CGFM Test 1 Questions with Verified
Answers
Accountability - Answers -Principle that, in a democracy, government operates by the
consent of the people. Therefore, it is responsible to, and must answer to, the people for
its actions and results, including the taking and using of the people's resources
Allotment - Answers -In the federal government, an agency's distribution of apportioned
budgetary authority to various components within the agency. After the executive
agency receives its apportionment, it allots budgetary authority to specific components
within the agency
Anti-Deficiency Act - Answers -At the federal level, a law stating that officials can be
fined and/or jailed if they obligate the government to spend funds beyond the legally
authorized purpose, time, or amount
Apportionment - Answers -Definitions may vary at different levels of government. At the
federal level, this is OMB's approval to use a portion of the legislatively approved
budgetary authority
Appropriated Budget - Answers -Budget that has been passed by the legislative branch
(and signed by the chief executive, if required); has effect of law
Appropriation - Answers -A legislative enactment (law, statute, or ordinance) that
created spending authority; the legal authority to incur expenses and spend money
Attestation Engagement - Answers -Engagement concerning with examining, reviewing,
or performing agreed-upon procedures on a limited subject matter, or a limited assertion
about a subject matter, and reporting on the results. The subject matter may be financial
or nonfinancial
UIRP - Answers -%Change Spot_f/d = interest rate_f - Interest rate_d
MVO Objective Function - Answers -U_m=E(Rm) - .005(risk aversion)variance_market
Decomposed Fixed Income Return - Answers -E(R)= yield income + rolldown rtn +
E(yield price change) Price - E(credit loss) + E(currency gains/losses)
E(yield price change) = -ModDur(yield change) + .5*convexity * change in yield^2
, Securities Lending Rebate Rate - Answers -= Collateral earnings rate - securities
lending rate
Repo Dollar Interest - Answers -= Principal*Repo rate*(term of repo in days/365)
Authorization - Answers -Legislative enactment that approves programs; prescribes
what activities an agency may pursue if funding is available
Block Grant - Answers -One type of formula grant. Block grants combine several service
categories into one grant and, thus, allow maximum flexibility to the grantee to use the
funds to meet local needs
Capital Budget - Answers -Forecasts and controls spending for "big-ticket" items that
are acquired and used over a period of several years, such as construction projects and
major equipment purchases. Used at state and local levels
Capital Lease - Answers -A lease of real property that meets defined criteria requiring
the government to report the property as if it were purchased with the proceeds of long-
term debt
Cash-flow budget - Answers -Forecasts the timing, as well as amount of cash flows, for
a period. Use to project required cash levels
Categorical grant - Answers -One type of formula grant that can be used for a narrowly
defined purpose
Central management agencies - Answers -Government agencies that provide central
management services to other components. An example would be a state government's
human resource office (that serves all state agencies) or the OMB at the federal level
Certificate of Excellence in Accountability Reporting (CEAR) - Answers -An AGA
program that helps federal agencies and their components produce effective, high-
quality Performance and Accountability Reports/Agency Financial Reports
Certificate of participation - Answers -Form of share government financing. In a typical
form, several financial institutions share in a loan arrangement with a government entity
Charter - Answers -Local government version of a constitution. States may provide for
the establishment of local governments through charters.
Checks and Balances - Answers -Process by which one branch of government
(legislative, executive, or judicial) can constrain actions of the other branches. Flows
from separation of powers
Answers
Accountability - Answers -Principle that, in a democracy, government operates by the
consent of the people. Therefore, it is responsible to, and must answer to, the people for
its actions and results, including the taking and using of the people's resources
Allotment - Answers -In the federal government, an agency's distribution of apportioned
budgetary authority to various components within the agency. After the executive
agency receives its apportionment, it allots budgetary authority to specific components
within the agency
Anti-Deficiency Act - Answers -At the federal level, a law stating that officials can be
fined and/or jailed if they obligate the government to spend funds beyond the legally
authorized purpose, time, or amount
Apportionment - Answers -Definitions may vary at different levels of government. At the
federal level, this is OMB's approval to use a portion of the legislatively approved
budgetary authority
Appropriated Budget - Answers -Budget that has been passed by the legislative branch
(and signed by the chief executive, if required); has effect of law
Appropriation - Answers -A legislative enactment (law, statute, or ordinance) that
created spending authority; the legal authority to incur expenses and spend money
Attestation Engagement - Answers -Engagement concerning with examining, reviewing,
or performing agreed-upon procedures on a limited subject matter, or a limited assertion
about a subject matter, and reporting on the results. The subject matter may be financial
or nonfinancial
UIRP - Answers -%Change Spot_f/d = interest rate_f - Interest rate_d
MVO Objective Function - Answers -U_m=E(Rm) - .005(risk aversion)variance_market
Decomposed Fixed Income Return - Answers -E(R)= yield income + rolldown rtn +
E(yield price change) Price - E(credit loss) + E(currency gains/losses)
E(yield price change) = -ModDur(yield change) + .5*convexity * change in yield^2
, Securities Lending Rebate Rate - Answers -= Collateral earnings rate - securities
lending rate
Repo Dollar Interest - Answers -= Principal*Repo rate*(term of repo in days/365)
Authorization - Answers -Legislative enactment that approves programs; prescribes
what activities an agency may pursue if funding is available
Block Grant - Answers -One type of formula grant. Block grants combine several service
categories into one grant and, thus, allow maximum flexibility to the grantee to use the
funds to meet local needs
Capital Budget - Answers -Forecasts and controls spending for "big-ticket" items that
are acquired and used over a period of several years, such as construction projects and
major equipment purchases. Used at state and local levels
Capital Lease - Answers -A lease of real property that meets defined criteria requiring
the government to report the property as if it were purchased with the proceeds of long-
term debt
Cash-flow budget - Answers -Forecasts the timing, as well as amount of cash flows, for
a period. Use to project required cash levels
Categorical grant - Answers -One type of formula grant that can be used for a narrowly
defined purpose
Central management agencies - Answers -Government agencies that provide central
management services to other components. An example would be a state government's
human resource office (that serves all state agencies) or the OMB at the federal level
Certificate of Excellence in Accountability Reporting (CEAR) - Answers -An AGA
program that helps federal agencies and their components produce effective, high-
quality Performance and Accountability Reports/Agency Financial Reports
Certificate of participation - Answers -Form of share government financing. In a typical
form, several financial institutions share in a loan arrangement with a government entity
Charter - Answers -Local government version of a constitution. States may provide for
the establishment of local governments through charters.
Checks and Balances - Answers -Process by which one branch of government
(legislative, executive, or judicial) can constrain actions of the other branches. Flows
from separation of powers
