CGFM EXAM 3 ANSWERS | COMPLETE
STUDY GUIDE AND PRACTICE QUESTIONS
FOR EXAM PREP
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,Cash The most liquid asset
Separation of duties One person authorizes and collects another person records transaction another person
deposits receipt or mails payments fourth person reconciles bank, and ledgers on a
timely basis. In small governments, a minimum of two people collect and record deposits
and reconciliation could be done by somebody outside.
Automated systems What can be used to support collection and payment processing in separation of duties
example automatic numbers on receipts and checks lockbox and ledger downloads
Precautions with checks and payment options Pre-numbered checks safety features on checks safe storage of blank checks, limited
signatures, frequent reconciliation safeguarding canceled checks
Periodic scheduled on analysis of Cash reports Reviews the aged collection reports and disbursement of vendors. Identifies collections
and disbursement on normal. Compare cash receipts and disbursement to budget and
exported amounts review timing of payment and any penalties and the requirement
should be documented in policy and procedures.
float The period between check issued and time that it is presented for payment at the bank
during this time interest can be earned
8 How many degrees does the federal reserve have?
Duties of the federal reserve 1) forming and conducting nations monetary policy. 2) payment systems - funds are
transferred automatic clearinghouse (ACH) and check collection. 3) distributing coin and
currency. 4) fiscal functions for US Department of treasury, federal agencies, and other
entities. 5) federal government bank. 6) short term loans to depository in institutions. 7)
loans to participants in programs with eligibility and unusual circumstances. 8) serve
customers and communities. Ex: education materials fiscal customer protection, rights,
and laws. Supervising bank, Holden companies, state member bank, savings and loans,
Holden companies, US officers of foreign bank operations and others.
Banking needs State and local governments engage local banks to handle what? Considerations to
make our physical location, size of banks Mount government plan to keep on hand, and
can they provide collateral.
,Service banks Offers collection services, concentration bank services, zero balance accounts (ZBA),
payment services, short-term borrowing, underwire bonds, investment advice and
management, credit cards, accounting services, safety deposit box and other
safekeeping information, reporting services and bank account analysis
Fee You can pay for services for a ___for each service or maintain a minimum amount on
deposit at the bank called compensating balance. Government should not use more
banks than necessary.
Cash Forecasting Collect major money a few times a year and spread it out over the whole year. You can
prepare cash budgets to predict this.
Basic process Instructing payers to mail paper checks to the government
Lockbox service Accelerate deposits of receipts to the bank or the post office box
ZBA accounts Most common use is for payroll. Is also an operating bank designed as a central office for
all transactions. At the close of each day, it is automatically covered by the transfer of
funds to bring the balance to zero and it always controls funds to remain in a central
account.
Over-the-counter collections Designated bank as collection agent
Credit and debit cards People pay earlier with these eliminate the need for people to handle cash, but they can
charge a fee
Electronic collections A Webb based Electronic Funds Transfer like pay.gov and requires an agreement
Prepaid drawndown accounts Deposits money to the accounts then draw against as customer consumes goods or
services examples GPO postal services stamps turnpike authorities
Warrant Instrument drawn on treasury of government
Check Instrument drawn on bank and paid with funds to deposit
Warrant Gets taken to the bank, the bank takes it to the government to obtain cash or uses own
funds to pay pay and then reimbursed by the treasurer
, Two types of electronic transfer Electronic Funds Transfer EFT through ACH like Fedwire. Wires (very expensive.)
EFT's Enter ACH as credit transactions or direct deposits, these only cost a few cents to transfer
Improper payments Identifying and correcting _____ _____ but editing checks that significantly exceed the
normal data mining checks for the same amount to the same vendor as potential
duplicates and auditing checks because the amount paid did not exceed the amount
permitted
Electronic Data Interchange (EDI) Transfers, money, and remittance info through ACH to payee, computer-to-computer
transmission, addendum record contains payment related accounting information with
actual payment
Credit cards or purchase cards Purchases up to a certain amount, one single large payment instead of a lot of mini
payments
Electronic benefits cards Stored value or smart card with spending limits example food stamps
Cash discounts 1/10, Net/30. One percent discount is paid in 10 days if not full amount and 30 days.
Improper payment Made in an incorrect amount under statutory contractual admin or other legal applicable
requirements includes any payment to an eligible recipient. Any payment for an eligible
good or service a duplicate payment payment were good or service was not received
payment not authorized by law payment that does not account for credit or applicable
discounts.
Two main components of improper payments Resulting in monetary loss to government and that that does not result in loss to the
government which is made to wrong recipient and or wrong amount
Improper payments information act IPIA 2002
Improper payments, elimination, and recovery act IPERA 2010
Improper payments, elimination, recovery improvement act IPERIA 2012
STUDY GUIDE AND PRACTICE QUESTIONS
FOR EXAM PREP
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,Cash The most liquid asset
Separation of duties One person authorizes and collects another person records transaction another person
deposits receipt or mails payments fourth person reconciles bank, and ledgers on a
timely basis. In small governments, a minimum of two people collect and record deposits
and reconciliation could be done by somebody outside.
Automated systems What can be used to support collection and payment processing in separation of duties
example automatic numbers on receipts and checks lockbox and ledger downloads
Precautions with checks and payment options Pre-numbered checks safety features on checks safe storage of blank checks, limited
signatures, frequent reconciliation safeguarding canceled checks
Periodic scheduled on analysis of Cash reports Reviews the aged collection reports and disbursement of vendors. Identifies collections
and disbursement on normal. Compare cash receipts and disbursement to budget and
exported amounts review timing of payment and any penalties and the requirement
should be documented in policy and procedures.
float The period between check issued and time that it is presented for payment at the bank
during this time interest can be earned
8 How many degrees does the federal reserve have?
Duties of the federal reserve 1) forming and conducting nations monetary policy. 2) payment systems - funds are
transferred automatic clearinghouse (ACH) and check collection. 3) distributing coin and
currency. 4) fiscal functions for US Department of treasury, federal agencies, and other
entities. 5) federal government bank. 6) short term loans to depository in institutions. 7)
loans to participants in programs with eligibility and unusual circumstances. 8) serve
customers and communities. Ex: education materials fiscal customer protection, rights,
and laws. Supervising bank, Holden companies, state member bank, savings and loans,
Holden companies, US officers of foreign bank operations and others.
Banking needs State and local governments engage local banks to handle what? Considerations to
make our physical location, size of banks Mount government plan to keep on hand, and
can they provide collateral.
,Service banks Offers collection services, concentration bank services, zero balance accounts (ZBA),
payment services, short-term borrowing, underwire bonds, investment advice and
management, credit cards, accounting services, safety deposit box and other
safekeeping information, reporting services and bank account analysis
Fee You can pay for services for a ___for each service or maintain a minimum amount on
deposit at the bank called compensating balance. Government should not use more
banks than necessary.
Cash Forecasting Collect major money a few times a year and spread it out over the whole year. You can
prepare cash budgets to predict this.
Basic process Instructing payers to mail paper checks to the government
Lockbox service Accelerate deposits of receipts to the bank or the post office box
ZBA accounts Most common use is for payroll. Is also an operating bank designed as a central office for
all transactions. At the close of each day, it is automatically covered by the transfer of
funds to bring the balance to zero and it always controls funds to remain in a central
account.
Over-the-counter collections Designated bank as collection agent
Credit and debit cards People pay earlier with these eliminate the need for people to handle cash, but they can
charge a fee
Electronic collections A Webb based Electronic Funds Transfer like pay.gov and requires an agreement
Prepaid drawndown accounts Deposits money to the accounts then draw against as customer consumes goods or
services examples GPO postal services stamps turnpike authorities
Warrant Instrument drawn on treasury of government
Check Instrument drawn on bank and paid with funds to deposit
Warrant Gets taken to the bank, the bank takes it to the government to obtain cash or uses own
funds to pay pay and then reimbursed by the treasurer
, Two types of electronic transfer Electronic Funds Transfer EFT through ACH like Fedwire. Wires (very expensive.)
EFT's Enter ACH as credit transactions or direct deposits, these only cost a few cents to transfer
Improper payments Identifying and correcting _____ _____ but editing checks that significantly exceed the
normal data mining checks for the same amount to the same vendor as potential
duplicates and auditing checks because the amount paid did not exceed the amount
permitted
Electronic Data Interchange (EDI) Transfers, money, and remittance info through ACH to payee, computer-to-computer
transmission, addendum record contains payment related accounting information with
actual payment
Credit cards or purchase cards Purchases up to a certain amount, one single large payment instead of a lot of mini
payments
Electronic benefits cards Stored value or smart card with spending limits example food stamps
Cash discounts 1/10, Net/30. One percent discount is paid in 10 days if not full amount and 30 days.
Improper payment Made in an incorrect amount under statutory contractual admin or other legal applicable
requirements includes any payment to an eligible recipient. Any payment for an eligible
good or service a duplicate payment payment were good or service was not received
payment not authorized by law payment that does not account for credit or applicable
discounts.
Two main components of improper payments Resulting in monetary loss to government and that that does not result in loss to the
government which is made to wrong recipient and or wrong amount
Improper payments information act IPIA 2002
Improper payments, elimination, and recovery act IPERA 2010
Improper payments, elimination, recovery improvement act IPERIA 2012
