CMFO UPDATED EXAM 2026 SCRIPT QUESTIONS AND
SOLUTIONS RATED A+
✔✔Which of the following is known as, in the current section of accounts shall consist of
the excess of quick assets such as cash, investments, State or other public aid
receivable, and deferred charges over legal and demand liabilities. - ✔✔Surplus
✔✔Which of the following is known as; revenue amounts that may reasonably be
expected to be realized in cash during the fiscal year from known and regular sources,
or from sources reasonably capable of anticipation. - ✔✔Miscellaneous Revenues
Anticipated
✔✔Miscellaneous revenues when being anticipated in the municipal budget are
regulated by N.J.S.A 40:4-26. This section of the statue limits anticipated revenues to
the amount : - ✔✔Actually realized in cash from the same source in the next preceding
fiscal year
✔✔A municipal governing body has determined that a parcel of land is no longer
required for public use and so concluded that said parcel be sold at auction. The parcel
of land will generate sale proceeds that would benefit town property owners if
anticipated in the municipal budget as a revenue. In order for the proceeds to be an
anticipated revenue in the budget the obligation to make payment to the municipality
must be entered into: - ✔✔Prior to adoption of the budget
✔✔When a municipality has a sinking fund cash surplus, such surplus may, upon
written application by the sinking fund commission and the approval of the director, be
used, in whole or in part, as which of the following according to N.J.S.A 40A:4-28. -
✔✔An anticipated miscellaneous revenue in current fund budget
✔✔N.J.S.A 40A:4-30 describes the amount to be raised by taxes as the amount
required to be levied by taxation for support of the municipal budget. It is the difference
between the total of all general municipal budget appropriations, including chapter 6
school debt service, and such deferred charges and statutory expenditures for chapter 6
schools as are required to be raised in the municipal budget, less the total of anticipated
revenues. - ✔✔True
✔✔To the extent there is available surplus revenue collected by a municipality for
supplying a utility service which is regulated by the Board of Public Utilities an amount
of this utility surplus may be transferred annually and included in the local municipal
budget. This amount of the surplus to be utilized may not exceed what percentage of
the annual costs of operation of the utility? - ✔✔Five percent
✔✔Dedicated revenues stated in the budget shall be classified according to their
respective sources and shall be stated in a separate section of the budget, together with
,the appropriations to the purposes to which such dedicated revenues are applicable.
The total of anticipated revenues must equal the total of appropriations. This definition
would describe which of the following: - ✔✔Trust Fund accounts
✔✔Which of the following would meet the standard to qualify as a dedicated revenue
(Trust)?
a) Animal Control Fund
b) Sinking Fund for term bonds
c) A bequest
d) Motor vehicle fines dedicated to road repairs
e) All of the above - ✔✔e) All of the above
✔✔An appropriation for "cash deficit of preceding year" shall be raised how? - ✔✔In full
in the immediate successive year of the deficit
✔✔N.J.S.A. 40A:4-45.2a authorizes that amounts of revenue generated by an increase
in its valuations based solely on applying the preceding year's local purposes tax rate of
the municipality to the assessed value of new construction or improvements will result in
which of the following? - ✔✔Increase in "CAP" base
✔✔Which of the following groups of appropriations are exceptions to the budget "CAP",
or also known as outside "CAP" appropriations?
a) Debt service, capital expenditures, amounts expended to fund a free public library
b) Reserve for uncollected taxes, social security, federal grants, amounts to meet New
Jersey Public Employees' Occupational Safety and Health Act
c) Public Employees Retirement System, expenditures resulting from the impact of a
hazardous waste facility, municipal court
d) All of the above - ✔✔a) Debt service, capital expenditures, amounts expended to
fund a free public library
✔✔T/F - Unless emergency expenditures are eligible for bonding pursuant to the Local
Bond Law, said expenditures shall be provided in full by the governing body as a
deferred charge in the budget of the next succeeding fiscal year. - ✔✔True
✔✔A resolution authorizing the adoption of an emergency appropriation shall be
adopted by what vote of the municipal governing body? - ✔✔Two-thirds vote of the full
membership of the governing body
✔✔The governing body of a New Jersey municipality has appointed a purchasing agent
holding a Qualified Purchasing Agent certification and authorized a local bidding
threshold of $29,000. The purchasing agent wishes to award a professional service
agreement for $15,000. Pursuant to N.J.S.A 40A:11-3b, the contract period may not
exceed what length of time? - ✔✔Twelve months
,✔✔T/F - Every contract for goods and services that in the aggregate exceeds the bid
threshold shall be awarded to the lowest responsible bidder. N.J.S.A 40A:11-4 permits
the governing body to reject the lowest bidder if the governing body is made aware of
"prior negative experience" with any local contracting unit in New Jersey - ✔✔False
✔✔T/F - N.J.S.A 40A:11-4.1 authorizes the use of competitive contracting in lieu of
public bidding. Competitive contracting may be used for all types of goods and services.
- ✔✔False
✔✔Contracts awarded by competitive contracting may not be for a term exceeding what
length of time, unless there is an authorized exception?
a) One year
b) Two years
c) Three years
d) Four years
e) None of the above - ✔✔e) None of the above
✔✔T/F - When competitive contracting is authorized by a resolution of the governing
body, it is necessary to pass a resolution each time specialized goods and services are
desired. - ✔✔True
✔✔The methodology used in the evaluation of proposals submitted under the process
of competitive contracting must include the following:
a) Technical criteria
b) Cost related criteria
c) Management
d) b & c only
e) All of the above - ✔✔e) All of the above
✔✔Currently the City of Trenton operates a public water utility. Due to budget
considerations the City would like to solicit proposals for the operation of the utility using
competitive contracting. As required by the Local Public Contracts Law the City will be
required to do which of the following regarding affected employees? - ✔✔Notify affected
employees
✔✔A local contracting unit has advertised for the same good or service on two
occasions. On one occasion no bids were received and on one occasion all bids were
rejected because of price. The local contracting unit is now permitted to proceed in
which of the following methods? - ✔✔Negotiate and award contract by a two-thirds
affirmative vote of the governing body
✔✔T/F - A New Jersey municipality has a fleet of police cars exceeding fifty vehicles.
One of the vehicles is damaged beyond repair in a motor vehicle accident. The Police
Chief recommends authorizing the purchase of a replacement vehicle as an
, "emergency purchase", which purchases are authorized by 40A:11-6. Since this vehicle
is used for public safety it may be purchased without public bidding or prior governing
body approval. - ✔✔False
✔✔T/F - When in excess of the bid threshold, and after documented effort by the
contracting agent to secure competitive quotations, a contract for extraordinary
unspecifiable services may be awarded upon a determination in writing by the
contracting agent that the solicitation of competitive quotations are impracticable. Any
such contract shall be awarded by resolution of the governing body. - ✔✔True
✔✔When preparing specifications for the provision of goods or performance of services
no specifications under the Local Public Contracts Law N.J.S.A. 40A:11-13 may:
a) Stipulate a residency requirement
b) Stipulate a standard not directly related to the purpose of the contract being bid
c) Stipulate the furnishing of any "brand name"
d) All the above
e) None of the above - ✔✔d) All the above
✔✔A contracting unit may reject all bids for which of the following reasons:
a) The governing body of the contracting unit decides to abandon the project
b) The governing body of the contracting unit decides to use the State authorized
contract
c) The lowest bid substantially exceeds the contracting unit's appropriation
d) All the above
e) None of the above - ✔✔d) All the above
✔✔The Township of Lawrence is having plans prepared for the construction of a new
police facility. According to N.J.S.A. 40A:11-16 when the entire cost of this type of
project will exceed the bid threshold separate plans and specifications may be prepared
for which of the following:
a) Electrical work
b) Structural steel work
c) Plumbing work
d) All the above
e) None of the above - ✔✔d) All the above
✔✔Local units entering into contract in excess of $100,000 for the improvement of real
property are permitted to withhold a percentage of partial payments if agreed to by the
contractor. The maximum amount that may be withheld pursuant to N.J.S.A 40A:11-
16.3 is: - ✔✔Two percent
✔✔When a Local Unit is publicly bidding construction or improvements to real property
and the total price will exceed $100,000 the bidder shall furnish a bid guarantee. The
SOLUTIONS RATED A+
✔✔Which of the following is known as, in the current section of accounts shall consist of
the excess of quick assets such as cash, investments, State or other public aid
receivable, and deferred charges over legal and demand liabilities. - ✔✔Surplus
✔✔Which of the following is known as; revenue amounts that may reasonably be
expected to be realized in cash during the fiscal year from known and regular sources,
or from sources reasonably capable of anticipation. - ✔✔Miscellaneous Revenues
Anticipated
✔✔Miscellaneous revenues when being anticipated in the municipal budget are
regulated by N.J.S.A 40:4-26. This section of the statue limits anticipated revenues to
the amount : - ✔✔Actually realized in cash from the same source in the next preceding
fiscal year
✔✔A municipal governing body has determined that a parcel of land is no longer
required for public use and so concluded that said parcel be sold at auction. The parcel
of land will generate sale proceeds that would benefit town property owners if
anticipated in the municipal budget as a revenue. In order for the proceeds to be an
anticipated revenue in the budget the obligation to make payment to the municipality
must be entered into: - ✔✔Prior to adoption of the budget
✔✔When a municipality has a sinking fund cash surplus, such surplus may, upon
written application by the sinking fund commission and the approval of the director, be
used, in whole or in part, as which of the following according to N.J.S.A 40A:4-28. -
✔✔An anticipated miscellaneous revenue in current fund budget
✔✔N.J.S.A 40A:4-30 describes the amount to be raised by taxes as the amount
required to be levied by taxation for support of the municipal budget. It is the difference
between the total of all general municipal budget appropriations, including chapter 6
school debt service, and such deferred charges and statutory expenditures for chapter 6
schools as are required to be raised in the municipal budget, less the total of anticipated
revenues. - ✔✔True
✔✔To the extent there is available surplus revenue collected by a municipality for
supplying a utility service which is regulated by the Board of Public Utilities an amount
of this utility surplus may be transferred annually and included in the local municipal
budget. This amount of the surplus to be utilized may not exceed what percentage of
the annual costs of operation of the utility? - ✔✔Five percent
✔✔Dedicated revenues stated in the budget shall be classified according to their
respective sources and shall be stated in a separate section of the budget, together with
,the appropriations to the purposes to which such dedicated revenues are applicable.
The total of anticipated revenues must equal the total of appropriations. This definition
would describe which of the following: - ✔✔Trust Fund accounts
✔✔Which of the following would meet the standard to qualify as a dedicated revenue
(Trust)?
a) Animal Control Fund
b) Sinking Fund for term bonds
c) A bequest
d) Motor vehicle fines dedicated to road repairs
e) All of the above - ✔✔e) All of the above
✔✔An appropriation for "cash deficit of preceding year" shall be raised how? - ✔✔In full
in the immediate successive year of the deficit
✔✔N.J.S.A. 40A:4-45.2a authorizes that amounts of revenue generated by an increase
in its valuations based solely on applying the preceding year's local purposes tax rate of
the municipality to the assessed value of new construction or improvements will result in
which of the following? - ✔✔Increase in "CAP" base
✔✔Which of the following groups of appropriations are exceptions to the budget "CAP",
or also known as outside "CAP" appropriations?
a) Debt service, capital expenditures, amounts expended to fund a free public library
b) Reserve for uncollected taxes, social security, federal grants, amounts to meet New
Jersey Public Employees' Occupational Safety and Health Act
c) Public Employees Retirement System, expenditures resulting from the impact of a
hazardous waste facility, municipal court
d) All of the above - ✔✔a) Debt service, capital expenditures, amounts expended to
fund a free public library
✔✔T/F - Unless emergency expenditures are eligible for bonding pursuant to the Local
Bond Law, said expenditures shall be provided in full by the governing body as a
deferred charge in the budget of the next succeeding fiscal year. - ✔✔True
✔✔A resolution authorizing the adoption of an emergency appropriation shall be
adopted by what vote of the municipal governing body? - ✔✔Two-thirds vote of the full
membership of the governing body
✔✔The governing body of a New Jersey municipality has appointed a purchasing agent
holding a Qualified Purchasing Agent certification and authorized a local bidding
threshold of $29,000. The purchasing agent wishes to award a professional service
agreement for $15,000. Pursuant to N.J.S.A 40A:11-3b, the contract period may not
exceed what length of time? - ✔✔Twelve months
,✔✔T/F - Every contract for goods and services that in the aggregate exceeds the bid
threshold shall be awarded to the lowest responsible bidder. N.J.S.A 40A:11-4 permits
the governing body to reject the lowest bidder if the governing body is made aware of
"prior negative experience" with any local contracting unit in New Jersey - ✔✔False
✔✔T/F - N.J.S.A 40A:11-4.1 authorizes the use of competitive contracting in lieu of
public bidding. Competitive contracting may be used for all types of goods and services.
- ✔✔False
✔✔Contracts awarded by competitive contracting may not be for a term exceeding what
length of time, unless there is an authorized exception?
a) One year
b) Two years
c) Three years
d) Four years
e) None of the above - ✔✔e) None of the above
✔✔T/F - When competitive contracting is authorized by a resolution of the governing
body, it is necessary to pass a resolution each time specialized goods and services are
desired. - ✔✔True
✔✔The methodology used in the evaluation of proposals submitted under the process
of competitive contracting must include the following:
a) Technical criteria
b) Cost related criteria
c) Management
d) b & c only
e) All of the above - ✔✔e) All of the above
✔✔Currently the City of Trenton operates a public water utility. Due to budget
considerations the City would like to solicit proposals for the operation of the utility using
competitive contracting. As required by the Local Public Contracts Law the City will be
required to do which of the following regarding affected employees? - ✔✔Notify affected
employees
✔✔A local contracting unit has advertised for the same good or service on two
occasions. On one occasion no bids were received and on one occasion all bids were
rejected because of price. The local contracting unit is now permitted to proceed in
which of the following methods? - ✔✔Negotiate and award contract by a two-thirds
affirmative vote of the governing body
✔✔T/F - A New Jersey municipality has a fleet of police cars exceeding fifty vehicles.
One of the vehicles is damaged beyond repair in a motor vehicle accident. The Police
Chief recommends authorizing the purchase of a replacement vehicle as an
, "emergency purchase", which purchases are authorized by 40A:11-6. Since this vehicle
is used for public safety it may be purchased without public bidding or prior governing
body approval. - ✔✔False
✔✔T/F - When in excess of the bid threshold, and after documented effort by the
contracting agent to secure competitive quotations, a contract for extraordinary
unspecifiable services may be awarded upon a determination in writing by the
contracting agent that the solicitation of competitive quotations are impracticable. Any
such contract shall be awarded by resolution of the governing body. - ✔✔True
✔✔When preparing specifications for the provision of goods or performance of services
no specifications under the Local Public Contracts Law N.J.S.A. 40A:11-13 may:
a) Stipulate a residency requirement
b) Stipulate a standard not directly related to the purpose of the contract being bid
c) Stipulate the furnishing of any "brand name"
d) All the above
e) None of the above - ✔✔d) All the above
✔✔A contracting unit may reject all bids for which of the following reasons:
a) The governing body of the contracting unit decides to abandon the project
b) The governing body of the contracting unit decides to use the State authorized
contract
c) The lowest bid substantially exceeds the contracting unit's appropriation
d) All the above
e) None of the above - ✔✔d) All the above
✔✔The Township of Lawrence is having plans prepared for the construction of a new
police facility. According to N.J.S.A. 40A:11-16 when the entire cost of this type of
project will exceed the bid threshold separate plans and specifications may be prepared
for which of the following:
a) Electrical work
b) Structural steel work
c) Plumbing work
d) All the above
e) None of the above - ✔✔d) All the above
✔✔Local units entering into contract in excess of $100,000 for the improvement of real
property are permitted to withhold a percentage of partial payments if agreed to by the
contractor. The maximum amount that may be withheld pursuant to N.J.S.A 40A:11-
16.3 is: - ✔✔Two percent
✔✔When a Local Unit is publicly bidding construction or improvements to real property
and the total price will exceed $100,000 the bidder shall furnish a bid guarantee. The
