1. 7 th Grade Civics Miss Smith *pgs. 305-308

2.  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

3.  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

4.  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.  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.  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

7.  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.  Audit- careful examination by trained accountants of every item of income and every expenditure