1. Managing the Country’s Money
7th Grade Civics
Miss Smith
*pgs

2. Collecting Public Money
Each level of government has a department responsible for collecting taxes
Ex: Internal Revenue Service (IRS)
After tax money is collected, it goes to the treasuries of various govs.
The comptroller makes sure public funds are used only with legislative approval
What agencies collect government revenue? The IRS, state and local tax collection agencies, U.S. Customs Service
What happens to tax money after it is collected? It is sent to the treasuries of the various governments

3. Planning Government Spending
Budgets list the amount and sources of expected revenue (or income)
They also show what the expected expenditures will be/ how the money will be spent
Management of public funds is divided btwn the executive and legislative branches
Executive branch prepares the budget, legislative passes the budget
What two branches of government are involved in managing public funds? Executive and legislative

4. Preparing the Federal Budget
The president prepares the federal budget
The Office of Management and Budget (OMB) help the president
Each dept. sends the OMB an estimate of how much they plan to spend the next year

5. Congress and the Budget
The pres. sends the budget to Congress with a message explaining it
The House and Senate review and debate the budget
Both houses of Congress must approve it
The budget is passed as appropriation bills
The pres. then approves or vetoes them

6. The National Debt
Balanced budget- budget in which revenue equals expenditures
The amount of money collected equals the amount of money spent
Surplus- excess of money, such as when a government collects more money than it spends
Deficit- shortage of money, such as when a government spends more money than it collects
What events might cause a government to have a surplus? increased tax revenues from a strong economy, a decrease in government spending

7. The National Debt
When the gov. runs a deficit, it must borrow money to make up the difference
This adds to the national debt
The country can also either decrease expenditures or increase revenues (taxes, fees, etc.) to lower the deficit
Part of the country’s revenue is set aside each year to pay down the interest

8. Accounting for Public Money
Audit- careful examination by trained accountants of every item of income and every expenditure
Who conducts audits at the federal level? The Government Accountability Office
How do audits ensure that funds are spent according to law? When accountants examine income and expenditures, they make sure that they are accurate and fulfill lawful purposes
What do you think might happen if citizens did not keep an eye on government revenue and spending? Funds might not be allocated to issues that the public is most concerned with. The government might overspend