CGFM EXAM 3 FINAL PAPER QUESTIONS
AND SOLUTIONS
◉ Prompt Payment Act
Answer: law that requires federal agencies to pay invoices in a
timely manner, generally 30 days after receipt of the invoice
requires that cash discount should be taken when offered
◉ Cash Management Improvement Act
Answer: passed to improve the transfer of federal funds between
the government states, and territories. objectives include: 1
minimize the time between transfers of funds to a state and the
payout for program purposes. 2 ensure that federal funds are
available when requested 3 assess an interest liability to the
federal government and or the states to compensate for the lost
value of the funds
◉ 31 CFR Part 208 Management of Federal Agency
Disbursements
Answer: requires federal agencies to disburse payments via
electronic funds transfer, with few exceptions. this regulation has
resulted in an impressive improvement in the management of
federal funds
◉ float
,Answer: the period between the time the the check is issued and
the time it is presented for the payment at the payer's bank .
◉ The Federal Reserve System
Answer: Was founded by congress in 1913 as the central bank of
the united states
◉ The Federal Reserve system composition
Answer: Board of Governors nominated by the president &
confirmed by the Senate
12 Federal Reserve Bank or districts
◉ The 4 federal Reserve duties
Answer: 1) conducting the nation's Monetary Policy
2) Supervising and regulating banking institutions and protecting
the credit rights of consumers
3) Maintaining the stability of the financial system and containing
systemic risk that may arise in financial markets
4) providing certain financial
◉ Collection services
Answer: includes over the counter collection for tax and utility
bills, processing paper checks, operating a lockbox
◉ Concentration Banking Services
,Answer: expediting the consolidation of geographically dispersed
deposits into a central account
◉ Zero balance account (ZBA)
Answer: establishing accounts into which cash from a master
account is transferred at the close of the banking day to cover
checks presented for payment
◉ Payment Services
Answer: includes the processing paper checks as well as providing
for electronic payments through the automated clearing house or
via wire transfers
◉ Short term borrowings
Answer: lines of credit or revolving credit facilities or as loans to
fund short term cash needs
◉ compensating balance
Answer:
◉ 7 Collection Systems
Answer: Checks and Cash Deposits
Lockbox Services
Concentration bank systems
over the counter collections
, credit and debit cards
electronic collections
prepaid drawdown accounts
◉ Warrants (bootcamp notes)
Answer: Treasury Warrant set up the disbursement account
warrant at state level is like a draft or a check not negotiated at
commercial banks
◉ Way to disburse
Answer: Warrants and checks
Electronic Payments
Automatic debit and credit card payments
Electronic Data Interchange (EDI)
Electronic Benefit Cards
◉ advantages Electronic Payments
Answer: lower for preparing , mailing and processing payments
reduction of the control risk associated with the storage of blank
checks
the availability of float eliminated
◉ types of electronic payments
Answer: Wires - very expensive- irrevocable
AND SOLUTIONS
◉ Prompt Payment Act
Answer: law that requires federal agencies to pay invoices in a
timely manner, generally 30 days after receipt of the invoice
requires that cash discount should be taken when offered
◉ Cash Management Improvement Act
Answer: passed to improve the transfer of federal funds between
the government states, and territories. objectives include: 1
minimize the time between transfers of funds to a state and the
payout for program purposes. 2 ensure that federal funds are
available when requested 3 assess an interest liability to the
federal government and or the states to compensate for the lost
value of the funds
◉ 31 CFR Part 208 Management of Federal Agency
Disbursements
Answer: requires federal agencies to disburse payments via
electronic funds transfer, with few exceptions. this regulation has
resulted in an impressive improvement in the management of
federal funds
◉ float
,Answer: the period between the time the the check is issued and
the time it is presented for the payment at the payer's bank .
◉ The Federal Reserve System
Answer: Was founded by congress in 1913 as the central bank of
the united states
◉ The Federal Reserve system composition
Answer: Board of Governors nominated by the president &
confirmed by the Senate
12 Federal Reserve Bank or districts
◉ The 4 federal Reserve duties
Answer: 1) conducting the nation's Monetary Policy
2) Supervising and regulating banking institutions and protecting
the credit rights of consumers
3) Maintaining the stability of the financial system and containing
systemic risk that may arise in financial markets
4) providing certain financial
◉ Collection services
Answer: includes over the counter collection for tax and utility
bills, processing paper checks, operating a lockbox
◉ Concentration Banking Services
,Answer: expediting the consolidation of geographically dispersed
deposits into a central account
◉ Zero balance account (ZBA)
Answer: establishing accounts into which cash from a master
account is transferred at the close of the banking day to cover
checks presented for payment
◉ Payment Services
Answer: includes the processing paper checks as well as providing
for electronic payments through the automated clearing house or
via wire transfers
◉ Short term borrowings
Answer: lines of credit or revolving credit facilities or as loans to
fund short term cash needs
◉ compensating balance
Answer:
◉ 7 Collection Systems
Answer: Checks and Cash Deposits
Lockbox Services
Concentration bank systems
over the counter collections
, credit and debit cards
electronic collections
prepaid drawdown accounts
◉ Warrants (bootcamp notes)
Answer: Treasury Warrant set up the disbursement account
warrant at state level is like a draft or a check not negotiated at
commercial banks
◉ Way to disburse
Answer: Warrants and checks
Electronic Payments
Automatic debit and credit card payments
Electronic Data Interchange (EDI)
Electronic Benefit Cards
◉ advantages Electronic Payments
Answer: lower for preparing , mailing and processing payments
reduction of the control risk associated with the storage of blank
checks
the availability of float eliminated
◉ types of electronic payments
Answer: Wires - very expensive- irrevocable
