CGAP Public Sector Compliance and Regulations 2 — Questions and Answers
Question 1: What is the primary purpose of the Inspector General Act of 1978?
- To establish independent oversight bodies within federal agencies to detect and prevent fraud, waste, and abuse (Correct answer)
- To create the GAO as the congressional audit arm
- To require annual financial statement audits of all agencies
- To establish the Office of Management and Budget
Correct answer: To establish independent oversight bodies within federal agencies to detect and prevent fraud, waste, and abuse
The Inspector General Act created statutory Offices of Inspector General to conduct independent audits, investigations, and inspections within federal agencies.
Question 2: Under the False Claims Act, who can bring a 'qui tam' lawsuit on behalf of the federal government?
- Only U.S. Attorneys
- Any private citizen (whistleblower) with knowledge of fraud against the government (Correct answer)
- Only employees of the agency being defrauded
- Inspectors General only
Correct answer: Any private citizen (whistleblower) with knowledge of fraud against the government
The qui tam provision of the False Claims Act allows private individuals (relators) to file lawsuits alleging fraud against the government and share in recovered funds.
Question 3: What does 'prompt payment' legislation require of federal agencies?
- Agencies must pay employee salaries before the 15th of each month
- Agencies must pay vendors by a specified due date or pay interest on late payments (Correct answer)
- Agencies must process grant reimbursements within 30 days
- Agencies must approve invoices within 5 business days
Correct answer: Agencies must pay vendors by a specified due date or pay interest on late payments
The Prompt Payment Act requires federal agencies to pay invoices by the due date or pay interest penalties to vendors for late payment.
Question 4: Which concept in government compliance auditing refers to the totality of laws, regulations, and contracts that an audited entity must follow?
- Compliance universe
- Regulatory framework
- Legal and regulatory requirements (Correct answer)
- Compliance matrix
Correct answer: Legal and regulatory requirements
In government auditing, 'legal and regulatory requirements' encompasses the full set of laws, regulations, grant terms, and contracts binding the entity.
Question 5: What is 'pass-through entity' responsibility under federal grant management?
- The pass-through entity must perform audits of sub-recipients
- The pass-through entity must monitor sub-recipients and ensure federal requirements flow down (Correct answer)
- The pass-through entity assumes all liability for sub-recipient fraud
- The pass-through entity must approve all sub-recipient expenditures in advance
Correct answer: The pass-through entity must monitor sub-recipients and ensure federal requirements flow down
Pass-through entities are responsible for monitoring sub-recipients, ensuring that federal compliance requirements are passed down, and reviewing sub-recipient audit findings.
Question 6: What is the significance of the 'cognizant agency' concept in federal single audits?
- It is the agency responsible for coordinating audit follow-up and resolution for an auditee (Correct answer)
- It refers to the agency that funds the largest share of federal awards to the entity
- It is the GAO's point of contact for each audit engagement
- It is the agency that selects independent auditors for grantees
Correct answer: It is the agency responsible for coordinating audit follow-up and resolution for an auditee
The cognizant agency is the federal agency assigned to coordinate oversight and audit resolution for a particular non-federal entity receiving federal funds.
CGAP Public Sector Compliance and Regulations 2
What is the primary purpose of the Inspector General Act of 1978?