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CMFO Exam with Questions with Complete Solutions
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CMFO Exam with Questions withComplete Solutions
Bond Disclosure Requirements - ✔✔All issuance of gov't debt must continuously file p[en
disclosure records
- muni budget
- Audited financial statements
- Appendix A - statistic description
Bond Rating - ✔✔Bonds must receive rating
Factors:
continuous responsible mgmt
schedule debt service requirement
status of community economy
socioeconomic background of population
outstanding debt
,Amount of temporary finance
Encumbrance System - ✔✔Accounting system to earmark funds for good and services rendered
for all local unit funds
Qualified Purchasing Agent Bid Threshold - ✔✔Municipalities with QPA $36,000 without going out
for bid
Muni w/o QPA $17,500
Governing Body must approve the $36,000 threshold
Utility - ✔✔Utilities are meant to be self-liquidating
- Purpose is to perform a specific function
- Fee should support the utility
- Not allowed to excess the appropriation over the prior years actual revenue
Utility Budgeting - ✔✔Utilities accounts separate and distinct from the local
unit Utility'sm surplus can be used as general revenue for the municipality
Audit Preparation - ✔✔Annual audits are prepared by licensed Registered Municipal Accountant
RMA
Internal Control - ✔✔Document Procedures
Segregation of Duties
Deposits within 48 hours
Pre-numbered Receipts and checks
Surprise cash count by auditors
Tag/inventory fixed assets and assign responsiblity
Internal Reports for governing body
CAPS - ✔✔Appropriation and Tax Levy Capped at 2%
, - If COLA is greater than 2% you can pass an amendment to reach the COLA cap
- If the raise is under the CAP, Municipalities can bank it
Debt Limit - ✔✔Municipal debt limit is 3.5% of prior 3 years of equalized asssessed real
property value
County limit is 2%
-Local Finance Board can approve existence of credit
-Down payment of Debt is 5%
Procedure for Authorizing Debt - ✔✔1) Identify Capital Need
2) Supplemental Debt Statement required by LFB
3) Bond Ordinance Prepared
4) Ordinance introduced to governing body
5) Ordinance is published in newspaper & 2nd reading 10 days later
6) After public hear bond ordinance is finally adopted
7) After final adoption, the ordinance must be published and does not take effect for 20 days.
-- No funds can be used during this time
8) Certified copies of ordinance, extracts of the minutes for the first read, adoption, Supplemental Debt
Sttmt, & proof of publication is transmitted to bond counsel
Short Term Debt - ✔✔Bond Anticipation - can issue before long-term debt can be renewed for
less than 1 year up to 10th-anniversary date of original note
Special Assessment Notes - may be renewed for period not exceeding 1 year and shall mature and be
paid no later than 5 years
Capital Notes - cannot exceed $200,000 or 5% of equalized valuation basis, 5 years
Long Term Debt - ✔✔Bonds
- Can be sold to the public or private negotiation
- Electronic auction
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