CGAP Finance 5

Question 1

A government receives a $500,000 federal grant that requires matching funds of 20% from local resources. How much must the government contribute from its own funds?

Accepted Answer

$100,000

Answer

A 20% local match on a $500,000 grant means the government must contribute $500,000 × 20% = $100,000 from non-federal sources.

Question 2

Under the Uniform Guidance (2 CFR Part 200), what is the threshold above which a single audit is required for a non-federal entity?

Accepted Answer

$750,000 in federal expenditures in a fiscal year

Answer

The single audit threshold is $750,000 in federal expenditures during the entity's fiscal year, as established by the 2 CFR Part 200 Uniform Guidance.

Question 3

A government's pension plan has a plan net position of $80 million and a total pension liability of $120 million. What is the net pension liability?

Accepted Answer

$40 million

Answer

The net pension liability equals total pension liability minus plan net position: $120M − $80M = $40 million, representing the government's unfunded pension obligation.

Question 4

Which of the following transactions would be reported as an 'other financing use' in a governmental fund?

Accepted Answer

Transfer of resources to another fund

Answer

Interfund transfers out are classified as other financing uses in governmental funds, separate from expenditures, to distinguish routine transfers from operating activities.

Question 5

A government auditor is assessing the reasonableness of a government's property tax levy. Which factor is least relevant to this assessment?

Accepted Answer

The credit ratings of the government's outstanding bonds

Answer

Bond credit ratings reflect investor perception of creditworthiness but do not directly determine the reasonableness of the property tax levy amount, which depends on assessed values, collection rates, and budgeted needs.

CGAP - Certified Government Auditing Professional Practice Test

CGAP - Certified Government Auditing Professional Practice Test

CGAP Finance 5