CGFO - FINANCIAL ADMINISTRATION
EXAM 2026 WITH VERIFIED ANSWERS.
According to GASB 10, list the types of risk - answer -Torts
Theft of damage to, or destruction of assets
Business interuption
Errors or omissions
Job-related illnesses or injuries to employees
Acts of God
Any other risk of loss assumed under a policy or participation
contract issued by a public entity risk pool
Risk of loss resulting when an entity agrees to provide accident
and health, dental, and other medical benefits to its employees.
What are the two ways to mange risk? - answer -Manage an
organization's activities to minimize adverse effects of certain
types of losses
Mitigate risk by purchasing insurance.
What are three reasons to manage risk? - answer -Create a
safe workplace
Prevent financial losses
Provide stability (budget)
,What are the three approaches to managing operational and
financial risk> - answer -Investment portfolio policies (long-term
and short-term)
Diversification strategies (spread risk)
Custody of assets (procedures)
What are 7 sources of risk? - answer -Physical
Legal
Operational
Political
Social
Economic
Cognitive (I.T. hack)
What are three tools to minimize risk? - answer -Risk transfer -
shift the burden to another, purchase insurance, or risk pool,
level premiums for budget
Risk retention - assume risk responsibilities internally
Risk avoidance - Do not provide service
What are the four parts of a Risk Management Program? -
answer -Risk Identification
,Risk evaluation
Risk treatment
Implementation
In the case of Risk Retention, if claims are greater than
premiums = (Gain or Loss) - answer -Loss
In the case of Risk Retention, if claims are less than premiums
= (Gain or Loss) - answer -Gain
What is the advantages of Risk Retention? - answer -Lower
premiums
Align incentives
Create a safer work environment
What are the advantages of participating in a Risk Pool? -
answer -Vehicle for government to pool funds.
Affordable cost through economies of scale
Provide services to reduce risk
Risk Pool - Premium = - answer -Revenue
, Define IBNR - answer -Incurred but not reported claims
When is IBNR recorded? - answer -Record when event triggers
coverage under policy
What amount is IBNR recorded? - answer -Amount based on
estimate to settle claim.
How is IBNR recorded? - answer -As an accrual based on
probable loss that can be reasonably estimated, recoreded as
an expense/liability.
How do we minimize risk? - answer -Provide safety in the
workplace
Inspect buildings
Install extinquishers, sprinklers, smoke detectors
Training
What three areas should we monitor for risks? - answer -One-
time projects
EXAM 2026 WITH VERIFIED ANSWERS.
According to GASB 10, list the types of risk - answer -Torts
Theft of damage to, or destruction of assets
Business interuption
Errors or omissions
Job-related illnesses or injuries to employees
Acts of God
Any other risk of loss assumed under a policy or participation
contract issued by a public entity risk pool
Risk of loss resulting when an entity agrees to provide accident
and health, dental, and other medical benefits to its employees.
What are the two ways to mange risk? - answer -Manage an
organization's activities to minimize adverse effects of certain
types of losses
Mitigate risk by purchasing insurance.
What are three reasons to manage risk? - answer -Create a
safe workplace
Prevent financial losses
Provide stability (budget)
,What are the three approaches to managing operational and
financial risk> - answer -Investment portfolio policies (long-term
and short-term)
Diversification strategies (spread risk)
Custody of assets (procedures)
What are 7 sources of risk? - answer -Physical
Legal
Operational
Political
Social
Economic
Cognitive (I.T. hack)
What are three tools to minimize risk? - answer -Risk transfer -
shift the burden to another, purchase insurance, or risk pool,
level premiums for budget
Risk retention - assume risk responsibilities internally
Risk avoidance - Do not provide service
What are the four parts of a Risk Management Program? -
answer -Risk Identification
,Risk evaluation
Risk treatment
Implementation
In the case of Risk Retention, if claims are greater than
premiums = (Gain or Loss) - answer -Loss
In the case of Risk Retention, if claims are less than premiums
= (Gain or Loss) - answer -Gain
What is the advantages of Risk Retention? - answer -Lower
premiums
Align incentives
Create a safer work environment
What are the advantages of participating in a Risk Pool? -
answer -Vehicle for government to pool funds.
Affordable cost through economies of scale
Provide services to reduce risk
Risk Pool - Premium = - answer -Revenue
, Define IBNR - answer -Incurred but not reported claims
When is IBNR recorded? - answer -Record when event triggers
coverage under policy
What amount is IBNR recorded? - answer -Amount based on
estimate to settle claim.
How is IBNR recorded? - answer -As an accrual based on
probable loss that can be reasonably estimated, recoreded as
an expense/liability.
How do we minimize risk? - answer -Provide safety in the
workplace
Inspect buildings
Install extinquishers, sprinklers, smoke detectors
Training
What three areas should we monitor for risks? - answer -One-
time projects
