CGA Compliance & Legal Considerations 3 — Questions and Answers
Question 1: Under 2 CFR Part 200, program income earned during a grant period must be used in accordance with which default rule?
- It must be returned to the federal agency
- It is added to the award and used to further project objectives (Correct answer)
- It offsets the federal share of project costs
- It may be used for any organizational purpose
Correct answer: It is added to the award and used to further project objectives
The additive (addition) method is the default under 2 CFR §200.307, requiring program income to be added to award funds and used for project purposes.
Question 2: A grantee wants to re-budget 15% of a federal award from one direct cost category to another. What does this typically require?
- No action; rebudgeting is always permitted
- Prior written approval from the federal awarding agency (Correct answer)
- A formal grant amendment signed by both parties
- Notification to the awarding agency within 30 days after the change
Correct answer: Prior written approval from the federal awarding agency
Significant rebudgeting (often defined as 10% or more of the total award) generally requires prior written approval from the awarding agency.
Question 3: The Davis-Bacon Act requires that workers on federally funded construction projects be paid:
- The federal minimum wage
- The locally prevailing wage rate (Correct answer)
- A negotiated union wage
- At least 150% of the state minimum wage
Correct answer: The locally prevailing wage rate
The Davis-Bacon Act mandates that laborers and mechanics on covered federal construction projects receive the locally prevailing wage.
Question 4: Under the Drug-Free Workplace Act, federal grant recipients must do which of the following?
- Conduct random drug testing of all employees
- Publish a drug-free workplace policy statement and notify employees (Correct answer)
- Prohibit employees from off-site alcohol consumption
- Submit annual drug-free compliance certifications to each agency
Correct answer: Publish a drug-free workplace policy statement and notify employees
The Act requires recipients to establish and communicate a drug-free workplace policy to employees who work on the grant.
Question 5: Which federal law prohibits discrimination based on race, color, or national origin in programs receiving federal financial assistance?
- Title IX of the Education Amendments of 1972
- Section 504 of the Rehabilitation Act of 1973
- Title VI of the Civil Rights Act of 1964 (Correct answer)
- The Age Discrimination Act of 1975
Correct answer: Title VI of the Civil Rights Act of 1964
Title VI of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, and national origin in federally assisted programs.
Question 6: A grant recipient fails to submit required financial reports for two consecutive quarters. The awarding agency's MOST likely first enforcement action is:
- Immediate termination of the award
- Referral to the Office of Inspector General
- Suspension of award payments (Correct answer)
- Debarment of the recipient organization
Correct answer: Suspension of award payments
Suspending payments is a standard incremental enforcement action agencies take before escalating to termination or debarment.
Question 7: Which procurement method under 2 CFR Part 200 is appropriate for small purchases below the micro-purchase threshold without requiring competition?
- Sealed bids
- Competitive proposals
- Micro-purchase procedures (Correct answer)
- Sole source procurement
Correct answer: Micro-purchase procedures
Micro-purchase procedures allow purchases at or below the micro-purchase threshold ($10,000 as of 2020) without requiring competition, though price reasonableness must still be considered.
CGA Compliance & Legal Considerations 3
Under 2 CFR Part 200, program income earned during a grant period must be used in accordance with which default rule?