Deck 12: Developing Line-Item, Functional, and Program Budgeting Systems

Question 1

Line-item budgeting systems are characterized by the use of all EXCEPT which of the following:

A) standardized budget formats.
B) common budget definitions.
C) common lines of expenses or revenues.
D) a structured budgetary process.

Answer 1

C

Question 2

The time period, called a fiscal year, usually follows one of three time frames. Which of the following is NOT considered to be one of those time frames?

A) June 1 to May 31
B) January 1 to Dec 31
C) July 1 to June 30
D) October 1 to September 30

Answer 2

A

Question 3

The creation of a line-item budgeting system for a human service agency or program involves three of the following steps. Which of the following is NOT a step commonly used in creating a line-item budget?

A) Designing a standardized line-item budget format
B) Defining common budget terms and identifying all revenues and expenses
C) Balancing the budget
D) Receiving input form program staff

Answer 3

D

Question 4

The expense category of employee-related expenses would be operationally defined. Which of the following is NOT considered an employee-related expense?

A) Salary and wage costs
B) Social Security payments
C) Office equipment used by employees
D) Health and dental insurance costs

Question 5

Which of the following is NOT a part of the line-item budgetary process?

A) The standardized line-item budget format
B) A detailed justification for each expense
C) The identification and discussion of where proposed expenses might be reduced
D) Where additional revenues might be sought in order to bring the finalized budget into balance

Question 6

Functional budgeting systems are concerned with which of the following:

A) outputs.
B) efficiency.
C) outcomes.
D) productivity.

Question 7

Because both functional and program budgeting systems are concerned with determining the total cost of the program operated by a human service agency, they have implementation steps in common. Which of the following steps is NOT part of either the functional or program budgeting process?

A) Identifying the outcomes to be measured following the budgeting process
B) Creating the cost allocation plan format
C) Identifying direct and indirect costs
D) Allocating indirect costs to programs and determining the total cost of each program

Question 8

The first step in developing either a functional or program budgeting system is the creation of a line-item budget that identifies all anticipated revenues and proposed expenses. The second step in the process includes which of the following:

A) determining the human service agency's structure.
B) estimating the cost per unit of service.
C) determining the number of distinct programs.
D) defining the terms included in the budgeting process.

Question 9

Every item of proposed expense can be classified as either direct cost or an indirect cost. Which of the following is NOT an example of direct costs?

A) Salaries and wages of staff who work for only one program
B) Materials and supplies used exclusively in one program
C) Equipment used exclusively in one program
D) The cost of custodial work for the building

Question 10

Indirect costs are those items of expense proposed to be incurred for two or more programs. Which of the following is NOT an example of indirect costs?

A) A copy machine used in the case management program
B) Utilities
C) Telephone service
D) Building rent

Question 11

The use of the term "other operating costs" is used to those items of cost in a line-item budget that are not salary and wage related and tend to be indirect costs. Which of the following is NOT an example of other operating costs?

A) Supplies
B) Pension
C) Printing and copying
D) Travel

Question 12

The cost allocation methodology is used in allocating direct costs to a program. Which of the following is NOT a methodology used in cost allocation?

A) Direct labor costs
B) Direct costing
C) Total expenses
D) Total direct costs

Question 13

There is no best cost allocation methodology for a human service agency or program to use in allocating indirect costs. Which of the following statements is INCORRECT?

A) The total direct costs methodology is the simplest approach to implement.
B) The direct labor costs methodology is said to be superior approach then the majority of an agency's programs are labor intensive.
C) The direct costing method is said to be the most accurate for of cost allocation.
D) The indirect costing method is used when labor is intensive but labor hours are not.

Question 14

The knowledge of a program's true unit costs is necessary for which of the following:

A) determining the program costs of each program to determine efficiency of each program.
B) setting of fees.
C) operating under pay-for-performance contracts and grants.
D) determining the true costs of providing its various programs.

Question 15

Which of the following is NOT one of the steps to move from a line-item budget system to a functional or program budgeting system.

A) Selecting the program's intermediate output measure
B) Computing the program's cost per intermediate output
C) Determining the intermediate cost per client's per day of attendance
D) Determining the program's final output objective

Question 16

If you are the program manager and the agency strategic plan has an objective that includes 3,500 "units of service" and the total cost for the program is $391,143. Which of the following is the correct cost per unit of service for that program?

A) $1, 117.60
B) $$387,643.
C) $50.00
D) $111.76

Question 17

If your program has a total of 150 clients enrolled in your 8 week parenting program, what might you select as you final output measure:

A) number of times the client attended a class.
B) one client who received the full complement of services.
C) total number of class hours.
D) total number of days classes were held.

Question 18

By relating costs to planned outcomes (results, accomplishments, or impacts) a human service agency can determine all EXCEPT which of the following:

A) how cost effective its program are.
B) increase the credibility of the agency with funding sources, advocacy groups and clients.
C) determine if the program has excess staff.
D) use the information to plan for the future.

Question 19

Indirect costs typically include all EXCEPT which of the following?

A) Overhead costs
B) Organizational and maintenance costs (OM)
C) Agency staff who work on all agency programs
D) Salaries of program staff

Question 20

Which of the following is NOT a part of allocating indirect costs to the cost pool:

A) computing an indirect cost rate.
B) dividing the indirect cost pool by the total direct cost of all programs.
C) each program's share of direct labor costs.
D) using total direct costs as the basic to apportion the indirect cost pool.

Question 21

True Line-item budgeting systems seek to bring consistency to the budgetary process and to provide a financial overview of the human service agency and its programs.

Question 22

The revenue and expense categories (line-items) in a line-item budget format are designed to be mutually exclusive and exhaustive.

Question 23

A human service agency or program line-item budgeting format does not need to include a complete presentation of all anticipated revenues and proposed expenses. It should include only those items that are already committed to the agency or program.

Question 24

In human service agencies, functional, and program budgeting systems are generally developed only at the program level.

Question 25

The cost allocation plan format is the primary document used to derive a functional or program budget from a line-item budget.

Question 26

Every item of proposed expense can be classified as either direct cost or an indirect cost

Question 27

Functional budget systems differ because they focus on outputs while program budgeting systems focus on outcomes.

Question 28

The type of programmatic and financial data and information provided by program budgeting systems is extremely useful for planning purposes.

Question 29

All budget categories in a line-item budget should be operationally defined.

Question 30

Direct costs are those that apply to the whole agency or all programs.

Question 31

The work of the executive director in a human service agency benefits all agency programs and is an indirect cost. Her salary cannot be placed solely in any one program but is assigned to the __________.

Question 32

___________ budgets are characterized by the use of standardized budget formats, common budget definitions and a structured budgetary process.

Question 33

Each category of ________ and ________ is operationally defined to provide guidance and ensure uniformity in the treatment of budget items.

Question 34

A ________ balanced budget is created when the management of a human service agency or program consciously overstates revenues or understates expenses.

Question 35

The actual ________ of a budget reduction on the operations of a human service agency or program is equal to the amount of the necessary reduction multiplied by the number of months elapsed in the fiscal year.

Question 36

List and explain the four steps involved in the creation of a line-item budget.

Question 37

Functional budgeting systems are concerned with the outputs, efficiency and productivity of a human service agency's programs. 1) Define "functional budget system"; 2) Describe the categories of interest in a functional budget; 3) Give an example for each of the categories of interest.

Question 38

Define "Indirect costs", give at least three examples of costs that are considered indirect costs, and explain how an indirect cost get allocated to programs.