CERTIFIED GOVERNMENT FINANCIAL MANAGER (CGFM) EXAM
STUDY GUIDE | QUESTIONS & ANSWERS | NEW 2026/2027 UPDATE |
GRADED A+| 100% CORRECT (VERIFIED SOLUTIONS)
Government Sovereignty -
ANSWER
Nat'l government can't be sued by states or by citizens w/out its permission.
Government Authority -
ANSWER
Derived from constitutions or charters (local versions of a constitution), statutes, executive orders &
regulations.
3 Levels -
ANSWER
1) National
2) State
3) Local
The primary purpose of each is to provide services to citizens. Separate and distinct, yet they may
coordinate their efforts.
3 Branches -
ANSWER
1) Legislative
2) Executive
3) Judicial
Separation of Powers -
ANSWER
Feature of the Constitution that requires each of the three branches of government—legislative,
executive, and judicial—to be relatively independent of the others so that one cannot control the
others. Power is shared among the three branches of government.
,Checks and Balances -
ANSWER
Constitutionally-mandated system that allows each branch of government to amend or veto acts of
another branch so as to prevent any one branch from exerting too much power.
Judicial Review -
ANSWER
Power given to the judicial branch in order to sustain checks and balances. Courts can overturn laws
passed by the legislature & signed by the president/governor if courts deem them unconstitutional.
Enables judges to question the legality and reasonableness of a gov't manager's administrative
actions. (Test question)
Federalism -
ANSWER
U.S. system of gov't. Power is distributed among different levels of gov't and no one level of gov't
has complete authority over all areas of public policy. No centeralized system of gov't in U.S.
Popular Sovereignty -
ANSWER
Basic concept of the Constitution. The idea that ultimate authority belongs to the voting people and
even a sovereign gov't is accountable to citizens.
Legal Constraints -
ANSWER
Derived from constitutions, statutes, and ordinances. They can include limits on the type of tax, rate
of tax, and tax collection purposes.
Purpose
Term
Amount
Process -
ANSWER
Ways in which constitutions and charters specify whether the government can incur debt and limit
government borrowing. (PTAP)
,Reserved Clause -
ANSWER
Stems from the 10th Amendment to the U.S. Constitution. Powers not delegated to the Nat'l gov't,
nor prohibited to the states, are reserved to the states and the people. Nat'l gov't can influence
lower levels, but can't dictate the manner in which state & local gov't will operate.
Areas of Overlap in Governmental Responsibilities -
ANSWER
Nat'l and state gov'ts exercise authority in civil defense and the Nat'l Guard. For example, during
peacetime, Nat'l Guard units fall under the direction of state governors and meet the needs of the
state. During nat'l emergencies, these units are under command of the President, Commander in
Chief. State and local gov'ts have some responsibility for traffic safety. All 3 levels impact public
education.
Grants -
ANSWER
Money that is distributed to lower-level governments with the purpose of funding special projects.
Laboratories of Democracy -
ANSWER
Nickname given to state and local governments because they experiment with policies and
procedures that are later adopted at the nat'l level.
Performance Reporting -
ANSWER
Example of upward influence (laboratory of democracy). U.S. gov't requirement created in the 90s
for federal agencies . Process of collecting and distributing performance information; includes status
reporting, progress measurement, and forecasting.
Legislative -
ANSWER
Passes laws. House of Representatives and Senate form legislative branch of Nat'l gov't. Includes
Congressional Budget Office, the Library of Congress, Gov't Accountability Office, and Architect of the
Capitol.
, Executive -
ANSWER
Administers laws. Executes gov't programs. Includes the U.S. Departments of Education, Interior, and
Defense.
Judicial -
ANSWER
Interprets laws and exercises judicial review over actions of the other branches.
Municipal Governments -
ANSWER
The lowest level of government and exercises authority over a municipality (i.e. city, town, village).
Usually, the scope of its powers are determined by its delegated authority from the level of
government that creates it and the laws it passes are called ordinances.
U.S. Constitution -
ANSWER
A set of principles (guidelines) that describe the duties and powers of the U.S. government. Written
in 1787 and ratified in 1791. Has been amended 27 times. The first 10 amendments form the Bill of
Rights. Comprised of seven articles.
Article I -
ANSWER
Defines powers of the legislative branch. Power to enact law, collect taxes, coin money, raise armies
and declare war.
Article II -
ANSWER
Defines the role and power of the presidency and executive branch. Power to command armed
forces, grant pardons for offenses against the U.S., and to appoint ambassadors and Supreme Court
judges with the advice and consent of the Senate.
Article III -
STUDY GUIDE | QUESTIONS & ANSWERS | NEW 2026/2027 UPDATE |
GRADED A+| 100% CORRECT (VERIFIED SOLUTIONS)
Government Sovereignty -
ANSWER
Nat'l government can't be sued by states or by citizens w/out its permission.
Government Authority -
ANSWER
Derived from constitutions or charters (local versions of a constitution), statutes, executive orders &
regulations.
3 Levels -
ANSWER
1) National
2) State
3) Local
The primary purpose of each is to provide services to citizens. Separate and distinct, yet they may
coordinate their efforts.
3 Branches -
ANSWER
1) Legislative
2) Executive
3) Judicial
Separation of Powers -
ANSWER
Feature of the Constitution that requires each of the three branches of government—legislative,
executive, and judicial—to be relatively independent of the others so that one cannot control the
others. Power is shared among the three branches of government.
,Checks and Balances -
ANSWER
Constitutionally-mandated system that allows each branch of government to amend or veto acts of
another branch so as to prevent any one branch from exerting too much power.
Judicial Review -
ANSWER
Power given to the judicial branch in order to sustain checks and balances. Courts can overturn laws
passed by the legislature & signed by the president/governor if courts deem them unconstitutional.
Enables judges to question the legality and reasonableness of a gov't manager's administrative
actions. (Test question)
Federalism -
ANSWER
U.S. system of gov't. Power is distributed among different levels of gov't and no one level of gov't
has complete authority over all areas of public policy. No centeralized system of gov't in U.S.
Popular Sovereignty -
ANSWER
Basic concept of the Constitution. The idea that ultimate authority belongs to the voting people and
even a sovereign gov't is accountable to citizens.
Legal Constraints -
ANSWER
Derived from constitutions, statutes, and ordinances. They can include limits on the type of tax, rate
of tax, and tax collection purposes.
Purpose
Term
Amount
Process -
ANSWER
Ways in which constitutions and charters specify whether the government can incur debt and limit
government borrowing. (PTAP)
,Reserved Clause -
ANSWER
Stems from the 10th Amendment to the U.S. Constitution. Powers not delegated to the Nat'l gov't,
nor prohibited to the states, are reserved to the states and the people. Nat'l gov't can influence
lower levels, but can't dictate the manner in which state & local gov't will operate.
Areas of Overlap in Governmental Responsibilities -
ANSWER
Nat'l and state gov'ts exercise authority in civil defense and the Nat'l Guard. For example, during
peacetime, Nat'l Guard units fall under the direction of state governors and meet the needs of the
state. During nat'l emergencies, these units are under command of the President, Commander in
Chief. State and local gov'ts have some responsibility for traffic safety. All 3 levels impact public
education.
Grants -
ANSWER
Money that is distributed to lower-level governments with the purpose of funding special projects.
Laboratories of Democracy -
ANSWER
Nickname given to state and local governments because they experiment with policies and
procedures that are later adopted at the nat'l level.
Performance Reporting -
ANSWER
Example of upward influence (laboratory of democracy). U.S. gov't requirement created in the 90s
for federal agencies . Process of collecting and distributing performance information; includes status
reporting, progress measurement, and forecasting.
Legislative -
ANSWER
Passes laws. House of Representatives and Senate form legislative branch of Nat'l gov't. Includes
Congressional Budget Office, the Library of Congress, Gov't Accountability Office, and Architect of the
Capitol.
, Executive -
ANSWER
Administers laws. Executes gov't programs. Includes the U.S. Departments of Education, Interior, and
Defense.
Judicial -
ANSWER
Interprets laws and exercises judicial review over actions of the other branches.
Municipal Governments -
ANSWER
The lowest level of government and exercises authority over a municipality (i.e. city, town, village).
Usually, the scope of its powers are determined by its delegated authority from the level of
government that creates it and the laws it passes are called ordinances.
U.S. Constitution -
ANSWER
A set of principles (guidelines) that describe the duties and powers of the U.S. government. Written
in 1787 and ratified in 1791. Has been amended 27 times. The first 10 amendments form the Bill of
Rights. Comprised of seven articles.
Article I -
ANSWER
Defines powers of the legislative branch. Power to enact law, collect taxes, coin money, raise armies
and declare war.
Article II -
ANSWER
Defines the role and power of the presidency and executive branch. Power to command armed
forces, grant pardons for offenses against the U.S., and to appoint ambassadors and Supreme Court
judges with the advice and consent of the Senate.
Article III -
