Mixed Deck — All CGFM Topics Flashcards

What does 'transparency' mean as an ethical principle in governmental financial management?

Answer: Making financial information clear, complete, accurate, and accessible to enable informed decisions by stakeholders

Financial transparency means providing stakeholders with accurate, complete, and accessible financial information to support public accountability and informed decision-making.

In federal financial management, an 'apportionment' is issued by:

Answer: The Office of Management and Budget (OMB)

OMB issues apportionments to divide an agency's appropriation into segments (usually quarterly) to control the rate of spending.

What is a stable economy defined as? I. An equilibrium in the international balance of payments II. Full employment III. Economist growth IV. Frequent changes in Price

Answer: All except IV

A stable economy is characterized by an equilibrium in the international balance of payments, indicating stable trade and financial flows, along with full employment, meaning most people who want to work can find jobs. It also includes economic growth, signifying an expanding economy. Frequent changes in price (inflation or deflation) are indicators of economic instability, not stability, making 'All except IV' the correct choice.

Governments may also report on an interim basis in addition to financial interim reports:

Answer: The status of construction projects and cash flows

In addition to standard financial interim reports, governments often provide operational reports on an interim basis. These reports offer insights into specific ongoing activities and resource utilization. Examples include updates on the progress of construction projects and detailed analyses of cash flows, which are crucial for operational management and accountability.

What is the Treasury's Financial Management Service (now Bureau of the Fiscal Service) primarily responsible for?

Answer: Disbursing federal payments, collecting federal revenue, and managing the federal government's cash

The Bureau of the Fiscal Service (formerly FMS) manages the government's finances by disbursing payments, collecting revenue, producing financial reports, and managing federal debt.

In government budgeting, an 'allotment' is best described as:

Answer: A subdivision of an apportionment used by an agency to control expenditures

An allotment is an agency's internal subdivision of an apportionment, used to further control the rate of spending within the agency.

Under GASB 54, 'Committed' fund balance is established by:

Answer: Formal action of the government's highest level of decision-making authority

Committed fund balance requires formal action by the government's highest level of decision-making authority (e.g., legislation or ordinance) to impose and remove the constraint.

The Federal Managers' Financial Integrity Act (FMFIA) requires federal agency heads to:

Answer: Evaluate and report on the adequacy of internal controls and financial systems

FMFIA requires agency heads to annually evaluate and report to the President and Congress on the adequacy of internal controls and financial management systems.

Due to the Governmental Funds' present emphasis on financial measurement, they do not report:

Answer: Either Capital Assets or Long-term debt

Governmental Funds operate under the 'current financial resources measurement focus' and the modified accrual basis of accounting. This means they primarily report on current assets, current liabilities, and changes in financial resources available for spending. Consequently, they do not typically report non-current items like capital assets (e.g., buildings, equipment) or long-term debt (e.g., bonds payable) directly within their fund financial statements, as these are considered long-term economic resources or obligations.

Which concept describes the obligation to use public resources only for their intended purpose?

Answer: Propriety

Propriety in government financial management means resources are used only for their intended, authorized, and legal purposes, consistent with legislative intent.

Which OMB circular establishes requirements for the financial management systems of federal agencies?

Answer: OMB Circular A-127

OMB Circular A-127 establishes policies and standards for executive branch financial management systems.

What is an 'apportionment' in federal budget execution?

Answer: The OMB's distribution of appropriated funds to agencies in amounts available for obligation in specified time periods

An apportionment is OMB's action distributing appropriated budget authority to federal agencies by time period, program, or activity to prevent over-obligation of funds.

How many examinations make up the full CGFM certification?

Answer: Three exams

The CGFM credential requires passing three separate examinations covering governmental environment, governmental accounting, and governmental financial management.

Under governmental accounting, long-term debt of governmental funds is reported in:

Answer: The government-wide statement of net position

Long-term debt is not reported in governmental fund balance sheets but is reported in the government-wide statement of net position, which uses full accrual accounting.

Under GASB standards, which basis of accounting is used for governmental funds?

Answer: Modified accrual basis

Governmental funds use the modified accrual basis of accounting, recognizing revenues when measurable and available and expenditures when the liability is incurred.

What is the primary mission of the Association of Government Accountants (AGA)?

Answer: Advancing government accountability professionals

The AGA's mission is to advance government accountability professionals by providing education, certification (including the CGFM), and leadership opportunities.

Under federal appropriations law, the 'bona fide needs rule' states that:

Answer: Funds may only be obligated for needs arising during the period of availability

The bona fide needs rule requires that appropriations only be obligated for genuine needs that exist during the appropriation's period of availability.

The AGA Code of Ethics states that the following would be unethical for a government agency contract manager to do:

Answer: A conflict of Interest

A conflict of interest arises when a government agency contract manager's personal interests could potentially influence their professional judgment or actions in awarding or managing contracts. This is considered unethical because it undermines fairness, transparency, and public trust in government procurement processes. The AGA Code of Ethics emphasizes impartiality and avoiding situations where personal gain could compromise official duties.

Encumbrances in governmental accounting represent:

Answer: Commitments related to unperformed contracts for goods or services

Encumbrances represent commitments (purchase orders, contracts) for which goods or services have not yet been received, reserving the appropriation balance.

Which federal law requires agencies to annually assess and report on the effectiveness of internal controls over financial reporting?

Answer: Federal Managers' Financial Integrity Act (FMFIA)

The FMFIA of 1982 requires agency heads to assess and report annually on the adequacy of their internal accounting and administrative controls.