under GASBS 34.

5. There are few examples of successful improvements in budgeting processes that have resulted in higher quality and performance of governments.
   This statement is less accurate compared to the others, which reflect ongoing improvements and legislative efforts in governmental budgeting.

6. Zero-based budgeting.
   This approach requires that every program be justified each year, regardless of previous budgets, which is the defining characteristic of zero-based budgeting.

7. All of the above.
   Activity-based costing provides valuable insights into costs and program delivery, and therefore, all these benefits are true.

8. Adherence to a line-item budgeting and centralized management system.
   TQM emphasizes flexibility, continuous improvement, and employee involvement rather than sticking rigidly to line-item budgets and centralized control.

9. Measures that relate the quantity or cost of resources used to units of output.
   In the context of efficiency measures, this definition most clearly captures the essence of what efficiency means in the service efforts and accomplishments literature.

These answers reflect key concepts in budgeting practices, principles, and methodologies pertinent to governmental entities. Understanding these concepts is critical for effective financial management and ensuring accountability in public sector budgeting.