School Financial Leadership (D023)

Correct answer:

A. all taxpayers  

Explanation:

Public education is primarily funded through taxes, and laws require all taxpayers, regardless of whether they have children in public schools, to contribute. This broad base ensures adequate and consistent funding for education across communities.

Why other options are wrong:  

B: parents of school-age children  

While these parents directly benefit from public education, funding obligations are not limited to them. Restricting funding responsibility to only these parents would lead to inequities and underfunded schools. The broader taxpayer base ensures stability and fairness in the funding system.

C: wealthy citizens  

Although wealthier individuals may pay more in taxes due to progressive tax systems, funding laws do not exclusively target them. Requiring only the wealthy to fund education would be unsustainable and unfair, as education benefits society as a whole, and shared funding responsibility reflects that societal value.

D: public school graduates  

Graduates may have benefited from public education in the past, but current funding is based on present taxpayers. There is no legal framework that singles out graduates for public education funding. Instead, ongoing community support through taxation ensures current and future generations have access to education.

Correct Answer

B: Increase the budget for equipment by 5%

Explanation

To maintain the same purchasing power as the previous year amidst a 5% inflation increase, the principal should increase the budget for equipment by 5%. Inflation causes the general price level of goods and services to rise, meaning that to purchase the same quantity of equipment, more funds are required. Increasing the budget by 5% will help offset the effects of inflation, ensuring the school can continue to purchase the same equipment at the same price level.

Why other options are wrong

A. Reduce the budget for equipment by 5%

This is incorrect because reducing the budget by 5% would reduce the purchasing power, leading to a shortage of funds to buy the same equipment, as inflation would increase the cost of purchasing those items.

C. Keep the budget for equipment the same

This is incorrect because keeping the budget the same would mean that the school would not be able to maintain the same purchasing power. With inflation driving up prices, maintaining the same budget would result in the inability to purchase the same amount of equipment.

D. Increase the budget for equipment by 10%

This is incorrect because while increasing the budget by 10% would compensate for inflation, it would go beyond the necessary adjustment. A 5% increase would suffice to maintain the same purchasing power without exceeding the needed amount.

Correct answer:

D. encumbrances

Explanation:

Encumbrances represent commitments related to unperformed contracts or purchase orders. They help track planned expenditures before the actual payment occurs, allowing for better budget control and financial planning.

Why other options are wrong:  

A: estimated uses  

This term lacks a formal definition in financial reporting and does not accurately describe the legally binding nature of a purchase order or contract. It’s too vague and general to be used in this context.

B: appropriations  

Appropriations refer to the legal authorization to spend a certain amount of funds, not the actual commitment or anticipated expenditure. They are more about budget authority than tracking specific expected costs.

C: expenses  

Expenses are recorded when the goods or services have been received. Encumbrances, on the other hand, occur earlier in the process—when the commitment to spend is made. Therefore, this term reflects a different point in the financial lifecycle.

Correct Answer

B. It creates a conflict of interest.

Explanation

A school administrator selling items like candy bars to fund textbooks can lead to a conflict of interest, especially if personal gain or influence is involved. Administrators must maintain impartiality and follow formal budgeting and procurement processes to uphold transparency and ethical standards in educational leadership.

Why other options are wrong

A. It diverts funds from essential school programs.

This is not accurate unless the fundraising directly reduces resources meant for other programs. In most cases, fundraising is an additive effort, not a diversion of allocated funds.

C. It violates district fundraising policies.

This could be true in some contexts, but the question does not specify any policy violation. The ethical concern is broader and centers on conflict of interest, not rule-breaking.

D. It undermines the integrity of educational funding.

While informal fundraising may raise concerns, the deeper ethical issue is the administrator’s role and whether personal involvement creates biased decisions or the appearance of impropriety.

Correct Answer

A: It ensures that the purchase is documented and approved according to school policy

Explanation

Completing a purchase requisition is a key step in ensuring that the purchase is properly documented and follows the school's financial procedures. It allows the necessary approvals to be obtained and ensures that the expenditure aligns with the school’s budget and policies, maintaining financial accountability and transparency.

Why other options are wrong

B. It allows teachers to bypass the principal's approval

This is incorrect because a purchase requisition actually ensures that the principal’s approval is obtained before any purchases are made. It does not allow teachers to bypass the approval process.

C. It guarantees that the item will be delivered immediately

This is incorrect because a purchase requisition is part of the administrative process that authorizes a purchase. It does not guarantee the immediate delivery of items. Delivery depends on supplier processes and school procurement procedures.

D. It enables teachers to use personal funds for school purchases

This is incorrect because a purchase requisition is part of the formal school purchasing process, which involves using school funds. It does not involve using personal funds for school purchases. The purpose of the requisition is to ensure that purchases are made through the appropriate school channels.

Correct answer:

B. To record revenues and expenses when they are incurred  

Explanation:

Accrual accounting recognizes revenues and expenses when they are earned or incurred, regardless of when cash transactions happen. This method provides a more accurate picture of a school’s financial performance and obligations over time.

Why other options are wrong:  

A: To track cash flow in real-time  

Real-time cash tracking is a feature of cash accounting, not accrual accounting. Accrual accounting focuses on economic events rather than cash movement.

C: To prepare tax returns for the school  

Schools, especially public ones, are generally tax-exempt and do not use accrual accounting primarily for tax purposes. This answer confuses the purpose of accrual systems.

D: To allocate budgeted funds for future expenses  

This is the role of encumbrance accounting, not accrual accounting. Accrual accounting records what is owed and earned, not what is reserved.

Correct Answer

D: Vouchers may segregate students by socioeconomic class

Explanation

Ruby is likely to argue that school vouchers can exacerbate socioeconomic segregation in education. Vouchers allow students to use public funds for private schooling, often leading to an increased division between wealthier families who can afford additional tuition and lower-income families who cannot. This could result in further separation based on socioeconomic status, limiting opportunities for equitable access to quality education.

Why other options are wrong

A. Vouchers could remedy existing problems in public schools

This is incorrect because Ruby is arguing against the use of school vouchers, not in favor of them. She would not likely argue that vouchers remedy existing problems in public schools but rather that they could undermine the effectiveness of public education.

B. Vouchers may allow students to receive their state funding allotment

While vouchers can allow students to take their state funding to private schools, this point does not directly relate to Ruby's argument against vouchers. Ruby's focus would more likely be on the social and educational consequences rather than just the allocation of funds.

C. Vouchers could direct attention to the legitimate problems of public schools

This is incorrect because Ruby would be arguing that vouchers could shift attention away from solving public school problems by funneling funds into private schools. The focus would be on the negative impacts, rather than any positive redirection of attention.

Correct Answer

B. Evaluating program outcomes and alternatives that may achieve the same goals

Explanation

PPBS is a results-oriented budgeting approach that emphasizes evaluating the outcomes of programs and identifying different ways to achieve educational goals. The aim is to allocate resources efficiently based on performance, priorities, and long-term planning rather than on tradition or precedent. It supports data-driven decision-making and continuous improvement.

Why other options are wrong

A. Establishing a fixed budget without adjustments

A fixed budget contradicts the adaptive nature of PPBS. This budgeting system is meant to be flexible and responsive to the effectiveness of programs and changing needs.

C. Focusing solely on historical spending patterns

PPBS is forward-looking, emphasizing future goals and performance evaluation. Relying only on past spending fails to align with its strategic planning aspect.

D. Allocating funds based on seniority of staff

This approach is tied more to personnel policy than budgeting strategy. PPBS focuses on program effectiveness, not personnel hierarchy.

Correct answer:

B. School board  

Explanation:

The school board holds the ultimate authority in financial oversight and budget approval for a school district. They adopt the final budget, ensure compliance with legal requirements, and monitor expenditures.

Why other options are wrong:  

A: Principal  

Principals may manage site-level budgets but do not have authority over the district’s financial operations or budget approval. Their role is more focused on implementing the approved budget within their schools.

C: Superintendent  

Superintendents recommend and implement budgets, but they operate under the oversight of the school board, which must approve any budget proposals. They are responsible for administration, not governance.

D: Local voters  

While local voters may approve tax levies or bond issues, they do not oversee day-to-day financial management or the detailed budget process. That responsibility lies with the elected school board.