CGFM EXAM 1 STUDY GUIDE | COMPLETE
EXAM PREP, PRACTICE QUESTIONS AND
ANSWERS
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,Allotments 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.
Apportionmnets Definitions may vary at different levels of government. At the federal level, OMB's
approval to use a protion of the legislatively approved budgetary authority.
Attestation engagements Engagement primarily concerned with examining or performing agreed upon
procedures on a subject matter, or an assertion about a subject matter, and reporting on
the results. The subject matter may be financial or nonfinancial and can be part of a
financial audit or performance audit. Possible subjects include reporting on an entity's
internal controls, compliance with law or performance measures.
Block grants Intergovernmental provision of resources for broadly defined purposes. Contrasts with
category grants.
Category grants Intergovernmental provision of resources to be used for activities in a specific category
of purpose. May be further classified as discretionary grants or formula grants. Contrasts
with block grants.
Central Management Agencies Government agencies that provide central management services to other components.
Example would be a state government hr office (that serves all state agencies) or the
OMB at the federal level.
Charter Local government version of a constitution. States may provide for the establishment of
local governments through charters
Checks and balances Process by which one branch of government (legislative, executiv or judicial) can
constrain actions of the other branches. Flows from separation of powers.
Conflict of interest Arises when one has personal interest in matters relating to official duties or activities.
Such conflicts can destroy objectivity and independence and prevent the exercise of due
care
Continuity of Operations Refers to the efforts to ensure the organization can sustain essential operations
regardless of planned or unplanned incidents or disruptions.
,Data mining Using special, computer-based techniques such as filters and algorithms to extract
meaningful information from large bodies of data
Diligence Pursuing an event, action or assignment to a timely and sufficient end or close
Discrestionary grants Form of category grant. Transfers funds between governments for a specific purpose;
whether a grant is awarded and the amount of the award depend on discretion of the
entity providing the funds
Due care To discharge professional responsibilities with competence and diligence, to the best of
one's ability, and with the same level of ability and skill as others in similar positions. It also
means to act in the best interest of those served.
Earmarking Variation on use of special funds. Revenue from specific taxes or other sources is set
aside for specific activities. One example is the earmarking of gasoline taxes for highway
improvements
Estate tax Form of wealth tax. Levied on the estate of the deceased person before assets are
distributed to heirs
Ethics A set of moral principles and values; the principles of conduct governing an individual or
a (professional) group. A complex system of discipline that civilized societies impose on
themselves through laws, customs, standards, social etiquette and other rules to govern
moral conduct
Excise tax Form of consumption tax.
FASAB Defines GAAP for entities of the federal government; this includes the national
government as a whole plus distinct components.
FASB Defines GAAP for private sector entities. Occasionally, GASB and FASAB make FASB
standards applicable to national, state or local government
Financial Management System Organized means for the collection, processing, transmission and dissemination of
financial information. Includes policies and procedures and trained personnel as well as
any applicable computer hardware and software
, Financial Reports External reports that depict financial position and financial results of operations of the
entity
Formula grants Form of category grants. The amount of the inter-governmental transfer is based on a
formula contained in law or regulation, which determines the total amount recipients will
receive if basic eligibility requirements are satisfied
Forensic auditing "Forensic" implies that the results will be admissable as legal evidence. Forensic auditing
combines the skills of auditors and accountants with investigative techniques, useful for
both detection and prevention of fraud
General Assembly Name often applied to the legislative branch at the state level
General obligation bonds Form of government debt that is backed by the full faith and credit of the government.
Contrasts with revenue bonds
GASB Defines GAAP for state and local government entities
Income tax Tax based on income and levied on individuals or corporations. Used most often at
national and state levels, though some states allow local governments to impose income
taxes.
Independence Free from relationships that may impair, or appear to impair, one's ability to act with
objectivity. Independence is the quality of being free of any obligation to particular
parties or interests. also free of undue influence.
Inheritance Tax Form of wealth tax. Levied on the person receiving the bequest
Intangibles tax Form of wealth tax. Applied to intangible assets such as stocks and bonds, savings
accounts, trademearks and accounts receivable (in the case of a business).
Internal controls Activities designed to ensure programs achieve their intended results; resources are used
efficiently and effectively; programs and resources are protected from waste, fraud and
mismanagement; laws and regulations are followed; and reliable and timely information is
obtained, maintained and reported
Management Cycle Steps in the continuous government management cycle include planning, programming,
budgeting, operations, accounting, reporting and auditing
EXAM PREP, PRACTICE QUESTIONS AND
ANSWERS
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,Allotments 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.
Apportionmnets Definitions may vary at different levels of government. At the federal level, OMB's
approval to use a protion of the legislatively approved budgetary authority.
Attestation engagements Engagement primarily concerned with examining or performing agreed upon
procedures on a subject matter, or an assertion about a subject matter, and reporting on
the results. The subject matter may be financial or nonfinancial and can be part of a
financial audit or performance audit. Possible subjects include reporting on an entity's
internal controls, compliance with law or performance measures.
Block grants Intergovernmental provision of resources for broadly defined purposes. Contrasts with
category grants.
Category grants Intergovernmental provision of resources to be used for activities in a specific category
of purpose. May be further classified as discretionary grants or formula grants. Contrasts
with block grants.
Central Management Agencies Government agencies that provide central management services to other components.
Example would be a state government hr office (that serves all state agencies) or the
OMB at the federal level.
Charter Local government version of a constitution. States may provide for the establishment of
local governments through charters
Checks and balances Process by which one branch of government (legislative, executiv or judicial) can
constrain actions of the other branches. Flows from separation of powers.
Conflict of interest Arises when one has personal interest in matters relating to official duties or activities.
Such conflicts can destroy objectivity and independence and prevent the exercise of due
care
Continuity of Operations Refers to the efforts to ensure the organization can sustain essential operations
regardless of planned or unplanned incidents or disruptions.
,Data mining Using special, computer-based techniques such as filters and algorithms to extract
meaningful information from large bodies of data
Diligence Pursuing an event, action or assignment to a timely and sufficient end or close
Discrestionary grants Form of category grant. Transfers funds between governments for a specific purpose;
whether a grant is awarded and the amount of the award depend on discretion of the
entity providing the funds
Due care To discharge professional responsibilities with competence and diligence, to the best of
one's ability, and with the same level of ability and skill as others in similar positions. It also
means to act in the best interest of those served.
Earmarking Variation on use of special funds. Revenue from specific taxes or other sources is set
aside for specific activities. One example is the earmarking of gasoline taxes for highway
improvements
Estate tax Form of wealth tax. Levied on the estate of the deceased person before assets are
distributed to heirs
Ethics A set of moral principles and values; the principles of conduct governing an individual or
a (professional) group. A complex system of discipline that civilized societies impose on
themselves through laws, customs, standards, social etiquette and other rules to govern
moral conduct
Excise tax Form of consumption tax.
FASAB Defines GAAP for entities of the federal government; this includes the national
government as a whole plus distinct components.
FASB Defines GAAP for private sector entities. Occasionally, GASB and FASAB make FASB
standards applicable to national, state or local government
Financial Management System Organized means for the collection, processing, transmission and dissemination of
financial information. Includes policies and procedures and trained personnel as well as
any applicable computer hardware and software
, Financial Reports External reports that depict financial position and financial results of operations of the
entity
Formula grants Form of category grants. The amount of the inter-governmental transfer is based on a
formula contained in law or regulation, which determines the total amount recipients will
receive if basic eligibility requirements are satisfied
Forensic auditing "Forensic" implies that the results will be admissable as legal evidence. Forensic auditing
combines the skills of auditors and accountants with investigative techniques, useful for
both detection and prevention of fraud
General Assembly Name often applied to the legislative branch at the state level
General obligation bonds Form of government debt that is backed by the full faith and credit of the government.
Contrasts with revenue bonds
GASB Defines GAAP for state and local government entities
Income tax Tax based on income and levied on individuals or corporations. Used most often at
national and state levels, though some states allow local governments to impose income
taxes.
Independence Free from relationships that may impair, or appear to impair, one's ability to act with
objectivity. Independence is the quality of being free of any obligation to particular
parties or interests. also free of undue influence.
Inheritance Tax Form of wealth tax. Levied on the person receiving the bequest
Intangibles tax Form of wealth tax. Applied to intangible assets such as stocks and bonds, savings
accounts, trademearks and accounts receivable (in the case of a business).
Internal controls Activities designed to ensure programs achieve their intended results; resources are used
efficiently and effectively; programs and resources are protected from waste, fraud and
mismanagement; laws and regulations are followed; and reliable and timely information is
obtained, maintained and reported
Management Cycle Steps in the continuous government management cycle include planning, programming,
budgeting, operations, accounting, reporting and auditing
