CGFM Exam 1- Study Guide Solved 100%

AGA - Answer Association of Government Accountants CEAR - Answer Certificate of Excellence in Accountability Reporting CFO - Answer Chief Financial Officer CGFM - Answer Certified Government Financial Manager ERP - Answer Enterprise Resource Planning FASAB - Answer Federal Accounting Standards Advisory Board FASB - Answer Financial Accounting Standards Board FSIO - Answer Financial Systems Integration Office (within GSA) GAAP - Answer Generally Accepted Accounting Principles GAO - Answer Government Accountibility Office GASB - Answer Government Accounting Standards Board GPRA - Answer Government Performance and Results Act OMB - Answer Office of Management and Budget PAR - Answer Performance and Accountability Report SEA - Answer Service Efforts and Accomplishments Accountability - Answer Principle that in a democracy, government operates at the consent of the people. Therefore it must answer to the people for its actions and results, including the taking and using of the people's resources. Allotments - Answer 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. Anti-Deficiency Act - Answer At the federal level, a law stating that officials can be fined and/or jailed if they obligate the government to spend funds beyond the legally authorized purpose, time, or amount. Apportionmnets - Answer 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. Appropriated Budget - Answer Budget that has been passed by the legistlative branch; has effect of law. Appropriation - Answer A legistlative enactment (law, statute or ordinance) that creates spending authority; the legal authority to incur expenses and spend money. Attestation engagements - Answer 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. Authorization - Answer Legislative enactment that approves programs; prescribes what activities an agency may pursue if funding is available. Block grants - Answer Intergovernmental provision of resources for broadly defined purposes. Contrasts with category grants. Capital Budget - Answer Forecasts and controls spending for "big ticket" items that are acquired and used over a period of several years, such as construction projects and major equipment purchases. Used at state and local levels. Capital lease - Answer Capital leases is a lease fo real property that meets defined criteria requiring the government to report the property as it purchased long term debt Cash-flow budget - Answer Forecasts the timing as well as amount of cash flows for the year. Used to project required cash levels. Category grants - Answer 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 - Answer 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. CEAR - Answer An AGA program that helps federal agencies and their components to produce effective, high-quality Performance and Accountability Reports Certificate of Participation - Answer Form of shared government financing. In a typical form, several financial institutions share in a loan arrangement with a government entity. Charter - Answer Local government version of a constitution. States may provide for the establishment of local governments through charters checks and balances - Answer Process by which one branch of government (legislative, executiv or judicial) can constrain actions of the other branches. Flows from separation of powers. CFO Act - Answer 1990 law that, among other provisions, requires the federal government's major executive branch agencies to have a CFO. Prescribes duties and reporting requirements, and requires audited financial statements Commissions - Answer Government components established by law, statuted or ordinance. May be permanent or temporary. Because they are established by law, may have greater autonomy and authority than government components that are administratively established. Ex. Federal Communication Commision Components - Answer Organized units of government such as agencies, offices and departments. Found in all branches of government at all levels. Conflict of interest - Answer 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 Consumption Taxes - Answer Broad category of tax that includes sales, use, excise and value-added taxes Continuity of Operations - Answer Refers to the efforts to ensure the organization can sustain essential operations regardless of planned or unplanned incidents or disruptions. Covenant (bond) - Answer Legal requirements pertaining to a specific bond issue. Typically define the maturity date, revenue stream that will be used to repay the debt, interest rate and repayment schedule. May require a sinking fund and may specify conditions that must be met before new debt can be issued. Credit-rating agencies - Answer Independent organizations that assess the credit worthiness of debt. Three major rating agenciew are Standard & Poors, Moody's Investor Service and Fitches rating Data mining - Answer Using special, computer-based techniques such as filters and algorithms to extract meaningful information from large bodies of data Debt - Answer Money owed by the entity to individual or organizational creditors, ususally as a result of planned short- or long-term borrowing to finance government objectives Dedicated tax - Answer Taxes levied to finance a specific activity. Proceeds are deposited into an account restricted to that activity. Also referred to as earmarked or restricted taxes. Deficit - Answer Occurs when government expenditures for a specific fiscal period exceed revenues and/or financial resource inflows. Diligence - Answer Pursuing an event, action or assignment to a timely and sufficient end or close Discrestionary grants - Answer 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 Donations - Answer Voluntary contributions that confer no rights or benefits on the giver Due care - Answer 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 - Answer 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 Enterprise Resoure Planning System - Answer Major "end-to-end" computer system that links many functions and departments. Used to simplify and streamline financial management, and to integrate operation with financial management Estate tax - Answer Form of wealth tax. Levied on the estate of the deceased person before assets are distributed to heirs Ethics - Answer 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 - Answer Form of consumption tax. Levied on the consumption of a particular type of good or participation in a certain type of activity. Whereas general sales taxes are broad-based, excise taxes are more narrowly targeted. Executive orders - Answer Orders issued by the president, governor, or a local government's chief executive that do not violate laws or statutes and have substantial impact on policy and procedures of government. They carry less weight than laws because the legislature or next chief executive may overturn the previous order Fair - Answer Free from self-interest, prejudice or favoritism. Implies an elimination of one's own feelings, prejudices and desires so as to acheive a proper balance of conflicting interests. FASAB - Answer Defines GAAP for entities of the federal government; this includes the national government as a whole plus distinct components. Federalism - Answer Principle that government authority and responsibility is shared among different levels of government. (In practice, people often use the term 'federal' when referring to the national level of government) FASB - Answer Defines GAAP for private sector entities. Occasionally, GASB and FASAB make FASB standards applicable to national, state or local government Financial Management System - Answer 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 Statement Audit - Answer Examination of financial statements, accomplished by an independent auditor. Results in an opinon on whether the financial statements are presented fairly in accordance with GAAP or another comprehensive basis of accounting Financial Reports - Answer External reports that depict financial position and financial results of operations of the entity Formula grants - Answer 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 - Answer "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 - Answer Name often applied to the legislative branch at the state level General obligation bonds - Answer Form of government debt that is backed by the full faith and credit of the government. Contrasts with revenue bonds General-purpose government - Answer Entities at the national, state or local level that provide a broad range of services GASB - Answer Defines GAAP for state and local government entities Government Corporationgs - Answer Quasi-government entities formed to support businesslike functions where most, if not all, operating expenses are expected to be covered through revenues and fees, rather than from appropriated budget authority Government Performance and Results Act (GPRA) - Answer U.S. law passed in 1993; requires federal agencies to create long-term strategic plans. The strategic plans are followed by annual performance plans (currnetly performance budgets), performance measures and performance reports Grants - Answer Funds transferred from one level of government to another for specific or broad purposes Impartial - Answer Lack of favoritism. The absence of favor or prejudice. Not partial or biased. Treating or affecting all equally. Income tax - Answer 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 - Answer 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. Inheritance Tax - Answer Form of wealth tax. Levied on the person receiving the bequest Initiative - Answer Process that enables citizents to present their view of a problem and a proposed solution, rather then depending on a solution devised and enacted by the legislative branch. Allows direct citizen action to affect laws. Intangibles tax - Answer 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 - Answer 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 Judicial Review - Answer Principle by which the judicial branch may review actions by the legislative and executive branches and if appropriate, declare them unconstitutional or illegal. Flows from the separation of powers Lease-purchase - Answer Practice by which a government entity assumes a long-term lease on a capital asset and at the end of the lease period, the asset may transfer to the government. Usually, these long-term obligations do not require voter approval License fee - Answer Fee paid to the government for a specific privilege often related to an activity. Ranges from recreation (fishing licenses) to business (real estate licenses) Line-item veto - Answer Authority that allows the chief executive, such as a governor or mayor, to strke individual line items from the budget without vetoing the entire budget bill. US presidents do not have line-item veto authority. Lottery - Answer State-controlled gambling, used by many states as a source of revenue Management Cycle - Answer Steps in the continuous government management cycle include planning, programming, budgeting, operations, accounting, reporting and auditing Mediation - Answer Form of conflict resolution that involves an objective, third party mediator who tries to bring the disputants closer together. Unlike arbitration, mediation is usually voluntary and nonbinding Myers-Briggs Type Analysis - Answer Personality assessment based on the psychological theory of Carl Jung and the diagnostic instrument developbed by Isabel Briggs-Myers and her mother Katharine Briggs Notes - Answer Form of government debt used as a short-term financing source. Due to the short maturity period, the principle and interest for a note are usually retired simultaneously upon maturity (that is, no periodic interest payments) Object Class - Answer A budget or accounting category that defines the resources to be applied to specific types of inputs such as personnel, travel, tools, or supplies Objectivity - Answer Imposes the obligation to be impartial, intellectually honest, and free of conflicts of interest. Public officials are objective when they uphold the expectation of fairness, make decisions on merit, and do not allow prejudice or bias to influence thier decisionhs or behavior. Operating budget - Answer Defines level or resources to be applied in providing government programs and services; usually covers periods of one to two years. Ordinance - Answer Law enacted by a legislative body below the state level, such as of a county, city or town Outcome - Answer Ultimate results of government programs, such as number of gainfully employed graduates or reduction in road accidents. May take many months or years to achieve. Outcomes are often more difficult to measure than outputs. Output - Answer The goods or services produced, such as number of students trained or number of road miles repaired Performance and Accountability Report - Answer A single report that combines financial results and performance results. Recent requirement for federal executive agencies, but may be practiced at other levels of government. Term bonds - Answer A block of bonds in which all bonds in the issue mature on the same date or near the same date, usually many years after issuance. Contrasts with serial bonds. Tax expenditure - Answer Provision of tax law or regulation that uses tax deductions, tax credits, or income exemptions to encourage certain behavior by individuals or businesses. Called tax expenditure because it achieves, through the tax system, certain political, economic or social goals that the government would otherwise have to expend monies to accomplish. Tax equity - Answer Principle that taxes should treat taxpayers fairly. When applied to income taxes, horizontal equity means different taxpayers with the same income level pay the same amount of taxes, and vertical equity means taxpayers with different income levels pay different amounts of taxes. Situational Leadership - Answer Leadership model developed by Ken Blanchard and Paul Hersey. Encourages leaders to diagnose developmental level of employees and vary their leadership style accordingly. Serial bonds - Answer A bond issue featuring maturities, every year, over a period of several years. Contrasts with term bonds in which the entire issue matures on the same date or near the same date. Revenue bond - Answer Form of debt that is secured by a specific source of financing, such as revenue from the project being funded. Contrasts with general obligation bonds, which are backed by the full faith and credit of government. Reserved clause - Answer 10th Amendment to the U.S. Constitution. "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people." Referendum - Answer Process by which certain legislative actions are presented to voters before taking effect. Recall - Answer Process that enables voters to remove elected officials from office. Usually involves collecting signatures on a petition. If enough legitimate signatures are collected, the proposal is put to the vote. Project grant - Answer A type of grant that provides funding for specific purposes for limited periods of time. In contrast to formula grants, project grants are competitive and receipt of funding is less assured. Project grants are sometimes referred to as "discretionary grants." Gov't sovereignty vs. Popular sovereignty - Answer The national government cannot be sued by states or citizens without its permission. Pop: Principle that, while governments are sovereign entities, in a democracy, ultimate sovereignty rests with the people. Ordinance - Answer Law enacted by a legislative body below the state level, such as a county, city or town. Note - Answer Form of government debt used as a short-term financing source. Due to the short maturity period, the principle and interest for a note are frequently retired simultaneously upon maturity (that is, no periodic interest payments) Mediation - Answer Form of conflict resolution that involves an objective, third-party mediator who tries to bring the disputants closer together. Unlike arbitration, mediation is usually voluntary and nonbinding. Management cycle - Answer Refers to the sequence of activities entailed in managing a government and/or its operations. The activities include planning, programming, budgeting, operations, accounting, reporting and auditing. Line-item veto - Answer Authority that allows the chief executive, such as a governor or mayor, to strike individual line items from the budget without vetoing the entire budget bill. U.S. presidents do not have line-item veto authority. Lease-purchase - Answer Practice by which a government entity assumes a long-term lease on a capital asset and, at the end of the lease period, the asset may transfer to the government. Usually, these long-term obligations do not require voter approval. Judicial review - Answer Principle by which the judicial branch may review actions by the legislative and executive branches and, if appropriate, declare them unconstitutional or illegal. Flows from the separation of powers. Internal controls - Answer Organization and 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. Initiative - Answer Process that enables citizens to present their view of a problem and a proposed solution, rather than depending on a solution devised and enacted by the legislative branch. Allows direct citizen action to affect laws. Ethics - Answer A complex system of discipline that civilized societies impose on themselves through laws, customs, standards, social etiquette and other rules to govern moral conduct. Due care - Answer 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. Covenant (bond) - Answer Legal requirements pertaining to a specific bond issue. Typically defines the maturity date, revenue stream that will be used to repay the debt, interest rate and repayment schedule. May require a sinking fund and may specify conditions that must be met while the bonds are outstanding, and/or before new debt can be issued. Authorization - Answer Legislative enactment that approves programs; prescribes what activities an agency may pursue if funding is available. Appropriation - Answer A legislative enactment (law, statute or ordinance) that creates spending authority; the legal authority to incur expenses and spend money. Apportionment - Answer Definitions may vary at different levels of government. At the federal level, this is OMB's approval to use a portion of the legislatively approved budgetary authority. Anti-Deficiency Act - Answer At the federal level, a law stating that officials can be fined and/or jailed if they obligate the government to spend funds beyond the legally authorized purpose, time or amount. Allotment - Answer 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. Federal Accounting Standards Advisory Board (FASAB) - Answer Defines GAAP for entities of the federal government; this includes the national government as a whole plus distinct components. Financial Accounting Standards Board (FASB) - Answer Defines GAAP for private sector entities. Occasionally, GASB and FASAB make FASB standards applicable to state or local or the national, governments, respectively Generally Accepted Government Auditing Standards (GAGAS) - Answer Issued by the Government Accountability Office (GAO), to define the expected levels of performance for the conduct of an audit or attestation of a government organization, program, activity, or function(also called government auditing standards or Yellow Book). Governmental Accounting Standards Board (GASB) - Answer Defines GAAP for state and local government entities. Government Performance and Results Act (GPRA) - Answer U.S. law passed in 1993; requires federal agencies to create long-term strategic plans. The strategic plans are followed by annual performance plans (currently performance budgets), and annual performance reports. (The law has been updated with the Government Performance and Results Act Modernization Act, enacted in 2010.) Fundamental Ethical Princile - Answer Public service is a public trust. GPEFR - Answer General Purpose External Financial Reports CCR - Answer Citizen Centric Report, a 4-page report promulgated by the AGA Government borrowing is constrained by... - Answer ...constitutions and statutes, bond covenants, and debt policies. project grant - Answer discretionary grant formula grant - Answer categorical or block grant the federal government has ___ but not ___ debt limits. - Answer statutory, but not constitutional attributes of the income tax - Answer broad-based, progressive and constitute a major source of financing for national and state governments (not local); low administrative cost, high compliance rates attributes of wealth taxes - Answer real property, personal property, intangibles and estate and inheritance taxes; costly to administer; major source of revenue for local governments, primarily real property taxes attributes of consumption taxes - Answer sales, use, excise, and VAT. Regressive; low compliance rates; major source of financing for most state governments and many local entities three long-term financing options; one short - Answer bonds, lease-purchase agreements and CoP; notes two typical way gov't lowers interest costs in debt issues - Answer securing third-party insurance; state guarantees The appropriated budget is - Answer primarily legal authority to spend, also an expression of public policy, a financial plan, and an important communications device. The primary purpose of the budget PROCESS is - Answer to prioritize gov't expenditures and allocate financial resources to fund them. separation of power - Answer legislature INFORMS policy, executive IMPLEMENTS policy in ADMINISTRATION, and the judicial exercises JUDICIAL REVIEW. Government authority is founded in... - Answer constitutions or charters E-Gov Act of 2002 - Answer requires internet-based technology and procedures to safeguard privacy PII - Answer Personally identifiable information: identify, locate, or contact a specific individual PIA - Answer privacy impact assessments; required for federal agencies NIST - Answer National Institute of Standards and Technology; promulgates standards for data security in government systems. AFR - Answer Agency Financial Report AGA - Answer Association of Government Accountants BFELoB - Answer Budget Formulation and Execution Line of Business CAFR - Answer Comprehensive Annual Financial Report CEAR - Answer Certificate of Excellence in Accountability Reporting CFO - Answer Chief Financial Officer CGFM - Answer Certified Government Financial Manager ERP - Answer Enterprise Resource Planning FASAB - Answer Federal Accounting Standards Advisory Board FASB - Answer Financial Accounting Standards Board GAAP - Answer Generally Accepted Accounting Principles GAAS - Answer Generally Accepted Auditing Standards GAGAS - Answer Generally Accepted Government Auditing Standards GAO - Answer Government Accountability Office GAS - Answer Government Auditing Standards GASB - Answer Governmental Accounting Standards Board GPRA - Answer Government Performance and Results Act GPRAMA - Answer Government Performance and Results Act Modernization Act MD&A - Answer Management Discussion and Analysis NIST - Answer National Institute of Standards and Technology OMB - Answer Office of Management and Budget PAR - Answer Performance and Accountability Report SEA - Answer Service Efforts and Accomplishments SPFI - Answer Summary of Performance and Financial Information Accountability - Answer In a democracy, government operates by the consent of the people. It must answer to, the people for its actions and results, including the taking and using of people's resources Allotment - Answer 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 gives budgetary authority to specific components within the agency. Anti-Deficiency Act - Answer At the federal level, a law stating that officials can be fined/jailed if they obligate the government to spend funds beyond legally authorized purpose, time or amount. Apportionment - Answer At the federal level, OMB approval to use a portion of the legislatively approved budgetary authority.