Term
What type of controls does a state legislature establish to limit the amount of money that can be spend on salaries, equipment, utilities, supplies and travel.
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Definition
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Term
What is the primary financial control device used in government?
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Definition
| An appropriated budget with an accompanying system of budgetary accounting. The budget is law. |
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Term
Describe the relationship amoung appropriations, apportionments and allotments at the national level.
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Definition
| Appropriations are budget laws passed by Congress. After appropriations are passed, the OMB apportions budgetary authority to major departments and components of government. The major department or component further distributes the budgetary authority within its own organization ("down the chain") by issuring allotments to its organizational units. |
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Term
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Definition
| A budget is a legal document or law which defines and constrains government operations. It has a limited life. A budget is an expression of public policy and is used as a communication device. |
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Term
| What is the primary reason for establishing a special fund? |
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Definition
| The purpose of establishing a special fund is to ensure that specially-identified (or dedicated) revenues are applied to specific programs. A well-known example is when receipts from gasoline taxes are depositied into a special fund for highway repairs. |
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Term
| Describe limits of government borrowing at various levels of government. |
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Definition
At the national level, the debt limit can only be raised by an act of Congress, which occurs frequently. The national govenment borrows for both operational and capital expenses. Most state constitutions and local charters limit borrowing to capital improvement projects; most state and local entities cannot borrow to cover operational expenses. (Few exeptions, revenue anticipation notes) In many cases, a proposed government debt issue must be put before voters before borrowing can take place. Many bond covenants limit future borrowing by the entity until the debt issue associated with the covenant is paid off. |
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Term
| Explain why the use of special funds and earmarks is controversial. |
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Definition
| Some observers criticize the use of special funds and earmarks because they appear to bypass the normal budget process. As a result of special funds and earmarks, certain programs or objectives receive "set aside" funding without having to "compete" with other programs for scarce public funds. |
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Term
| Describe the relationship between the strategic plan and the budget. |
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Definition
| The strategic plan is a longer-term document (usually 3 to 6 years) while the budget is a shorter-term planning document (usually 1 to 2 years). The budget reflects the current plans for achieving long-term goals. The strategic plan should always be integrated with the budget. Linking the budget to performance measures is another trend. |
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Term
| Compare a government budget to a private sector budget. |
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Definition
A government budget is a control device that limits expenditures by purpose, time and amount.
A private sector budget has few controls and much greater flexability. One of many management tools. |
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Term
| Summarize the Government Management Cycle |
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Definition
- Planning
- Programming
- Budgeting
- Operations PPBOARA
- Accounting
- Reporting
- Auditing
- Planning
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Term
| As a sovereign entities, describe some fiscal and monetary powers of governments. |
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Definition
- Tax citizens and corporate entities
- Establish budgets and spend public funds for authorized purposes
- Borrow funds for goverment operations and capital investments (usually only National)
- Create money (National ONLY)
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Term
| Explain how the Federal Reserve Bank (FRB) moderates the supply and cost of money. |
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Definition
| The Reserve uses tools such as buying and selling government bonds, altering the amount of reserves that other banks must keep on deposit with the FRB and changing the interest rate at which it loans funds to other institutions. |
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Term
| Define the detailed budget process. |
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Definition
- Formal, public hearings and town hall meetings
- Debates and hearings within the executive branch
- Central management agencies provide budget targets to other agencies
- Submitted to legislative branch, committee hearings
- Central support agencies advise legislative branch
- President signs or vetos
- Subject to judical review
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Term
| Explain seperation of powers over the budget process. |
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Definition
| The legislative branch creates the budget through laws and ordinances; the executive branch implements the budget through various programs and services; and the judicial branch settles disputes over the formation and execution of the budget. |
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Term
| Explain the several contrants of government sovereignty. |
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Definition
| Legal constraints, checks and balances from the seperation of powers and contraints inherent in the slow, deliberate legislation process. The ultimate political constraint is the ballot box. |
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Term
| Describe legal contraints. |
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Definition
| Legal constraints derive from constitution, statutes and ordinances. The include limits on the type of tax, rate of tax and tax collection process. |
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Term
| Describe the ways legal restrictions can be placed on government borrowing. |
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Definition
- Purpose- Borrowing is often restricted to capital investments.
- Term- Government debts must be repaid in a specified period.
- Amount- Total amount of debt is restricted in various ways. National government has a debt limit based on absolute value of debt. States, usually percentage of total state budget. Local, often tied to assessed value of real estate.
- Process- Often borrowing is only allowed by referendom. Must go to voters approval.
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Term
| Where is the national governments debt limit restricted. |
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Definition
| Statutes. (NOT the Constitution) |
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Term
| Describe an apprpriated budget. |
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Definition
An appropriated budget provides legal authority to spend as well as a legal contraint on government spending. If a budget is not passed by the start of a new fiscal year, the government does not have legal authority to operate.
Solution: Continuing Resolution |
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Term
| Explain the difference between Debt and Deficit. |
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Definition
| Debt is planned, short or long-term borrowing to finance government objectives. A deficit occurs when government expenditures for a specific fiscal period exceed revenues. |
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Term
| Explain the legislative branch budget powers. |
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Definition
| The legislative branch has the most power over the budget. It passes laws related to taxation, budgets, borrowing and debt ceilings. Know as "Power of the Purse" |
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Term
| Explain the executive branch role in the budget. |
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Definition
The president and most governors are required to submit a proposed budget to the legislature known as the executive budget. May be declared "dead on arrival" and legislature could start from stratch. Once approved it is returned to the president or governor for a signature.
Forty governors have line item veto power. The president does NOT!
Once it becomes law, the executive branch implements the budget and the legislative branch provides oversight.
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Term
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Definition
| Special funds are often created through legislation and are used to collect designated revenues and other resources and direct them to specific uses. (Highway Trust Fund) |
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Term
| Describe the difference between Authorizations and Appropriations. |
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Definition
| An authorization is a bill that approves programs; it prescribes what an agency will do if funding is available. An appropriation is the budget bill that actually makes the funds available. |
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Term
| Describe the difference between programs and object classes. |
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Definition
| When a budget says funds must be spent for specific purposes, such as juvenile corrections or community health clients, it is controlling spending by program. When a budget says funds may only be spent on specific types of goods or services, such as tools and supplies, it is by object class. |
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