CGFM TEST 2 2025
1) Legal Accountability
- answers-public officials are accountable for the establishment of controls to
ensure that transactions are processed properly
2) Performance Accountability
- answers-acting in an efficient, effective, or economic manner.
3) Fiscal Accountability
- answers-raising and allocation of resources to accomplish objectives
4) Operational Accountability
- answers-stewardship of public resources
Accountability of Tax Dollars Act (2002)
- answers-required all executive branch entities to produce audited financial
statements (but can be waived if annual budget authority less than $25M)
Allotment
- answers-Agencies distribute apportionment to organizational units via allotments
and sub-allotments
American Recovery and Reinvestment Act (2009)
- answers-** important because it required online reporting of the use of
government funds awarded for the purpose of stimulating the economy -
Recovery.gov
Anti-Deficiency Act - Apportionment process
- answers-Managed by OMB, agencies have to submit spending plans and
apportionment requests on a schedule:
*Cat A apportionment - for operating items, funding apportioned by time period
(e.g., quarterly)
,*Cat B apportionment - by program/ activity/project
*Cat AB - combo of timing and project
*Cat C - for future years
Apportionment and Allotment
- answers-budget apportionment made by OMB to depts (often made quarterly to
ensure funds are available for the entire year)
Allotments made by depts to operating units or program
Unspent $$ - some gov't allow dept to roll unused allotments to following year.
Sometimes moved to unalloted account at end of quarter, requiring approval before
moving to a different budget category
Assignment of Costs - 3 ways
- answers-In order of preference ...
1) directly tracing the costs used in the production of outputs (preferred method)
2) cause and effect basis - the activity is the link between the output and costs (e.g.,
airplane fuel using hours by consumption rate)
3) allocation - based on a reasonable and consistent basis, least expensive to
calculate
Audits of State and Local Government Units (ASLGU)
- answers-issued in 1974 by AICPA in response to several government financial
melt-downs
* recognized the principles in the GAAFR and made them the accepted principles
for all state and locals within the auditing committee, but there was no requirement
for compliance (due to their sovereign status)
Baseline Budgeting
- answers-operations will continue unchanged in the new year, with exception to
population served
no increase/decrease in service levels
calculated cost would be same as prior year plus inflation and change in population
,benefit = requires little analysis, conservative approach useful in poor economic
conditions
disadvantage = assumption that all programs will continue unchanged, no review if
they are worthwhile and achieving intended purposes
Bases of Accounting
- answers-*Deals with the recognition of financial transactions or events
1) Cash:
no recognition of receivables or payables, reflects only inflows and outflows of
cash
2) Accrual: (federal gov't)
revenues are reported in the period they are earned and expenses are reported in the
period they are incurred, tax/grant revenue reported when due, revenue received
prior to being due is deferred, prepaid expenses are assets until incurred, inventory
is an asset until consumed (used by fed gov't, businesses, and locals for business
type funds)
3) Modified Accrual: (state and locals)
revenues are recognized when they become "measurable" and "available" to fund
expenditures in the current period.
Measurable = amount can be determined
Available = within 60 days
expenditures are recognized when goods and services provided, even if claims
incurred in a prior period (ex. compensated absences, opeb, judgments)
Bond Premiums/Discounts
- answers-amount of bond received over/under face value, is amortized over the
life of the bond
Bonds
- answers-Long-term debt instruments, length usually no longer than the life of the
asset
Certificates of Participation (COPs) - participants (usually banks and insurance
co's) pool funds to loan to the government
, refunding bonds
Break-Even Fee
- answers-need an estimate of how may services will be provided
unit price = fixed cost(ex. overhead) + (volume x unit variable cost [ex. supplies
and materials])/volume
Budget and Accounting Act of 1921
- answers-* created Bureau of Budget (now OMB)
* required Pres to submit single budget to Congress
* Assigned GAO to investigate issues with public funds
Budget Enforcement Act of 1990
- answers-passed tot ry to control spending, identified discretionary (salaries) vs.
mandatory (entitlement programs) spending.
Budget monitoring - centralized control
- answers-1) assessment of gov't performance
2) evaluate relevance of priorities for delivery of services
** also ensures that revenues are inline with projections, and if not, that necessary
reductions are made so no end of year deficit (ex., executive order from
governor/mayor mandating cuts)
Budget Organization
- answers-1) Organizational unit - unit responsible for carrying out operations
*** dept, division, agency, bureau, etc
2) Function - major service classification
*** public safety, health, public works
3) Program - specific activity within a function
*** tax admin, clean air, traffic enforcement
4) Category/Source - type of revenue
*** taxes, licenses/permits, intergovernmental, charges for services, misc
5) Character - current expenditure, capital, debt service
1) Legal Accountability
- answers-public officials are accountable for the establishment of controls to
ensure that transactions are processed properly
2) Performance Accountability
- answers-acting in an efficient, effective, or economic manner.
3) Fiscal Accountability
- answers-raising and allocation of resources to accomplish objectives
4) Operational Accountability
- answers-stewardship of public resources
Accountability of Tax Dollars Act (2002)
- answers-required all executive branch entities to produce audited financial
statements (but can be waived if annual budget authority less than $25M)
Allotment
- answers-Agencies distribute apportionment to organizational units via allotments
and sub-allotments
American Recovery and Reinvestment Act (2009)
- answers-** important because it required online reporting of the use of
government funds awarded for the purpose of stimulating the economy -
Recovery.gov
Anti-Deficiency Act - Apportionment process
- answers-Managed by OMB, agencies have to submit spending plans and
apportionment requests on a schedule:
*Cat A apportionment - for operating items, funding apportioned by time period
(e.g., quarterly)
,*Cat B apportionment - by program/ activity/project
*Cat AB - combo of timing and project
*Cat C - for future years
Apportionment and Allotment
- answers-budget apportionment made by OMB to depts (often made quarterly to
ensure funds are available for the entire year)
Allotments made by depts to operating units or program
Unspent $$ - some gov't allow dept to roll unused allotments to following year.
Sometimes moved to unalloted account at end of quarter, requiring approval before
moving to a different budget category
Assignment of Costs - 3 ways
- answers-In order of preference ...
1) directly tracing the costs used in the production of outputs (preferred method)
2) cause and effect basis - the activity is the link between the output and costs (e.g.,
airplane fuel using hours by consumption rate)
3) allocation - based on a reasonable and consistent basis, least expensive to
calculate
Audits of State and Local Government Units (ASLGU)
- answers-issued in 1974 by AICPA in response to several government financial
melt-downs
* recognized the principles in the GAAFR and made them the accepted principles
for all state and locals within the auditing committee, but there was no requirement
for compliance (due to their sovereign status)
Baseline Budgeting
- answers-operations will continue unchanged in the new year, with exception to
population served
no increase/decrease in service levels
calculated cost would be same as prior year plus inflation and change in population
,benefit = requires little analysis, conservative approach useful in poor economic
conditions
disadvantage = assumption that all programs will continue unchanged, no review if
they are worthwhile and achieving intended purposes
Bases of Accounting
- answers-*Deals with the recognition of financial transactions or events
1) Cash:
no recognition of receivables or payables, reflects only inflows and outflows of
cash
2) Accrual: (federal gov't)
revenues are reported in the period they are earned and expenses are reported in the
period they are incurred, tax/grant revenue reported when due, revenue received
prior to being due is deferred, prepaid expenses are assets until incurred, inventory
is an asset until consumed (used by fed gov't, businesses, and locals for business
type funds)
3) Modified Accrual: (state and locals)
revenues are recognized when they become "measurable" and "available" to fund
expenditures in the current period.
Measurable = amount can be determined
Available = within 60 days
expenditures are recognized when goods and services provided, even if claims
incurred in a prior period (ex. compensated absences, opeb, judgments)
Bond Premiums/Discounts
- answers-amount of bond received over/under face value, is amortized over the
life of the bond
Bonds
- answers-Long-term debt instruments, length usually no longer than the life of the
asset
Certificates of Participation (COPs) - participants (usually banks and insurance
co's) pool funds to loan to the government
, refunding bonds
Break-Even Fee
- answers-need an estimate of how may services will be provided
unit price = fixed cost(ex. overhead) + (volume x unit variable cost [ex. supplies
and materials])/volume
Budget and Accounting Act of 1921
- answers-* created Bureau of Budget (now OMB)
* required Pres to submit single budget to Congress
* Assigned GAO to investigate issues with public funds
Budget Enforcement Act of 1990
- answers-passed tot ry to control spending, identified discretionary (salaries) vs.
mandatory (entitlement programs) spending.
Budget monitoring - centralized control
- answers-1) assessment of gov't performance
2) evaluate relevance of priorities for delivery of services
** also ensures that revenues are inline with projections, and if not, that necessary
reductions are made so no end of year deficit (ex., executive order from
governor/mayor mandating cuts)
Budget Organization
- answers-1) Organizational unit - unit responsible for carrying out operations
*** dept, division, agency, bureau, etc
2) Function - major service classification
*** public safety, health, public works
3) Program - specific activity within a function
*** tax admin, clean air, traffic enforcement
4) Category/Source - type of revenue
*** taxes, licenses/permits, intergovernmental, charges for services, misc
5) Character - current expenditure, capital, debt service
