Texas State Budgeting and Financial Administration

Review flashcards for Texas state government budgeting, financial administration, budget monitoring, calculations, Medicaid/CHIP financial concepts, and financial reporting systems.

What is the Texas state budget?

The state's financial plan that authorizes funding for government programs, agencies, and services over a two-year biennium.

What is a biennium?

A two-year budget period. Texas state budgets generally cover two fiscal years.

What is the General Appropriations Act (GAA)?

The law passed by the Legislature that appropriates funding to state agencies and programs.

What is the Legislative Budget Board (LBB)?

A permanent legislative agency that supports the Texas Legislature in developing and reviewing the state budget and evaluating government performance.

What is the Governor's Office of Budget, Planning and Policy (GOBPP)?

The Governor's office that participates in developing and reviewing budget recommendations and monitoring budget matters.

What is a Legislative Appropriations Request (LAR)?

A state agency's formal request to the Legislature for funding and staffing authority for its programs and operations.

What is the purpose of the LAR?

To explain an agency's funding needs, current operations, requested resources, exceptional items, and performance goals.

What is the difference between an LAR and the GAA?

The LAR is what an agency requests; the GAA is the appropriations law that establishes what funding is authorized.

What is an agency operating budget?

A detailed plan for how an agency intends to use its appropriated resources during the fiscal year.

What is the difference between an operating budget and the GAA?

The GAA establishes legal appropriations; the operating budget provides more detailed planning and allocation for carrying out agency operations within those appropriations.

What is the typical Texas state budget cycle?

Agency strategic planning and LAR preparation, legislative review, passage of the GAA, budget implementation, monitoring, and reporting.

When does the Texas Legislature generally meet in regular session?

In odd-numbered years, beginning in January, for up to $140\text{ days}$.

What is the Biennial Revenue Estimate (BRE)?

The Texas Comptroller's estimate of the revenue available to finance the state budget for the upcoming biennium.

Why is the Biennial Revenue Estimate important?

It helps determine the amount of revenue available for the Legislature to appropriate.

What is a budget hearing?

A meeting where an agency explains its budget request, program needs, performance, and financial requirements to decision-makers.

What is a conference committee in the budget process?

A committee that works to resolve differences between the House and Senate versions of a bill, including the appropriations bill.

What happens after the Legislature passes the GAA?

The bill is sent through the certification and gubernatorial review process before becoming law.

What is budget execution?

Managing and monitoring appropriated funds after the budget is enacted to ensure resources are used appropriately and remain within legal authority.

Why must an agency monitor its budget throughout the year?

To identify spending risks, forecast future needs, manage available funding, comply with appropriations, and prevent deficits or unauthorized expenditures.

What is an appropriation?

Legal authority to spend public funds for an approved purpose, subject to applicable restrictions.

What is a strategy in a state agency budget?

A defined program or service area used to organize funding and performance information.

What is a method of finance (MOF)?

The funding source used to finance an appropriation, such as General Revenue or federal funds.

What is General Revenue?

A major source of state funding derived from state revenues that may be appropriated for authorized purposes.

What are federal funds in a state budget?

Funds provided by the federal government, often subject to federal program requirements, eligibility rules, and matching requirements.

What is a rider in the GAA?

A provision that adds instructions, restrictions, reporting requirements, or other conditions to an appropriation.

What is an exceptional item in an LAR?

A request for resources beyond the agency's base-level funding request, often to address new needs, increased costs, or expanded services.

What is a base-level request in an LAR?

The agency's request for funding to continue its existing operations and obligations, as defined by the applicable LAR instructions.

What is an FTE?

A full-time equivalent, a measure of authorized staffing workload rather than necessarily a count of individual employees.

What is a budget lapse?

Funding or spending authority that is not used during the applicable period and expires or reverts according to the governing rules.

What is a budget reallocation?

Moving resources between authorized budget categories or activities when permitted by applicable laws, appropriations, and approval requirements.

What is a budget transfer?

A movement of budget authority or funding between accounts, strategies, categories, or other budget structures, subject to applicable rules and approvals.

What is a budget journal?

A financial system entry used to record an authorized budget-related transaction or adjustment.

What is a certification in budget administration?

A formal confirmation that specified information, funding, or compliance requirements have been reviewed and meet applicable standards.

What is a fiscal note?

An analysis of the estimated financial effect of proposed legislation on state or local government.

What is a performance measure?

A metric used to evaluate program outputs, outcomes, efficiency, or effectiveness.

Why must an agency's budget request be supported by data?

Data helps justify funding needs, demonstrate program demand, estimate costs, and explain expected results.

What is the relationship between an agency's strategic plan and its LAR?

The strategic plan identifies goals and priorities; the LAR requests the resources needed to support the agency's programs and objectives.

What should a budget analyst review when evaluating an exceptional item?

The need, supporting data, cost assumptions, funding source, staffing impact, implementation timeline, and expected results.

What is budget monitoring?

Comparing budget authority, actual expenditures, commitments, and forecasts to assess financial performance and identify risks.

What is a budget variance?

The difference between a budgeted or planned amount and the actual amount.

What is a favorable budget variance?

A variance that is beneficial relative to the budget or objective. For expenditures, spending below budget is often favorable, but the cause and program impact must be considered.

What is an unfavorable budget variance?

A variance that is adverse relative to the budget or objective. For expenditures, spending above budget is often unfavorable.

What is forecasting?

Estimating future expenditures, revenues, staffing costs, or funding needs using current data, historical patterns, and known future changes.

What is a run-rate forecast?

A projection based on the current pace of spending or activity, adjusted when appropriate for known future changes.

What is a year-end forecast?

An estimate of the total amount expected to be spent or received by the end of the fiscal year.

What is an encumbrance?

A commitment of funds for a planned or obligated purchase or payment that has not yet been recorded as an actual expenditure.

Why should encumbrances be included in budget monitoring?

They represent commitments that may consume available budget even though the cash payment or expenditure may not yet be recorded.

What is the difference between an actual expenditure and an encumbrance?

An actual expenditure has been recorded as an expense or expenditure; an encumbrance represents a commitment for a future expenditure.

What is the difference between a budget and a forecast?

A budget is the approved or planned financial framework; a forecast estimates what is likely to happen based on current information.

What is a corrective action plan in financial monitoring?

A documented plan identifying problems, required corrections, responsible parties, and timelines for resolving financial or compliance issues.

What should a budget analyst do when spending is trending above budget?

Validate the data, identify the drivers, update the forecast, quantify the projected shortfall, assess options within legal authority, and communicate the risk promptly.

What should a budget analyst do when spending is below budget?

Determine whether the variance reflects savings, delayed activity, vacancies, timing differences, or under-delivery of services before recommending action.

What is a financial trend analysis?

Reviewing financial data over time to identify patterns, changes, unusual activity, and potential future risks.

Why are monthly financial reports useful?

They help management compare actual results with plans, monitor spending, identify unusual changes, and take corrective action.

What should be included in a budget variance explanation?

The amount and percentage of the variance, the reason, whether it is temporary or ongoing, the forecast impact, and the proposed response.

How can historical data improve a forecast?

It provides a baseline for expected spending and helps identify recurring patterns, seasonality, and unusual deviations.

Why should a forecast document its assumptions?

To make the estimate transparent, explain uncertainty, support review, and allow others to reproduce or update the analysis.

How do you calculate a dollar variance?

Actual amount minus budgeted amount, or forecast amount minus budgeted amount, depending on the comparison being made. State which convention is being used.

How do you calculate percentage variance?

$$\frac{\text{Actual amount} - \text{Budgeted amount}}{\text{Budgeted amount}} \times 100$$

An agency has a $\$10\text{ million}$ budget and spends $\$8\text{ million}$. How much budget remains before considering encumbrances?

$\$2\text{ million}$.

An agency has a $\$10\text{ million}$ budget, $\$8\text{ million}$ in actual expenditures, and $\$1\text{ million}$ in encumbrances. How much remains uncommitted?

$\$1\text{ million}$, assuming the encumbrances are included in the same budget and are not already counted in actual expenditures.

An agency has a $\$12\text{ million}$ budget, $\$7.5\text{ million}$ in actual expenditures, $\$1\text{ million}$ in encumbrances, and a forecast of $\$4\text{ million}$ in additional spending beyond those amounts. What is projected total spending?

$\$12.5\text{ million}$ (\7.5\text{ million}\text{ actual} + \$1\text{ million}\text{ encumbrances} + \$4\text{ million}\text{ additional forecast spending}$).

Using an agency with a $\$12\text{ million}$ budget and projected total spending of $\$12.5\text{ million}$, what is the projected shortfall?

$\$500{,}000$, because projected total spending of $\$12.5\text{ million}$ exceeds the $\$12\text{ million}$ budget by $\$500{,}000$.

An agency budget is $\$5\text{ million}$ and its forecast is $\$4.5\text{ million}$. What is the projected expenditure variance?

$\$500{,}000$ below budget, or $10\%$ below budget.

A program budget is $\$2\text{ million}$ and actual spending is $\$2.2\text{ million}$. What is the expenditure variance?

$\$200{,}000$ over budget, or $10\%$ above budget.

A program spends $\$300{,}000$ per month. What is its simple six-month spending projection at the same rate?

$\$1.8\text{ million}$, assuming the monthly rate remains constant and no adjustments are needed.

Why should a simple run-rate forecast sometimes be adjusted?

Because spending can change due to seasonality, hiring, contract schedules, eligibility changes, one-time costs, program demand, or funding restrictions.

A $\$4\text{ million}$ budget has $\$1\text{ million}$ in actual spending and $\$500{,}000$ in encumbrances. What is the amount not yet spent or committed?

$\$2.5\text{ million}$, assuming the amounts are non-overlapping and all relate to the same budget.

What is the first step when a financial calculation produces an unexpected result?

Validate the source data, period, definitions, formulas, and whether amounts such as encumbrances are already included elsewhere.

What is Medicaid?

A joint federal-state program that provides health coverage to eligible groups under federal law and state plan requirements.

What is CHIP?

The Children's Health Insurance Program, which provides health coverage to eligible children in families that meet program requirements.

What is the role of Texas HHSC in Medicaid and CHIP?

HHSC administers major aspects of Texas Medicaid and CHIP, including program operations, oversight, and financial administration.

Why are Medicaid and CHIP budgets complex?

They involve eligibility, enrollment, utilization, provider payments, federal matching funds, state funding, policy requirements, and changing health care costs.

What is federal matching funding?

Federal funding that contributes a specified share of eligible program expenditures under applicable federal rules.

What does FMAP stand for, and what is its role?

Federal Medical Assistance Percentage; it is the federal matching percentage generally used for eligible Medicaid expenditures.

Does every Medicaid expenditure receive the same federal matching rate?

No. The applicable rate depends on the type of expenditure, eligibility category, program rules, and other applicable provisions.

What is the state share of Medicaid spending?

The portion of eligible Medicaid expenditures financed by state or other nonfederal sources rather than federal matching funds.

Why is the funding source important in Medicaid budgeting?

Because federal and state funds have different eligibility rules, matching requirements, restrictions, and reporting requirements.

What factors can increase Medicaid expenditures?

Higher enrollment, increased service utilization, provider rate changes, medical cost inflation, policy changes, and changes in the mix of services.

What factors can affect CHIP expenditures?

Enrollment changes, health care utilization, provider rates, medical inflation, program policy, and the applicable federal-state funding structure.

What is an enrollment forecast?

An estimate of future program participation used to help project costs and operational needs.

How can enrollment affect a Medicaid budget?

More eligible participants can increase projected costs, although the impact depends on utilization, service mix, eligibility, and per-member costs.

What is per-member-per-month (PMPM) cost?

An average cost measure calculated per enrolled member per month, often used in health program financial analysis.

How can a budget analyst use PMPM data?

To track cost trends, compare periods, analyze program changes, and develop forecasts when the measure is appropriate for the population and services being analyzed.

What is a federal funds compliance risk?

The risk that expenditures fail to meet federal eligibility, allowability, documentation, allocation, or reporting requirements.

Why is accurate expenditure allocation important in federally funded programs?

It helps ensure costs are charged to the proper program and funding source and meet applicable legal and grant requirements.

What should a budget analyst do if a federal funding assumption changes?

Verify the new requirement, quantify the effect on federal and state funding, update forecasts, document assumptions, and escalate material impacts.

How would you investigate a sudden increase in Medicaid spending?

Validate the data, compare spending by service, provider, eligibility group, and period, assess enrollment and utilization, review policy or rate changes, and update the forecast.

What is the difference between a funding source and a program strategy?

A funding source identifies where the money comes from; a strategy identifies the program or activity the money supports.

What is CAPPS?

The Centralized Accounting and Payroll/Personnel System used by Texas state agencies for supported financial and human resources functions.

What is USAS?

The Uniform Statewide Accounting System, used for statewide accounting and financial reporting functions.

What is HHSAS Financials?

A financial system environment used within Texas Health and Human Services for applicable accounting and financial processes.

What is Cognos used for in financial analysis?

Reporting and analysis, including reviewing financial information and producing reports, depending on the agency's implementation and access.

What is Microsoft Excel used for in budgeting?

Forecasting, reconciliations, variance analysis, data validation, pivot tables, formulas, and financial reporting.

What Excel functions are useful for budget analysis?

SUMIFS, XLOOKUP or VLOOKUP, IF, SUM, COUNTIFS, pivot tables, conditional formatting, and percentage calculations.

How can a pivot table help a budget analyst?

It summarizes large datasets by categories such as program, funding source, account, month, or expenditure type.

How would you validate a financial report in Excel?

Check the source, period, filters, totals, formulas, duplicates, missing values, reconciliations, and consistency with authoritative records.

What should you do if you have not used a specific state financial system?

Be honest about your experience, explain your related ERP and financial analysis skills, and describe how you would learn the system and validate its outputs.

What is the purpose of a budget system audit trail?

To provide traceability for transactions, changes, approvals, and supporting records.

What does STAR stand for in behavioral interviews?

Situation, Task, Action, Result.