1
Q
Financial Management
Which includes what 3 things?
A
Overall coordination of financial resources.
- Developing a budget to the use of funds over a period of time.
- Determining how to acquire alternative funds to meet organizational goals and objectives.
- Understanding processes for purchasing and handling cash.
2
Q
Who has the ultimate responsibility of financial management within an agency?
Who else shares this responsibility?
A
CEO and Board
Staff (events, programs, entire department)
3
Q
To gain an understanding of an agency’s operation, it is necessary to collect what 2 types of data?
This data assists in the accounting for what 3 things?
List 4 additional types of data collected in public PnR.
Activity Reports
A
Financial and Operating.
Cash handling, revenues, and expenditures.
- Attendance - used to predict future program participation.
- Room counts - shows facility use patterns.
- Cash Reports - # of people at the facility, amount of admission paid, and amount of goods and services purchased.
- Maintenance Reports - shows workflow, productivity, and repairs made.
Reports that can be customized based on a program area. Ex: # of pool participants, # of lessons, # of gift certificates sold, and towel rentals.
4
Q
What is the purpose of establishing a systematic accounting system?
A
to discourage dishonesty, reduce corruption, avoid criticism.
5
Q
List 9 examples of cash handling procedures.
A
- Post a schedule of fees at RC.
- Require 2 employees at admission entrance.
- Cash register - if there is not enough business for 2 employees, the cash register is an acceptable control device.
- Reconcile Receipts - compare to a monetary amount.
- Rotate shifts - staff at different facilities and schedules
- Receipts with carbon copies
- Daily Deposits of collections
- Keys - only supervisors
- Unannounced visits by internal auditors.
6
Q
Requisition
A
Approval to purchase something.
7
Q
List 4 different procedures that can be followed to purchase something.
A
purchase orders
p-card -no recurring balance. paid off monthly. can be isolated to be used at only 1 place.
credit card
petty cash
8
Q
List and define the 2 types of purchase orders.
A
- Blanket Purchase Orders - used for making multiple purchases. Good for maintenance staff at hardware stores. A Blanket PO is set up for each Buckeye SIC instructor because we don’t the final amount needed.
- Standard Purchase Orders - POs in the exact amount issued for one-time purchases.
9
Q
The Petty Cash Fund Custodian
A
is Responsible for cash accountability, safe keeping, and proper use.
10
Q
List 3 limits placed on purchasing.
A
- maximum amount that can be spent without superior approval.
- the maximum amount that requires higher-level approval.
- the spending level that requires a formal bid
11
Q
List the 5 steps in the purchasing process.
A
- request a purchasing requisition.
- Obtain quotes.
- purchase order, p-card, or etc.
- Make the purchase
- Submit the receipt
12
Q
When a grant capital project is complete, the agency is left with the….?
A
operation and maintenance cost.
13
Q
List the 3 steps an agent must complete to obtain a grant.
A
- Build the project
- Apply
- Administer (meet grant deadlines)
14
Q
List and define 7 items commonly found in a grant application.
A
- Cover Letter - 1 or 2 pages, explaining who you are, what you want, how you found out about the grant, and overview of contents in the packet.
- Executive Summary - 1-2 page statement summarizing the contents of the packet. Project overview, budget summary, and need for the grant.
- Problem Statement/Need Description - demonstrates why the project is needed, why it needs funding, the benefit to the community, how progress and outcomes will be measured, and how the project aligns with the grant.
- Work Schedule - timeline of work to be completed.
- Budget
- Qualifications
- Appendices - include any of the following the grant agency may request: master plan, strategic plan, site plan, or letters of support
15
Q
What is the most important portion of a grant?
A
Problem Statement/Need Description
16
Q
Planned Giving
A
A major gift to an organization a.k.a gift or donation. Ex: wills, land, stocks, cash.
17
Q
PnR agencies making donor requests requires what 3 things.
A
- The agency wants and needs.
- cultivating potential donors by establishing relationships with them
- and finally asking for a donation.
18
Q
To be successful in donor based fundraising, an investment in what is required?
A
Staff training
19
Q
In donor fundraising agencies must establish a policy on what?
A
What will and will not be accepted as gifts. Ex: Land being to expensive to operate
20
Q
Sponsors can be found at what three levels:
A
Local businesses, regional businesses, and national companies.
21
Q
What factor increases the cost of event sponsorships?
A
The higher the level of event exposure.
22
Q
List 5 things sponsors are seeking in return for sponsoring.
A
- Naming rights to an event
- Public awareness and image enhancement
- Public distribution
- Marketing opportunities
- Hospitalities opportunities for their own customers (VIP seats at PIR).
23
Q
List 4 things to include in a Sponsorship Proposal.
List
A
- Event history
- Logistics - date, time, , budget, etc.
- Event benefits - for the community
- Sponsorship packages
24
Q
List the 4 levels of a sponsorship package and give the % value for each? note: this is one of 4 parts of a Sponsorship Proposal
A
- Title Sponsor - event naming rights, first right of refusal for other sponsors. 100% of value.
- Presenting Sponsor - 25-50% value of title sponsor.
- Official Sponsor - 10% value of the title sponsor
- Official Supplier - less than 10% of the title sponsor value.
25
Which of the 4 levels of a sponsorship package is good for smaller businesses?
Official Sponsor
26
Which of the 4 levels of sponsorship evolve the provision of goods and services?
Official supplier
27
What needs to be done before bringing a sponsorship proposal to a business?
1. Know who they are
2. Who owns the company
3. Other events they sponsor.
4. Mission and values
28
What are 5 good resources to research on a company you are seeking sponsorship from?
1. Annual report
2. Website
3. Newspapers
4. Talking to their staff
5. Networking in their community to get to know their staff.
29
Before attempting to secure an alternative funding source (sponsor), what do agencies need to have in place?
A plan describing what is needed and how they should secure the needed funds.
30
If a plan is not in place before asking a potential sponsor for funding will result in what?
Expending significant resources with little return on investment.
31
Fees and charges are established in accordance with the agency's what?
What type of agency does this apply to?
Mission and financial objectives and/or philosophy.
Public, nonprofit, and private
32
What is a popular means of controlling pricing decision making and setting fees and charges for programs?
Pre-establishing subsidy levels. (you subsidized soccer by 50%)
33
Which of the 2 agency types have policies that outline what level of cost recovery that different types of programs must achieve.
List what 3 things that those programs can be earmarked (designated) to make.
Nonprofit and public.
Profit, break-even, or to be subsidized with other revenue streams.
34
Is it uncommon for agencies to establish subsidy levels to develop a plan over several years to reach projected subsidy targets
No
35
1. Cost-recovery Analysis
2. Cost-recovery Level
3. Cost-recovery Rate
4. Before establishing cost-recovery levels what must first be determined?
5. To determine this, what does one need to understand?
1. The fees and charges being established in accordance with the agency's philosophy.
2. The amount a program will be subsidized
3. % of the program will be either subsidized, break-even, or make a profit.
4. Program cost.
5. Program Demand and Cost
36
Demand
The demand for a program is the minimum and maximum enrollment for a program or the projected number of participants at an event or a facility.
37
List 1 reason why knowing the demand for a program is important.
To establish the proper price for a program.
38
How do you project the demand of a program (registration expectation)? List all 4 based on science.
List the 1 based on art.
Science:
1. Understanding of the needs and interests of the community as well as their ability to participate.
2. Tracking programs over a number of years.
3. Following trends
4. Analyzing how quickly the community responds to them - fast adopter, middle adopter, and late adopters.
Art:
Gut Reaction
39
When establishing a price for a program, it is best to underestimate what and overestimate what?
Demand and supply.
40
1. Fixed Costs- define
2. Fixed costs may be categorized as what 2 types of costs? Define both and provide examples.
3. In order to establish a price and analyze cost-recovery levels, it is necessary to know what 3 things? Define and give examples.
1. Those that do not change with the number of participants and remain constant for the duration of a program.
2. Direct Fixed Costs - Are a result of conducting a specific program. If the program did not take place, the costs would not be incurred. Ex: renting an activity room. Regardless of the number of participants, the rental fee remains the same.
Indirect Fixed Costs - Overhead costs. Costs such as utilities, maintenance, admin expenses that are not directly traceable to a specific program. They are fixed because they remain the same regardless of participant enrollment.
3. Direct Fixed Costs
Changing Fixed Costs - Costs that change by volume but not by individual participants. Ex: Every 12 participants requires the cost of another instructor
Variable Costs - Costs that result from the operation of the program and based on the number of people enrolled. Ex: sports t-shirts given to every participant would be a variable cost.
41
List and define 2 ways fixed costs are assigned to programatic areas.
1. Equal-share allocation - where each program area pays an equal share of indirect costs (ex: tennis, golf, fitness all pay $25K).
2. Percent-of-Budget Approach - where the program area pays the percentage of indirect costs that is equal to the percentage of the overall budget the program area commands (Tennis 40% with a $40K budget, Golf 25% with a $25K budget, Fitness 30% with a $30K budget.
42
In order to establish fees, what must be determined?
Variable Costs
43
What equation will give you the break even price of a program? Is this equation first or second performed on the final cost?
Once cost recovery rates are established, the final price of the program can be set using what formula?
P=(F+V) / N
Price
all Fixed costs (rental, maintenance, services)
Variable costs (t-shirts, supplies, equipment)
N= Demand for the program (could be # of participants or the # of hours shop is open)
N example - hours to operate a facility
2nd because the subsidy rate has not been added.
P=unit cost x (1 - S)
44
After the actual cost of the program is known, what other 3 factors decide the price/fee charged to participants.
1. Subsidy levels
2. Competitor prices
3. Market price (supply/demand)
45
Cost-recovery levels for each program type is based on what?
List and define those 3 levels.
Agency's philosophy
1. Public Service - benefit the whole community. 100% subsidized. Ex: parks, trails, playgrounds.
2. Merit Service - partial cost recovery from subsidy and fees/charges.
3. Private Service - break even or make a profit. Ex: karate.
46
Can a teen service with some fee/charges still be considered a public service. Why?
Yes, teen programs are considered public service because of the money saved when teens are engaged in healthy recreation opportunities. That is the subsidized public service amount.
47
When can the subsidy level be established?
Once the break-even price is established.
48
Final Price Formula.
Give an example of a formula with a 45% subsidy.
Give a formula showing a program is priced at a break-even point.
What does a negative subsidy mean? What will an example look like in the formula.
P=unit cost x (1-S)
$47 * (1 - .45)
$47 * (1 - 1.0)
Profit. 47 * 1-(-.45) or $47 * (1.45)
S is the subsidy rate
note: subtracting S by 1 is the final revenue % to multiply the unit cost. Reminder the Unit Cost is the Cost-Recovery Rate.
49
1. Using what type of vendor has become an increasingly common agency practice.
2. Why?
3. But it should be viewed as what?
4. What should be developed when working with these types of groups.
5. What is essential to working with those types of vendors?
6. List 4 monitoring approaches to the vendors.
1. Contractor, consultant, and concessionaire.
2. Believing it is a more effective and efficient type of service.
3. Temporary expansion of the agency's staff and skill base.
4. Contract
5. Communication
6. Progress reports, inspections, review complaints, survey
50
1. List 3 examples that are a major source of revenue for PnR agencies to offset cost of operations.
2. What is the simplest method to expedite cash inflow
1. Fees, rental, retail.
| 2. Establish procedures to deposit as quickly as possible.
51
Which of the 3 types of agencies have the most flexibility in establishing prices and why?
What is the 1 type without much flexibility and why?
Public and nonprofit because they will have varying subsidy levels.
Commercial - they must assure that fees exceed charges.
52
Differential Pricing
Seeing fees based on facility desirability, location, hours of service, customer characteristics (age or ability to pay).
53
Fees and charges are set to do what 4 things?
These factors + cost recovery levels are used to establish what?
This sometimes has to be approved by whom and why?
1. Recover costs
2. Create new resources for other programs
3. Establish value of the program
4. Influence behavior (late fees).
Fee Schedule
A governing body, if there's a price increase.
54
In communicating the budget needs to a supervisor, list three things that must be done.
1. Establish price and cost recovery levels to ensure fees and charges are correct.
2. Develop a program budget with description and revenues and expenditures.
3. Justify expenditures. Each Line Item should have a justification for it's need.
55
List the 3 STAGES of a budget process.
1. Preparation
2. Adoption or authorization
3. Execution or implementation
56
Who sets the timeline of a budget?
The chief executive of an agency.
57
All leisure professionals should know what?
the budget preparation timeline and procedures used in the agency.
58
Entry-level leisure professionals will be involved with budget preparation in what 2 ways?
1. Prepare a budget for their assigned area of responsibility, including accurately estimating revenues and expenditures.
2. Assist other staff with their budget preparation.
59
Explain the 3 steps in which budgets are SUBMITTED.
1. Frontline staff submit individual operational budgets.
2. These individual budgets are then summed up by department.
3. Department heads then submit budgets to CEO.
60
List 2 basic elements found in all public, commercial and nonprofit park budget preparation forms.
1. Anticipated revenues and expenditures
| 2. Make clear the agency goals and objectives to be achieved.
61
Capital Budget
Money for the acquisition or maintenance of fixed assets such as land, buildings, and equipment.
62
PnR revenue comes from what 5 sources. List and define.
1. Compulsory Income - taxes
2. Gratuitous Income - grants, gifts, donations, sponsorships, planned giving (will).
3. Earned Income - generated through fees and charges (program fee, rental fees, surcharges, permit fees.
4. Contractual Receipts - boat rental, instructional services, concessions.
5. Investment Income - money markets, stocks, mutual funds, or endowments.
63
List and define 5 types of Compulsory Income.
note: you are defining these in other note cards
1. Real Property Taxes - real property
2. Personal Property Tax - tangible (cars and furniture) and intangible (stock and bonds)
3. Sales
4. Excise Tax - imposed on specific goods and services (hotel, car rental, smoking)
5. Income Taxes
64
Real Property Tax
Tax assessed on land and anything built on it.
65
Who appraises Real Property Taxes?
Local assessor
66
At what rate is the Real Property Value assessed at in comparison to the Fair Market Value?
30 to 50% lower
67
Fair Market Value
The value the owner would get if the property was sold.
68
Assessed Valuation of the Property. Who does this?
Who sets the percentage utilized by the assessor?
Appraised Value by Local Assessor
State Legislation
69
Tax Base
Tax Base is multiplied by what?
Who sets this max limit that local governments can charge?
1. The total assessed value of all properties within a political jurisdiction.
2. tax rate
note: this is what the government can tax. booming economy vs. recession. fewer residents means less tax base. governments must know their tax base to control spending.
3. State Legislature
70
1. Mills
2. Unit (Millage Rate): 1 or $1 = what # of mills? or?
3. Property Tax Formula
4. The higher the millage rate (1, 10, 20), means what?
Best resource: https://finance.zacks.com/convert-mill-rate-taxes-3039.html
1. Another term for Tax Rate.
2. 1000 Mills or 1/1000th of the assessed property value.
3. Property tax levied on property = (mill rate x assessed property value) ÷ 1,000
4. The greater the resulting taxes.
71
Personal Property Taxes
1. Define
2. Are allowed in how many states?
1. They tax household and business tangible property (such as cars and furniture {if used to make money}) annually and intangible property (stocks and bonds).
2. 41
72
Sales Tax
Sale of tangible goods
73
What is the difference between Real and Personal Property Tax types?
Real Property Tax - land and buildings
Personal Property Tax - tangible and intangible goods.
74
Income Tax
taxes assessed on income earned
75
Gratuitous Income
Define and give 3 examples
Income received without expectation of return.
Ex: Grants, donations, and sponsorships
76
Give 3 examples of earned income.
Entrance, rental and user fees.
77
Contractual Receipts
Define and give 3 examples.
How do cities use this as a source of income?
Should require what 2 things and why?
Areas of services PNR agencies contract with outside vendors to provide a service they otherwise could not provide.
Boat rentals, concessions, and instructional services.
70/30 cut and annual fee
Security deposit to require faithful performance and liability with PNR agency marked as additionally insured.
78
Investment Income
Using money gained from the money market, stocks, and mutual funds to fund projects.
79
Expenditures - define and list 3 examples
Costs related to doing business. Utilities, supplies, equipment.
80
1. What type of budgeting system formats are used by PnR agencies?
2. Object or Budget Object - define
- 3 examples
3. Classification
- 3 examples
- Name a benefit of the classification of revenues and expenditures
4. Give an example of expenditures classified by an object. Which number is the classification and which numbers represent the objects?
1. the line-item-based, "Object-classification Budgeting System."
2. Item of financial cost such as personnel, supplies, equipment. Show on the budget as the actual invoiced amounts (ex: printing) or paycheck costs and listed under line items.
3. Uniform method of grouping like items together.
- contractural services, commodities, personnel services
- enables the comparison of expenditures for the objects to be made between departments, sub-functions, and cost control centers.
4. 1000: Services: Personnel
1100 Salaries, Regular (full time)
1200 Temporary (Part-Time)
1600 Contractural Employees
81
1. Cost-control Centers -
2. Financially, a cost-control center is a unit in which all financial transactions are organized...what? Doing this allows what?
3. In preparing an annual operating budget the object classification expenditures from all cost-control centers are what?
4. List 4 examples of cost-control centers.
5. List 4 examples of Subordinate Functions of a recreation department.
Those subordinate functions may also be considered what?
1. An agecys unit identified within its organizational structure led by a staff person responsible for its activities and budget.
2. Separately
The unit to compare the revenue generated by the unit to its expenses.
3. Added together to provide an estimate of the agency's total revenues and expenditures for the upcoming fiscal year.
4. Sports, Aquatics, Arts, Camps
5. Youth sports, adult sports, aquatic special events, and swim lessons.
Cost-control Centers
82
1. Budget Statement
2. Allocated Monies
3. Expended Monies
1. A report of allocated and expended monies.
2. Budgeted money.
3. Spent Dollars
83
1. Stack the Quote
2. What is the difference between a quote and Formal Bid?
3. List and define 2 forms of Formal Bids.
1. When staff select a business they want to choose and a few others that are higher-priced or are unable to supply the product.
2. Formal bids are for higher priced items.
3. Invitation for Bid - where vendors submit a sealed bid based on advertising specifications.
Request for Proposal (RFP) - a negotiated contract for goods and services with a vendor, detailing what they will do and at what cost.
84
1. Income Statements - Define and list the 3 key things it will include.
2. Cash-flow Statements
3. Balance Sheet
1. Show the profitability of a facility or 'cost center' during a period of time such as a month, quarter, or fiscal year.
Revenues, expenses, and net income (or net profit)
Note: this shows 'cost centers' aka subordinates.
2. This statement also examines revenues and expenditure, but more detail depicting whether cash flow is (+/-) and on a monthly basis.
note: this better shows or has more details on the cash flow It provides a better monthly comparison. It shows if you are operating in a positive or negative cash flow operation
3. a.k.a: Statements of Financial Position. Uses the accounting equation: Assets = Liabilities + Equity.
85
Assets
Liabilities
Equity
Assets - the economic resources the agency has (land, cash, inventory, furniture)
Liabilities - what the agency owes
Equity - portion of an organization that is owned clear of debt.
86
Project/Program Reports
Reports developed after a program is complete outlining the financial status.
87
Break-even Analysis
It can determine what 4 things?
Used to determine sources and amounts of revenue necessary for various participation levels.
Determines:
1. Loss
2. Break-even point
3. contribution margins
4. Amount of subsidization a program requires.
88
Petty Cash Funds typically do not exceed what amount?
Petty Cash Funds is designed for what?
List expenditures that may not be made from Petty Cash Funds.
$100
Small, quick purchases
Personal services, meals, or travel expenses
89
Staff in a busy facility will most likely do Room Counts...
Hourly
90
What is the difference between a Credit Card and P-Card? List 3 differences
CC billing statements are less detail
P-card must be paid in full at the end of each month whereas a credit card can carry over a balance.
Monthly use fees are higher for CC.
91
Excise Taxes
Imposed on specific goods and services such as hotel-motel taxes, car rental taxes, cigarettes, and alcohol
92
What type of tax is not unusual to be used for a specific purpose (fund visitor bureau or to build stadium).
Excise Tax
93
True or False: Raising fees at a public park agency likely requires no formal approval.
False
94
A soft drink vendor agrees to supply inventory for an event in exchange for the branding of its name is an example of what? matched funds, donation, grant, or sponsorship
Sponsorship
CPRP
flashcards
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