CGFM Exam 2023-2034 questions with
complete solutions latest update
Budget Accounting and Procedures Act of 1950 - Answer-Requires the head of each
federal agency to establish and maintain I/C's.
Federal Managers Financial Integrity Act of 1982 (FMFIA) - Answer-requires the head of
each agency to evaluate internal 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) - Answer-requires the audit of state and
local governments and npo's receiving federal funding
(ICOFR) - Answer-Internal Controls Over Financial Reporting
Chief Financial Officers Act of 1990 (CFO Act): - Answer-required 10 federal agencies
to produce audited annual financial reports that included a report on internal control.
expanded in 1994 by GMRA
INTERNAL CONTROLS - Answer-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).
Earned Value Management (EVM) - Answer-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 - Answer-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
,Limits of Regression Analysis - Answer-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 - Answer-inspecting, cleaning, transforming, and modeling data to find
useful information, conclusions, and support decision making
Data Mining - Answer-(Predictive) sorting through large data sets and using filters and
algorithms to pick out relationships
** See strengths and weaknesses
Data Mining Strengths and Weaknesses - Answer-* 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 - Answer-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
Competitive Source Analysis - Answer-Used to determine if there is a benefit to
contracting government services to the private sector:
1) Conduct a management study
2) Prepare a performance work statement - defines the expected outputs/results
3) Project the in-house and contract costs
4) Select the best alternative - combination of performance and price
Liquidity Ratios - Answer-Determines entities ability to meet creditors demands:
1) Current Ratio
2) Quick Ratio
, Current Ratio = current assets/current liabilities - Answer-current assets = cash and
those assets that will become cash within one year (including inventories)
Current liabilities = those that are due and payable within one year
Should be a ratio of 2:1
Quick Ratio = Cash and equivalents, and receivables/current liabilities - Answer-
Removes the uncertainty over inventories
Ideal ratio should be 1:1
The best measure of the entity's ability to meet short-term obligations because
numerator are liquid assets
Asset efficiency and Turn-Over ratios - Answer-Efficiency in using assets and
converting them to cash.
1) Receivables Ratios
2) Inventory Ratios
Receivables Ratios - Answer-ex., percentage of tax collections/taxes levied. Rating
agencies expect 98-99% range.
Days outstanding = Avg receivables/Annual revenues x 365
Avg receivables = (Beg of year receivables + end of year receivables)/2
Inventory Ratios - Answer-helps determine risk of loss from spoilage, pilfering,
obsolescence, etc.
Inventory turnover = Revenues from sales of inventory/Avg inventory during the period
Avg inventory = 365/Inventory Turnover
Debt Burden - Answer-Burden of 15-20% and above considered "high" by rating
agencies. Measured by:
* outstanding LTD/population
* outstanding LTD/assessed property values
Ability to repay Debt - Answer-Excess revenues over operating expenditures/
Principal payment + interest expense
complete solutions latest update
Budget Accounting and Procedures Act of 1950 - Answer-Requires the head of each
federal agency to establish and maintain I/C's.
Federal Managers Financial Integrity Act of 1982 (FMFIA) - Answer-requires the head of
each agency to evaluate internal 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) - Answer-requires the audit of state and
local governments and npo's receiving federal funding
(ICOFR) - Answer-Internal Controls Over Financial Reporting
Chief Financial Officers Act of 1990 (CFO Act): - Answer-required 10 federal agencies
to produce audited annual financial reports that included a report on internal control.
expanded in 1994 by GMRA
INTERNAL CONTROLS - Answer-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).
Earned Value Management (EVM) - Answer-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 - Answer-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
,Limits of Regression Analysis - Answer-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 - Answer-inspecting, cleaning, transforming, and modeling data to find
useful information, conclusions, and support decision making
Data Mining - Answer-(Predictive) sorting through large data sets and using filters and
algorithms to pick out relationships
** See strengths and weaknesses
Data Mining Strengths and Weaknesses - Answer-* 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 - Answer-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
Competitive Source Analysis - Answer-Used to determine if there is a benefit to
contracting government services to the private sector:
1) Conduct a management study
2) Prepare a performance work statement - defines the expected outputs/results
3) Project the in-house and contract costs
4) Select the best alternative - combination of performance and price
Liquidity Ratios - Answer-Determines entities ability to meet creditors demands:
1) Current Ratio
2) Quick Ratio
, Current Ratio = current assets/current liabilities - Answer-current assets = cash and
those assets that will become cash within one year (including inventories)
Current liabilities = those that are due and payable within one year
Should be a ratio of 2:1
Quick Ratio = Cash and equivalents, and receivables/current liabilities - Answer-
Removes the uncertainty over inventories
Ideal ratio should be 1:1
The best measure of the entity's ability to meet short-term obligations because
numerator are liquid assets
Asset efficiency and Turn-Over ratios - Answer-Efficiency in using assets and
converting them to cash.
1) Receivables Ratios
2) Inventory Ratios
Receivables Ratios - Answer-ex., percentage of tax collections/taxes levied. Rating
agencies expect 98-99% range.
Days outstanding = Avg receivables/Annual revenues x 365
Avg receivables = (Beg of year receivables + end of year receivables)/2
Inventory Ratios - Answer-helps determine risk of loss from spoilage, pilfering,
obsolescence, etc.
Inventory turnover = Revenues from sales of inventory/Avg inventory during the period
Avg inventory = 365/Inventory Turnover
Debt Burden - Answer-Burden of 15-20% and above considered "high" by rating
agencies. Measured by:
* outstanding LTD/population
* outstanding LTD/assessed property values
Ability to repay Debt - Answer-Excess revenues over operating expenditures/
Principal payment + interest expense
