CGFM Exam 3 - Financial Management
Functions UPDATED ACTUAL Exam
Questions and CORRECT Answers
Prompt Payment Act - CORRECT ANSWER - A federal law that requires federal agencies to
pay interest to companies on bills not paid within 30 days of invoice or completion of work.
Cash Management Improvement Act - CORRECT ANSWER - passed to improve the transfer
of federal funds between the federal government and the states, territories, and the District of
Columbia
31 CFR Part 2018 Management of Federal Agency Disbursements - CORRECT ANSWER -
requires federal agencies to disburse payments via electronic funds transfer, with few exceptions
Lockbox - CORRECT ANSWER - An arrangement whereby receipts are mailed directly from
payers to a post office box that is serviced by a designated bank
float - CORRECT ANSWER - the period between the time the check is issued and the time it
is presented for payment at the payer's bank
Zero Balance Account (ZBA) - CORRECT ANSWER - account into which cash from a
master account is transferred at the close of the banking day to cover checks and debits presented
for payment
Concentration Bank Services - CORRECT ANSWER - expediting the consolidation of
geographically dispersed deposits into a central account
Collection services - CORRECT ANSWER - includes over the counter collection for tax and
utility bills, processing paper checks, operating a lockbox
, Payment Services - CORRECT 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 - CORRECT ANSWER - lines of credit or revolving credit facilities or
as loans to fund short term cash needs
compensating balance - CORRECT ANSWER - A requirement by some banks requiring
depositors to maintain minimum cash balances in their bank accounts.
external shared services providers - CORRECT ANSWER - departments/ agencies who
provide services to organizations outside of their own
internal shared services providers - CORRECT ANSWER - larger agencies that decided to
consolidate, standardize and streamline financial and other business processes within their own
department, and leverage a service center approach to provide system hosting
What should be considered when thinking about moving to a shared service provider? -
CORRECT ANSWER - the agency's computing platform is no longer capable of being
updated to mandatory requirements, and/or is not supported by the vendor
Payables Management - CORRECT ANSWER - payee information maintenance, payment
warehousing, payment execution, and payment confirmation and follow-up
Receivables Management - CORRECT ANSWER - customer information maintenance,
receivable establishment, debt management, and collections and offsets
Reporting - CORRECT ANSWER - general reporting, external reporting, internal reporting,
and responding to ad hoc queries
Funds Management - CORRECT ANSWER - budget preparation, budget formulation, funds
allocation, budget execution, and funds control
Functions UPDATED ACTUAL Exam
Questions and CORRECT Answers
Prompt Payment Act - CORRECT ANSWER - A federal law that requires federal agencies to
pay interest to companies on bills not paid within 30 days of invoice or completion of work.
Cash Management Improvement Act - CORRECT ANSWER - passed to improve the transfer
of federal funds between the federal government and the states, territories, and the District of
Columbia
31 CFR Part 2018 Management of Federal Agency Disbursements - CORRECT ANSWER -
requires federal agencies to disburse payments via electronic funds transfer, with few exceptions
Lockbox - CORRECT ANSWER - An arrangement whereby receipts are mailed directly from
payers to a post office box that is serviced by a designated bank
float - CORRECT ANSWER - the period between the time the check is issued and the time it
is presented for payment at the payer's bank
Zero Balance Account (ZBA) - CORRECT ANSWER - account into which cash from a
master account is transferred at the close of the banking day to cover checks and debits presented
for payment
Concentration Bank Services - CORRECT ANSWER - expediting the consolidation of
geographically dispersed deposits into a central account
Collection services - CORRECT ANSWER - includes over the counter collection for tax and
utility bills, processing paper checks, operating a lockbox
, Payment Services - CORRECT 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 - CORRECT ANSWER - lines of credit or revolving credit facilities or
as loans to fund short term cash needs
compensating balance - CORRECT ANSWER - A requirement by some banks requiring
depositors to maintain minimum cash balances in their bank accounts.
external shared services providers - CORRECT ANSWER - departments/ agencies who
provide services to organizations outside of their own
internal shared services providers - CORRECT ANSWER - larger agencies that decided to
consolidate, standardize and streamline financial and other business processes within their own
department, and leverage a service center approach to provide system hosting
What should be considered when thinking about moving to a shared service provider? -
CORRECT ANSWER - the agency's computing platform is no longer capable of being
updated to mandatory requirements, and/or is not supported by the vendor
Payables Management - CORRECT ANSWER - payee information maintenance, payment
warehousing, payment execution, and payment confirmation and follow-up
Receivables Management - CORRECT ANSWER - customer information maintenance,
receivable establishment, debt management, and collections and offsets
Reporting - CORRECT ANSWER - general reporting, external reporting, internal reporting,
and responding to ad hoc queries
Funds Management - CORRECT ANSWER - budget preparation, budget formulation, funds
allocation, budget execution, and funds control
