Maryland Grant Management
Certification Exam Practice Questions
And Correct Answers (Verified Answers)
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1. A Maryland agency receives a federal grant and must determine which
regulations govern cost principles. Which framework is primarily
applicable for uniform administrative requirements, cost principles,
and audit requirements?
A. FAR Part 15
B. State Procurement Code only
C. 2 CFR Part 200 Uniform Guidance
D. GAAP Standards only
The Uniform Guidance under 2 CFR Part 200 establishes the federal
framework for administrative requirements, cost principles, and
audit requirements for federal awards.
2. Which document is the primary binding agreement that outlines how
grant funds must be used and the conditions of award?
A. Internal audit report
B. Procurement contract
C. Notice of Award (NOA)
, D. Financial disclosure form
The Notice of Award formally establishes the legal and financial
terms under which the grant recipient must operate.
3. What is the primary purpose of cost allowability tests under federal
grant rules?
A. To maximize spending flexibility
B. To ensure only indirect costs are tracked
C. To ensure costs are necessary, reasonable, and allocable
D. To eliminate all administrative expenses
Allowability tests ensure that grant expenditures are appropriate,
justified, and directly connected to the grant objectives.
4. Which of the following is considered a direct cost in grant
management?
A. Building depreciation shared across programs
B. Executive office utilities
C. Salaries of staff working directly on the grant project
D. General administrative overhead allocation
Direct costs are those clearly and specifically identifiable to a
particular grant or project.
5. What is the main objective of a subrecipient monitoring process?
A. Increase state tax revenue
B. Reduce federal oversight requirements
C. Ensure subrecipients comply with grant requirements and
performance goals
D. Replace external audits
Subrecipient monitoring ensures compliance, performance
accountability, and proper use of grant funds.
6. Which financial document best tracks cumulative expenditures against
approved budget categories?
, A. Procurement plan
B. Organizational chart
C. Budget vs. actual report
D. Grant proposal narrative
A budget vs. actual report compares planned spending with actual
expenditures to monitor financial performance.
7. What is the primary risk of inadequate internal controls in grant
management?
A. Faster project completion
B. Increased funding allocation
C. Fraud, waste, and misuse of funds
D. Improved reporting accuracy
Weak internal controls increase the likelihood of financial
mismanagement and noncompliance.
8. Which activity best demonstrates cost allocation principles?
A. Charging all costs to one grant for simplicity
B. Ignoring time tracking
C. Distributing shared costs based on usage or benefit received
D. Recording only indirect costs
Cost allocation ensures shared expenses are distributed fairly based
on actual benefit received by each program.
9. Which of the following is required for all federal grant recipients
regarding record retention?
A. 1 year after grant closeout
B. 2 years after application submission
C. At least 3 years after final financial report submission
D. Indefinite retention of only summary reports
Federal regulations generally require retention of grant records for a
minimum period after final reporting and closeout.
Certification Exam Practice Questions
And Correct Answers (Verified Answers)
Plus Rationale 2026 Q&A| Instant
Download Pdf
1. A Maryland agency receives a federal grant and must determine which
regulations govern cost principles. Which framework is primarily
applicable for uniform administrative requirements, cost principles,
and audit requirements?
A. FAR Part 15
B. State Procurement Code only
C. 2 CFR Part 200 Uniform Guidance
D. GAAP Standards only
The Uniform Guidance under 2 CFR Part 200 establishes the federal
framework for administrative requirements, cost principles, and
audit requirements for federal awards.
2. Which document is the primary binding agreement that outlines how
grant funds must be used and the conditions of award?
A. Internal audit report
B. Procurement contract
C. Notice of Award (NOA)
, D. Financial disclosure form
The Notice of Award formally establishes the legal and financial
terms under which the grant recipient must operate.
3. What is the primary purpose of cost allowability tests under federal
grant rules?
A. To maximize spending flexibility
B. To ensure only indirect costs are tracked
C. To ensure costs are necessary, reasonable, and allocable
D. To eliminate all administrative expenses
Allowability tests ensure that grant expenditures are appropriate,
justified, and directly connected to the grant objectives.
4. Which of the following is considered a direct cost in grant
management?
A. Building depreciation shared across programs
B. Executive office utilities
C. Salaries of staff working directly on the grant project
D. General administrative overhead allocation
Direct costs are those clearly and specifically identifiable to a
particular grant or project.
5. What is the main objective of a subrecipient monitoring process?
A. Increase state tax revenue
B. Reduce federal oversight requirements
C. Ensure subrecipients comply with grant requirements and
performance goals
D. Replace external audits
Subrecipient monitoring ensures compliance, performance
accountability, and proper use of grant funds.
6. Which financial document best tracks cumulative expenditures against
approved budget categories?
, A. Procurement plan
B. Organizational chart
C. Budget vs. actual report
D. Grant proposal narrative
A budget vs. actual report compares planned spending with actual
expenditures to monitor financial performance.
7. What is the primary risk of inadequate internal controls in grant
management?
A. Faster project completion
B. Increased funding allocation
C. Fraud, waste, and misuse of funds
D. Improved reporting accuracy
Weak internal controls increase the likelihood of financial
mismanagement and noncompliance.
8. Which activity best demonstrates cost allocation principles?
A. Charging all costs to one grant for simplicity
B. Ignoring time tracking
C. Distributing shared costs based on usage or benefit received
D. Recording only indirect costs
Cost allocation ensures shared expenses are distributed fairly based
on actual benefit received by each program.
9. Which of the following is required for all federal grant recipients
regarding record retention?
A. 1 year after grant closeout
B. 2 years after application submission
C. At least 3 years after final financial report submission
D. Indefinite retention of only summary reports
Federal regulations generally require retention of grant records for a
minimum period after final reporting and closeout.
