CGFM TEST 3
ASSESSMENT QUESTIONS
AND CORRECT ANSWERS
GRADED A+ 2025-2026
Three Broad Government Spending Purposes - ANS-1) Current Operations
2) Capital Outlays
3) Debt Service
Present Value Analysis - Three Components - ANS-Determines what $$ Rec'd in Future
is Worth Today
1) inflation component - year over year loss in value
2) enterprise component - inherent risk
3) unique component -
Budget Accounting and Procedures Act of 1950 - ANS-Requires the head of each
federal agency to establish and maintain I/C's.
Federal Managers Financial Integrity Act of 1982 (FMFIA) - ANS-requires the head of
each agency to evaluate controls on an annual basis, reporting any weakness along
with a corrective action plan
** (resulted in the "green book") **
Single Audit Act of 1984 (amended in 1996) - ANS-requires the audit of state and local
governments and npo's receiving federal funding
,Sarbanes Oxley Act of 2002 - ANS-Placed restrictions on publicly traded companies
following Enron scandal. Requires mgmt to report on I/C's for financial reporting in its
annual report.
(ICOFR) - ANS-Internal Controls Over Financial Reporting
Chief Financial Officers Act of 1990 (CFO Act): - ANS-required 10 federal agencies to
produce audited annual financial reports that included a report on internal control.
expanded in 1994 by GMRA
INTERNAL CONTROLS - ANS-systems and techniques managers use to provide
reasonable assurance that agency objectives met in an effective/efficient manner, in
compliance with laws/regulations, and to safeguard assets.
Implemented to accomplish certain results, prevent problems, or detect problems that
have occurred.
Some controls can both detect and prevent problems (but only if their existence is
known).
TIME VALUE OF MONEY - ANS-Used in consideration of capital budgeting
1) Present Value Analysis
2) Future Value Analysis
3) Payback Analysis
Flowcharting - ANS-Iterative process requiring changes throughout development, each
step represents a decision, also used to evaluate processes for effective internal
controls
,Earned Value Management (EVM) - ANS-project mgmt system that weighs both
schedule and cost performance to determine if a project is delivering expected results
on time and within budget
Regression Analysis - ANS-Predicts the relationship between variables:
1) Direct Linear Regression
2) Indirect Linerar Regression
3) Non-linear Regression
4) No Relationship
** See Limits of Regression Analysis
Correlation Coefficient - ANS-Determines the degree of accuracy the analysis
(variables) can be used to predict results (1=perfect correlation
.85 considered reliable for forecasting)
Multiple Regressions - ANS-analyzes multiple IV's and look for items with the highest
correlation coefficient as being the most like predictors
Limits of Regression Analysis - ANS-Data ranges must be relevant (e.g., sample size
might be too small to project on a larger population)
Difficult to find data sets with high correlation coefficients
Bad data = bad results (garbage in, garbage out)
Correlation is not Causation, have to be able to explain how one set of data would
influence another
Data Analytics - ANS-inspecting, cleaning, transforming, and modeling data to find
useful information, conclusions, and support decision making
, Data Mining - ANS-(Predictive) sorting through large data sets and using filters and
algorithms to pick out relationships
** See strengths and weaknesses
Predictive Analytics - ANS-data collected through a variety of techniques to analyze
current and historical facts to make predictions about future events
Data Mining Strengths and Weaknesses - ANS-* Strengths
Analyst is able to review complete data sets
Ability to link together multiple data sources
* Weaknesses
Must have quality data
Must have ability to understand program requirements and how this is represented in
the data
Starting a Data Analytic Program - ANS-Collaborate with other agencies for data
collection and sharing
Determine ROI in Analytics Programs
Give leaders clear concise analysis they can use to support data driven programs
Enable employees at all levels to see and utilize data for their needs (not just the needs
of senior leaders
Managers to demand the use of data and provide employees with targeted on the job
training
Forensic Auditing - ANS-examination of financial information that is likely to be used
for the investigation and prosecution of financial crimes
Need to have knowledge of basic legal principles, standards for discovery
Steps for Forensic Auditing - ANS-a) data collection,
ASSESSMENT QUESTIONS
AND CORRECT ANSWERS
GRADED A+ 2025-2026
Three Broad Government Spending Purposes - ANS-1) Current Operations
2) Capital Outlays
3) Debt Service
Present Value Analysis - Three Components - ANS-Determines what $$ Rec'd in Future
is Worth Today
1) inflation component - year over year loss in value
2) enterprise component - inherent risk
3) unique component -
Budget Accounting and Procedures Act of 1950 - ANS-Requires the head of each
federal agency to establish and maintain I/C's.
Federal Managers Financial Integrity Act of 1982 (FMFIA) - ANS-requires the head of
each agency to evaluate controls on an annual basis, reporting any weakness along
with a corrective action plan
** (resulted in the "green book") **
Single Audit Act of 1984 (amended in 1996) - ANS-requires the audit of state and local
governments and npo's receiving federal funding
,Sarbanes Oxley Act of 2002 - ANS-Placed restrictions on publicly traded companies
following Enron scandal. Requires mgmt to report on I/C's for financial reporting in its
annual report.
(ICOFR) - ANS-Internal Controls Over Financial Reporting
Chief Financial Officers Act of 1990 (CFO Act): - ANS-required 10 federal agencies to
produce audited annual financial reports that included a report on internal control.
expanded in 1994 by GMRA
INTERNAL CONTROLS - ANS-systems and techniques managers use to provide
reasonable assurance that agency objectives met in an effective/efficient manner, in
compliance with laws/regulations, and to safeguard assets.
Implemented to accomplish certain results, prevent problems, or detect problems that
have occurred.
Some controls can both detect and prevent problems (but only if their existence is
known).
TIME VALUE OF MONEY - ANS-Used in consideration of capital budgeting
1) Present Value Analysis
2) Future Value Analysis
3) Payback Analysis
Flowcharting - ANS-Iterative process requiring changes throughout development, each
step represents a decision, also used to evaluate processes for effective internal
controls
,Earned Value Management (EVM) - ANS-project mgmt system that weighs both
schedule and cost performance to determine if a project is delivering expected results
on time and within budget
Regression Analysis - ANS-Predicts the relationship between variables:
1) Direct Linear Regression
2) Indirect Linerar Regression
3) Non-linear Regression
4) No Relationship
** See Limits of Regression Analysis
Correlation Coefficient - ANS-Determines the degree of accuracy the analysis
(variables) can be used to predict results (1=perfect correlation
.85 considered reliable for forecasting)
Multiple Regressions - ANS-analyzes multiple IV's and look for items with the highest
correlation coefficient as being the most like predictors
Limits of Regression Analysis - ANS-Data ranges must be relevant (e.g., sample size
might be too small to project on a larger population)
Difficult to find data sets with high correlation coefficients
Bad data = bad results (garbage in, garbage out)
Correlation is not Causation, have to be able to explain how one set of data would
influence another
Data Analytics - ANS-inspecting, cleaning, transforming, and modeling data to find
useful information, conclusions, and support decision making
, Data Mining - ANS-(Predictive) sorting through large data sets and using filters and
algorithms to pick out relationships
** See strengths and weaknesses
Predictive Analytics - ANS-data collected through a variety of techniques to analyze
current and historical facts to make predictions about future events
Data Mining Strengths and Weaknesses - ANS-* Strengths
Analyst is able to review complete data sets
Ability to link together multiple data sources
* Weaknesses
Must have quality data
Must have ability to understand program requirements and how this is represented in
the data
Starting a Data Analytic Program - ANS-Collaborate with other agencies for data
collection and sharing
Determine ROI in Analytics Programs
Give leaders clear concise analysis they can use to support data driven programs
Enable employees at all levels to see and utilize data for their needs (not just the needs
of senior leaders
Managers to demand the use of data and provide employees with targeted on the job
training
Forensic Auditing - ANS-examination of financial information that is likely to be used
for the investigation and prosecution of financial crimes
Need to have knowledge of basic legal principles, standards for discovery
Steps for Forensic Auditing - ANS-a) data collection,
