CGFM EXAM 1 ALL QUESTIONS AND
ANSWERS
doctrine of separation of powers provides a foundation for - Correct Answers -
government financial management
govt entity can be classed as - Correct Answers -general or special purpose
US constitution written - Correct Answers -1787
Most school district in US - Correct Answers -Independent District
Role of federal CFO - Correct Answers -codified in the Chief Financial Officer act of
1990
telework - Correct Answers -working from home or other remote location
Anti-fraud policies - Correct Answers -a formal code of conduct
frames the behavioral expectations for individuals
No. of the Federal Reserve Bank - Correct Answers -12 regional banks in major cities
if budget has not passed by the start of the new fiscal year - Correct Answers -
Government does not have legal authority to operate
supplemental appropriation
budget amendment - Correct Answers -executive inform the legislative branch that more
funds are needed due to depletion of funds before the end of fiscal year
most power in budget - Correct Answers -legislative branch
Appropriation of funds - Correct Answers -budget bill that actually makes funds
available
Authorization of funds - Correct Answers -bill that approves programs
it prescribes what an agency will do if funding is available
Expanded Government framework - Correct Answers -includes these steps: planning,
programming, budgeting, operations, accounting, reporting and auditing.
,Type of performance audit - Correct Answers -o Program effectiveness and results
audits address the effectiveness of a program and typically measure the extent to which
a program is achieving its goals and objectives.
o Economy and efficiency audit objectives concern whether an entity is acquiring,
protecting and using its resources in the most productive manner to achieve program
objectives.
o Program effectiveness and results audit objectives, as well as economy and efficiency
audit objectives, are often interrelated and may be concurrently addressed in a
performance audit.
major form of government revenue - Correct Answers -tax
progressive tax rate - Correct Answers -income tax
higher incomes, higher tax rate
Tax expenditures - Correct Answers -Exceptions to tax laws and regulations
They cost the public in terms of lost revenue that could otherwise be used to fund
programs or reduce tax rate
3 broad categories of tax - Correct Answers -income
Wealth
Consumption
Income Tax - Correct Answers -Base - all income
Graduated tax
Exemptions and deductions apply to enhance horizontal and vertical equity
Medicare tax rate - Correct Answers -1.45% no cap
sinking fund - Correct Answers -money set aside on a periodic basis to retire term
bonds at maturity
FSIO - Correct Answers -Financial Systems Integration Office (within GSA)
SEA - Correct Answers -Service Efforts and Accomplishments
Attestation engagements (External Audits ) - Correct Answers -Engagement primarily
concerned with examining, reviewing 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.
Block grants - Correct Answers -Intergovernmental provision of resources for broadly
defined purposes. Contrasts with category grants.
,Category grants - Correct Answers -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 - Correct Answers -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.
Checks and balances - Correct Answers -Process by which one branch of government
(legislative, executive or judicial) can constrain actions of the other branches. Flows
from separation of powers. No branch of govt is completely independent of other
Conflict of interest - Correct Answers -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
COOP-Continuity of Operations - Correct Answers -Refers to the efforts to ensure the
organization can sustain essential operations regardless of planned or unplanned
incidents or disruptions.
Earmarking (dedicated collections or tax) - Correct Answers -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
project grants/discretionary grant - Correct Answers -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
Estate tax - Correct Answers -Form of wealth tax. Levied on the estate of the deceased
person before assets are distributed to heirs
Ethics - Correct Answers -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
Financial Reports - Correct Answers -External reports that depict financial position and
financial results of operations of the entity
Formula grants - Correct Answers -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
, Income tax - Correct Answers -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 - Correct Answers -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. also free of undue influence.
Inheritance Tax - Correct Answers -Form of wealth tax. Levied on the person receiving
the bequest
Myers-Briggs Type Analysis - Correct Answers -Personality assessment based on the
psychological theory of Carl Jung and the diagnostic instrument developbed by Isabel
Briggs-Myers and her mother Katharine Briggs
Operating budget - Correct Answers -Defines level or resources to be applied in
providing government programs and services; usually covers periods of one to two
years.
Situational Leadership - Correct Answers -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 - Correct Answers -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.
Gov't sovereignty vs. Popular sovereignty - Correct Answers -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.
Judicial review - Correct Answers -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.
Appropriation - Correct Answers -A legislative enactment (law, statute or ordinance) that
creates spending authority; the legal authority to incur expenses and spend money.
GAGAS (Generally Accepted Government Auditing Standards) - Correct Answers -
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).
Fundamental Ethical Princile - Correct Answers -Public service is a public trust.
ANSWERS
doctrine of separation of powers provides a foundation for - Correct Answers -
government financial management
govt entity can be classed as - Correct Answers -general or special purpose
US constitution written - Correct Answers -1787
Most school district in US - Correct Answers -Independent District
Role of federal CFO - Correct Answers -codified in the Chief Financial Officer act of
1990
telework - Correct Answers -working from home or other remote location
Anti-fraud policies - Correct Answers -a formal code of conduct
frames the behavioral expectations for individuals
No. of the Federal Reserve Bank - Correct Answers -12 regional banks in major cities
if budget has not passed by the start of the new fiscal year - Correct Answers -
Government does not have legal authority to operate
supplemental appropriation
budget amendment - Correct Answers -executive inform the legislative branch that more
funds are needed due to depletion of funds before the end of fiscal year
most power in budget - Correct Answers -legislative branch
Appropriation of funds - Correct Answers -budget bill that actually makes funds
available
Authorization of funds - Correct Answers -bill that approves programs
it prescribes what an agency will do if funding is available
Expanded Government framework - Correct Answers -includes these steps: planning,
programming, budgeting, operations, accounting, reporting and auditing.
,Type of performance audit - Correct Answers -o Program effectiveness and results
audits address the effectiveness of a program and typically measure the extent to which
a program is achieving its goals and objectives.
o Economy and efficiency audit objectives concern whether an entity is acquiring,
protecting and using its resources in the most productive manner to achieve program
objectives.
o Program effectiveness and results audit objectives, as well as economy and efficiency
audit objectives, are often interrelated and may be concurrently addressed in a
performance audit.
major form of government revenue - Correct Answers -tax
progressive tax rate - Correct Answers -income tax
higher incomes, higher tax rate
Tax expenditures - Correct Answers -Exceptions to tax laws and regulations
They cost the public in terms of lost revenue that could otherwise be used to fund
programs or reduce tax rate
3 broad categories of tax - Correct Answers -income
Wealth
Consumption
Income Tax - Correct Answers -Base - all income
Graduated tax
Exemptions and deductions apply to enhance horizontal and vertical equity
Medicare tax rate - Correct Answers -1.45% no cap
sinking fund - Correct Answers -money set aside on a periodic basis to retire term
bonds at maturity
FSIO - Correct Answers -Financial Systems Integration Office (within GSA)
SEA - Correct Answers -Service Efforts and Accomplishments
Attestation engagements (External Audits ) - Correct Answers -Engagement primarily
concerned with examining, reviewing 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.
Block grants - Correct Answers -Intergovernmental provision of resources for broadly
defined purposes. Contrasts with category grants.
,Category grants - Correct Answers -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 - Correct Answers -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.
Checks and balances - Correct Answers -Process by which one branch of government
(legislative, executive or judicial) can constrain actions of the other branches. Flows
from separation of powers. No branch of govt is completely independent of other
Conflict of interest - Correct Answers -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
COOP-Continuity of Operations - Correct Answers -Refers to the efforts to ensure the
organization can sustain essential operations regardless of planned or unplanned
incidents or disruptions.
Earmarking (dedicated collections or tax) - Correct Answers -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
project grants/discretionary grant - Correct Answers -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
Estate tax - Correct Answers -Form of wealth tax. Levied on the estate of the deceased
person before assets are distributed to heirs
Ethics - Correct Answers -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
Financial Reports - Correct Answers -External reports that depict financial position and
financial results of operations of the entity
Formula grants - Correct Answers -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
, Income tax - Correct Answers -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 - Correct Answers -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. also free of undue influence.
Inheritance Tax - Correct Answers -Form of wealth tax. Levied on the person receiving
the bequest
Myers-Briggs Type Analysis - Correct Answers -Personality assessment based on the
psychological theory of Carl Jung and the diagnostic instrument developbed by Isabel
Briggs-Myers and her mother Katharine Briggs
Operating budget - Correct Answers -Defines level or resources to be applied in
providing government programs and services; usually covers periods of one to two
years.
Situational Leadership - Correct Answers -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 - Correct Answers -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.
Gov't sovereignty vs. Popular sovereignty - Correct Answers -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.
Judicial review - Correct Answers -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.
Appropriation - Correct Answers -A legislative enactment (law, statute or ordinance) that
creates spending authority; the legal authority to incur expenses and spend money.
GAGAS (Generally Accepted Government Auditing Standards) - Correct Answers -
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).
Fundamental Ethical Princile - Correct Answers -Public service is a public trust.
