CGAP Public Sector Compliance and Regulations 1 — Questions and Answers
Question 1: Which federal law requires annual single audits for non-federal entities expending $750,000 or more in federal awards?
- Inspector General Act
- Single Audit Act as amended, implemented via 2 CFR Part 200 (Correct answer)
- Federal Acquisition Regulation
- Government Management Reform Act
Correct answer: Single Audit Act as amended, implemented via 2 CFR Part 200
The Single Audit Act, as amended and implemented through 2 CFR Part 200, requires a single organization-wide audit when federal expenditures meet the threshold.
Question 2: What is a 'major program' in the context of a Single Audit?
- Any federal program that received over $1 million in funding
- A federal program selected for compliance testing based on risk assessment criteria in 2 CFR Part 200 (Correct answer)
- All programs listed in the Schedule of Expenditures of Federal Awards
- Programs designated as high-risk by the awarding agency
Correct answer: A federal program selected for compliance testing based on risk assessment criteria in 2 CFR Part 200
Major programs are selected using a risk-based approach under 2 CFR Part 200, considering expenditure size, prior audit findings, and other risk factors.
Question 3: In the Yellow Book (GAGAS), which type of finding must auditors report when they identify non-compliance that is material to a major program?
- Significant deficiency
- Reportable condition
- Material weakness in internal control over compliance (Correct answer)
- Audit exception
Correct answer: Material weakness in internal control over compliance
Under GAGAS and Single Audit requirements, non-compliance that is material to a major program requires reporting a material weakness in internal control over compliance.
Question 4: What does the Schedule of Expenditures of Federal Awards (SEFA) report?
- Federal agency spending on domestic programs
- All federal awards expended by a non-federal entity during the audit period (Correct answer)
- Grant revenue received but not yet spent
- Performance metrics for federal grant programs
Correct answer: All federal awards expended by a non-federal entity during the audit period
The SEFA lists all federal awards expended by the auditee during the fiscal year and is a required supplementary schedule in a single audit.
Question 5: Under the Hatch Act, what primary restriction applies to most federal employees?
- They may not accept outside employment
- They may not engage in partisan political activity while on duty or in federal facilities (Correct answer)
- They may not hold elected office at any level
- They may not contribute to political campaigns
Correct answer: They may not engage in partisan political activity while on duty or in federal facilities
The Hatch Act restricts federal employees from engaging in partisan political activity while on duty, in a federal building, or using government resources.
Question 6: Which government-wide regulation governs the procurement of goods and services by federal agencies?
- 2 CFR Part 200
- Federal Acquisition Regulation (FAR) (Correct answer)
- OMB Circular A-123
- Government Accountability Standards (Yellow Book)
Correct answer: Federal Acquisition Regulation (FAR)
The Federal Acquisition Regulation (FAR) is the primary set of rules governing the acquisition process for executive branch federal agencies.
CGAP Public Sector Compliance and Regulations 1
Which federal law requires annual single audits for non-federal entities expending $750,000 or more in federal awards?