CGA Compliance & Legal Considerations 2 — Questions and Answers
Question 1: Under 2 CFR Part 200, what is the threshold for a single audit (Uniform Guidance audit)?
- $500,000 in federal expenditures
- $750,000 in federal expenditures (Correct answer)
- $1,000,000 in federal expenditures
- $250,000 in federal expenditures
Correct answer: $750,000 in federal expenditures
The Single Audit threshold under 2 CFR Part 200 is $750,000 in federal expenditures in a fiscal year.
Question 2: Which document outlines the specific terms, conditions, and compliance requirements binding a grant recipient?
- The Notice of Funding Opportunity (NOFO)
- The Notice of Award (NOA) (Correct answer)
- The Federal Register
- The OMB Circular
Correct answer: The Notice of Award (NOA)
The Notice of Award is the legally binding document that specifies the terms and conditions a recipient must comply with.
Question 3: A grantee discovers a subrecipient has been charging unallowable costs to a federal award. What is the grantee's FIRST obligation?
- Terminate the subaward immediately
- Notify the federal awarding agency
- Require the subrecipient to repay the disallowed costs (Correct answer)
- Issue a corrective action plan to the subrecipient
Correct answer: Require the subrecipient to repay the disallowed costs
The pass-through entity is responsible for ensuring disallowed costs are returned; requiring repayment is the direct first step before escalating.
Question 4: Which principle ensures that grant funds are used only for costs that are necessary and reasonable for the project?
- Allocability
- Allowability (Correct answer)
- Consistency
- Reasonableness
Correct answer: Allowability
Allowability requires that costs comply with federal cost principles, are necessary, and are authorized by the award terms.
Question 5: A recipient organization has a written travel policy that applies uniformly to all projects. Under 2 CFR Part 200, which cost principle does this practice satisfy?
- Allocability
- Consistency (Correct answer)
- Reasonableness
- Documentation
Correct answer: Consistency
Consistency requires that costs are treated uniformly across federally funded and non-federally funded activities.
Question 6: What is the primary purpose of the Federal Funding Accountability and Transparency Act (FFATA)?
- To establish audit requirements for federal grantees
- To require public disclosure of federal awards and subawards (Correct answer)
- To set allowable cost standards for grant recipients
- To mandate environmental reviews for federally funded projects
Correct answer: To require public disclosure of federal awards and subawards
FFATA requires federal agencies and recipients to report award and subaward data publicly on USASpending.gov.
Question 7: Which of the following is an example of a material weakness in internal controls over a federal grant?
- A minor clerical error in a quarterly report
- Failure to segregate duties between authorization and payment functions (Correct answer)
- A one-day delay in submitting a financial report
- Using a single bank account for multiple small grants
Correct answer: Failure to segregate duties between authorization and payment functions
Lack of segregation of duties is a classic material weakness because it allows errors or fraud to go undetected.
CGA Compliance & Legal Considerations 2
Under 2 CFR Part 200, what is the threshold for a single audit (Uniform Guidance audit)?