Deck 14: Budgeting and Managing Costs Creatively

Question 1

Salaries and benefits are considered direct expenses.

Answer 1

True

Question 2

Rent and insurance are considered fixed costs.

Answer 2

True

Question 3

Preparing budgets is difficult because most law enforcement services are intangible.

Answer 3

True

Question 4

Line-item budgeting was initiated during the 1930s and is no longer popular.

Question 5

Long-term expenses are easier to plan for than short-term expenditures.

Question 6

The main clearinghouse for federal grants is a website called www.grants.gov, which makes available billions of dollars of grant money each year.

Question 7

Common costs are costs that are directly traceable to a segment of an agency, such as a particular department or division.

Question 8

An agency's calendar year and fiscal year are always the same.

Question 9

The budget is a critical document for __________.

A) operations
B) planning
C) administration
D) all of these

Question 10

Variance reports __________.

A) should be made annually
B) are an automatic red flag that the budget was prepared incorrectly
C) should be made known to everyone who directly or indirectly influences the costs
D) all of these

Question 11

Once drawn up, a budget should be strictly adhered to and never exceeded.

Question 12

It is unconstitutional for law enforcement agencies to charge for provision of traditional services such as DUI arrests.

Question 13

Reducing costs is the responsibility of all employees.

Question 14

Chiefs should develop a mind-set that sees budgeting as a year-round process, not just a task that occurs once a year.

Question 15

All law enforcement employees should contribute ideas related to budget items as specific needs arise.

Question 16

Writing a grant application is fairly easy; most applications have templates for departments to use that make them essentially a "fill in the blank" type of application.

Question 17

Another relatively new approach to saving costs that is being implemented by many agencies across the country is the effort to "go green."

Question 18

An accounting period is the time covered by the income statement and other financial statements that report operating results.

Question 19

Most police budgeting is __________.

A) an annual process
B) a continuous process
C) both an annual process and a continuous process
D) neither an annual process nor a continuous process

Question 20

Budgets prepared using a logical process beginning with the lowest levels of the department and working upward will be more accurate and complete.

Question 21

The most important obligation by the government to the citizens is to __________.

A) not spend tax money frivolously
B) represent the population as a whole
C) protect lives and property
D) provide quality services to the citizens

Question 22

A ___________ grant is awarded to states or localities based on population and crime rates.

A) formula
B) discretionary
C) utility
D) blended

Question 23

A fiscal year is __________.

A) the standard year for all governments
B) the same as a calendar year
C) the accounting or budget period for an agency
D) determined by an officer's hire date

Question 24

All are examples of ways to cut budgets according to your text except __________.

A) cut equipment viewed as luxuries
B) use precedent-cut items that have been cut before
C) cut all requests for personnel increases
D) all are ways to cut budgets

Question 25

The federal government's fiscal year begins in __________.

A) January
B) April
C) July
D) October

Question 26

Program budgeting __________.

A) requires much paperwork
B) is perceived by many managers as unproductive
C) both requires much paperwork and is perceived by many managers as unproductive
D) neither requires much paperwork nor is perceived by many managers as unproductive

Question 27

Subordinates should submit their ideas relating to budget items to __________.

A) their most immediate supervisor
B) their supervisor's supervisor
C) the police chief
D) those of equal rank

Question 28

Bottom-line budget philosophy holds that __________.

A) shifting funds from one category to another must be approved
B) funds may be expended beyond the total approved
C) there is no limit on funding
D) funds may be expended up to the total amount approved regardless of category

Question 29

The "all levels" police budget approach means that __________.

A) all department categories must expend equally
B) all levels of personnel should be involved in budget preparation
C) all levels must approve expenditures
D) all of these

Question 30

Budgets are not infallible because _______ will always arise.

A) variances
B) changes before final approval
C) disagreement with line items and costs
D) none of the above

Question 31

Using the team concept, departments can cut costs and make improvements at the same time by __________.

A) using an employee suggestion program
B) using a do-more-with-less policy
C) by not subcontracting outside the agency
D) using inmate labor

Question 32

Cutback budgeting requires __________.

A) that contingency funds be used to cover costs
B) that not all factors can be measured in dollars
C) using the same revenue to provide more services
D) doing less for more

Question 33

Costs that do not vary in total during a period even though the amount of service provided may be more or less than anticipated are called ___________ costs.

A) common
B) sunk
C) fixed
D) variable

Question 34

Some communities operate on a ______________ philosophy, which permits departments to shift funds from one category to another as long as the total budget amount is not exceeded.

A) zero-balance
B) horizontal-flow
C) bottom-line
D) full-sum

Question 35

Budget preparation responsibility may be assigned to __________.

A) the records division
B) a finance officer
C) a separate police division
D) any of these

Question 36

A basic starting point for budget preparation is __________.

A) the prior year's budget
B) the average of the last five years' budgets
C) knowing the total available revenues
D) all of these

Question 37

Personnel costs account for __________ percent of the average total police budget.

A) 25
B) 40
C) 65
D) 80

Question 38

The quartermaster system helps officers maintain __________.

A) ammunition
B) fuel for patrol cars
C) timesheets
D) uniforms

Question 39

Most departments have ________ types of budgets.

A) two
B) four
C) six
D) nine

Question 40

Variance budget analysis involves __________.

A) proactive budgeting
B) the difference between actual costs and amount budgeted
C) the difference between estimated costs and actual budget
D) none of these

Question 41

_____________________ are set aside for such unforeseen emergencies, but the precise total of allowable expenditures is difficult to ascertain.

Question 43

A budgeting system in which dollars are allocated based on productivity is called __________.

A) activity-based costing
B) performance budgeting
C) program budgeting
D) zero-based budgeting

Question 44

_________________ laws at the federal level, and in most states, allow law enforcement to use proceeds of certain seizures for equipment and other needs, especially when the seized property is drug-related and there are no victims to compensate.

Question 45

A(n) ________________ budget deals with all expenses needed to run the department.

Question 46

Many agencies have begun charging for traditional services, including __________.

A) credit card fraud investigations
B) larceny arrests
C) burglary investigations
D) DUI arrests

Question 47

________________ consists of comparing actual costs against what was budgeted and analyzing differences.

Question 48

According to your text, the asset forfeiture program has three goals. Which is not a goal of the asset forfeiture program?

A) enforcing the law while stripping criminals of their ill-gotten gains
B) improving law enforcement cooperation
C) creating revenue by taking property used in illegal activities
D) enhance law enforcement through revenue through equitable revenue sharing

Question 49

When managers at each level are responsible for the budget they need based on input from their subordinates, it is known as _________________ budgeting.

A) all-levels
B) flexible
C) holistic
D) democratic

Question 50

Budgets are formally approved statements of future expenses throughout the ___________ year.

Question 51

The budget is usually divided into two classes of expenses, __________.

A) fixed and variable
B) common and general
C) long-term and short-term
D) mandatory and compulsory

Question 52

The first step in solving cost problems is to identify ___________ areas.

Question 53

______________ control and guide how resources are used and make those in charge of them responsible for their wise use.

Question 55

A modern version of the program budgeting system that breaks costs down by activity is called _______________ costing.

Question 56

A(n) ________________ budget deals with "big ticket" items such as major equipment purchases and vehicles.

Question 57

Of the total amount budgeted for salaries and wages, fringe benefits usually receive about ____________ percent of the allocation.

A) 5
B) 15
C) 25
D) 75

Question 58

Most budget items are __________.

A) a continuous item
B) derived from written commitments
C) short term for the current year
D) designed to address staff issues

Question 59

The leading federal funding agency for law enforcement programs is the __________.

A) DOJ
B) DEA
C) FBI
D) ATF

Question 60

A formula grant is also called a ______________ grant.

Question 62

Discuss the advantages and disadvantages of a quartermaster system.

Question 63

List the basic types of grants available to law enforcement agencies, identify the various sources of funding, and explain how an agency should go about applying for such grants.

Question 65

Describe the various budgeting systems and discuss the advantages and disadvantages of each.

Question 69

Discuss the creative mechanisms employed by police administrators to enhance their budgets.

Question 70

Discuss the various ways departments might reduce costs and increase revenue.