1|Page
GFOA CPFO CAPITAL AND OPERATING BUDGETING
(ACTUAL 2025/2026) EXAM QUESTIONS WITH
VERIFIED CORRECT ANSWERS
Capital Project Service-Level Goals - (answers)The means by which a local
government can illustrate to its citizens what level of service can be provided with
available resources.
Needs Assessment - (answers)This should address any gaps in service delivery and
form the basis for a capital projects request.
Public Participation Survey - (answers)Should be conducted every few years with
similar questions each time to gauge changing opinions. Questions should
therefore be developed with the anticipation that they will be used for many
years.
Public Participation Community Meetings - (answers)Speaking with community
groups will show the public that the jurisdiction is transparent and responsive and
will encourage citizens to become more involved with government.
Public Information Officer (PIO) - (answers)Often responsible for writing
newsletters and press releases, maintaining the jurisdictions website, and
answering inquiries from citizens.
Bond Committees - (answers)Formed for capital projects to provide feedback on
bond referendums.
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Bond Referendum - (answers)May be required under state law, is used to help
ensure the lowest cost financing, and or confirm the public's commitment to
proposed projects.
Bond Committee Members - (answers)Typically include former elected officials,
reps of other governing bodies, business and environmental leaders, community
activists, and clients of the service.
Bond Committee Responsibilities - (answers)Determining the size of the bond
program, ID'ing potential projects, holding public meetings, and producing a
report to elected officials.
Establishing Guiding Principles - (answers)Before prioritizing projects, the group
as a whole needs to define the broad guiding principles for the process. Examples
could include: equity, diversity, input, sustainability, quality of life, accountability,
or affordability.
Establishing Project Scope - (answers)Means defining the need or needs the
project is meant to address (temporarily or permanently), deciding how the needs
are to be addressed, identifying any other needs or goals that will be created by
the project, defining what the project should be like, and deciding what should
and should not be included in the project.
Scope Creep - (answers)Can increase the duration, complexity and cost of the
project with little and/or noticeable warning.
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Project Scope - (answers)Must be controlled by careful documentation and
project management. Before approval, scope should be defined by a detailed
narrative explanation with supporting back-up.
Project Budget - (answers)Will incorporate all of the costs associated with the
project, such as design, consultant fees, land acquisition, site preparation, and
project management expenses.
Construction Budget - (answers)Includes just the portion of the project costs that
are paid to the contractor(s).
Project Cost Estimates - (answers)More expensive or complex the project, the
more often a cost estimate should be developed.
Value Engineering - (answers)Systematic application of recognized techniques
which identify the function of a product or service, establish a value for that
function, and provide the necessary function at the least overall cost.
Capital Financing Costs - (answers)May be charged to the project and included in
the debt financing or may be separately funded through the operating budget.
Price Changes Over Time - (answers)A multi-year project will need to include
inflation factors during the construction period.
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Regional Inflation Indices - (answers)Generally more accurate than national
indices and will reflect regional labor and material prices.
Cost Estimation Pitfalls - (answers)Costs that are occasionally overlooked include
moving costs and inflation.
Marshall-Swift Index - (answers)Uses certain project attributes to arrive at an
estimated cost per square foot. This measure can then be applied to the total
area to calculate an estimated project cost.
Elements to Include in the Capital Budget - (answers)Definition of capital
expenditure, summary information, schedule of completion, descriptions of the
general scope of the project, impact on the operating budget, estimated project
cost, funding sources, funding authority, and any analytical information like cost-
benefit analysis.
Quality-based Process - (answers)Focuses on the knowledge, skills and experience
of the professional consultants to meet the projects needs.
Request for Qualifications - (answers)Similar to an RFP, except fee proposals are
not involved in the selection process.
Owner's Representative - (answers)Outside consultant with construction
expertise that will provide oversight, manage the project and coordinate activities
between all members of the project team, including the design professionals and
the contractors in the jurisdictions best interest.
GFOA CPFO CAPITAL AND OPERATING BUDGETING
(ACTUAL 2025/2026) EXAM QUESTIONS WITH
VERIFIED CORRECT ANSWERS
Capital Project Service-Level Goals - (answers)The means by which a local
government can illustrate to its citizens what level of service can be provided with
available resources.
Needs Assessment - (answers)This should address any gaps in service delivery and
form the basis for a capital projects request.
Public Participation Survey - (answers)Should be conducted every few years with
similar questions each time to gauge changing opinions. Questions should
therefore be developed with the anticipation that they will be used for many
years.
Public Participation Community Meetings - (answers)Speaking with community
groups will show the public that the jurisdiction is transparent and responsive and
will encourage citizens to become more involved with government.
Public Information Officer (PIO) - (answers)Often responsible for writing
newsletters and press releases, maintaining the jurisdictions website, and
answering inquiries from citizens.
Bond Committees - (answers)Formed for capital projects to provide feedback on
bond referendums.
,2|Page
Bond Referendum - (answers)May be required under state law, is used to help
ensure the lowest cost financing, and or confirm the public's commitment to
proposed projects.
Bond Committee Members - (answers)Typically include former elected officials,
reps of other governing bodies, business and environmental leaders, community
activists, and clients of the service.
Bond Committee Responsibilities - (answers)Determining the size of the bond
program, ID'ing potential projects, holding public meetings, and producing a
report to elected officials.
Establishing Guiding Principles - (answers)Before prioritizing projects, the group
as a whole needs to define the broad guiding principles for the process. Examples
could include: equity, diversity, input, sustainability, quality of life, accountability,
or affordability.
Establishing Project Scope - (answers)Means defining the need or needs the
project is meant to address (temporarily or permanently), deciding how the needs
are to be addressed, identifying any other needs or goals that will be created by
the project, defining what the project should be like, and deciding what should
and should not be included in the project.
Scope Creep - (answers)Can increase the duration, complexity and cost of the
project with little and/or noticeable warning.
,3|Page
Project Scope - (answers)Must be controlled by careful documentation and
project management. Before approval, scope should be defined by a detailed
narrative explanation with supporting back-up.
Project Budget - (answers)Will incorporate all of the costs associated with the
project, such as design, consultant fees, land acquisition, site preparation, and
project management expenses.
Construction Budget - (answers)Includes just the portion of the project costs that
are paid to the contractor(s).
Project Cost Estimates - (answers)More expensive or complex the project, the
more often a cost estimate should be developed.
Value Engineering - (answers)Systematic application of recognized techniques
which identify the function of a product or service, establish a value for that
function, and provide the necessary function at the least overall cost.
Capital Financing Costs - (answers)May be charged to the project and included in
the debt financing or may be separately funded through the operating budget.
Price Changes Over Time - (answers)A multi-year project will need to include
inflation factors during the construction period.
, 4|Page
Regional Inflation Indices - (answers)Generally more accurate than national
indices and will reflect regional labor and material prices.
Cost Estimation Pitfalls - (answers)Costs that are occasionally overlooked include
moving costs and inflation.
Marshall-Swift Index - (answers)Uses certain project attributes to arrive at an
estimated cost per square foot. This measure can then be applied to the total
area to calculate an estimated project cost.
Elements to Include in the Capital Budget - (answers)Definition of capital
expenditure, summary information, schedule of completion, descriptions of the
general scope of the project, impact on the operating budget, estimated project
cost, funding sources, funding authority, and any analytical information like cost-
benefit analysis.
Quality-based Process - (answers)Focuses on the knowledge, skills and experience
of the professional consultants to meet the projects needs.
Request for Qualifications - (answers)Similar to an RFP, except fee proposals are
not involved in the selection process.
Owner's Representative - (answers)Outside consultant with construction
expertise that will provide oversight, manage the project and coordinate activities
between all members of the project team, including the design professionals and
the contractors in the jurisdictions best interest.
