CGFM MCQ 3 — Questions and Answers
Question 1: In federal financial management, an 'apportionment' is issued by:
- The agency's Chief Financial Officer
- The Office of Management and Budget (OMB) (Correct answer)
- The Government Accountability Office (GAO)
- The Congressional Budget Office (CBO)
Correct 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.
Question 2: The Yellow Book (Government Auditing Standards) is published by:
- The American Institute of CPAs (AICPA)
- The Institute of Internal Auditors (IIA)
- The Government Accountability Office (GAO) (Correct answer)
- The Office of Inspector General (OIG)
Correct answer: The Government Accountability Office (GAO)
The GAO publishes Government Auditing Standards (the Yellow Book), which establishes standards for audits of government entities and entities receiving government funds.
Question 3: Which type of government audit focuses on whether a program is achieving its intended results?
- Financial statement audit
- Attestation engagement
- Performance audit (Correct answer)
- Compliance audit
Correct answer: Performance audit
Performance audits examine program effectiveness, efficiency, and economy — assessing whether programs achieve their intended results.
Question 4: Under GASB 68, a government employer that participates in a cost-sharing multiple-employer pension plan must report:
- The plan's total net pension liability on its own balance sheet
- Its proportionate share of the collective net pension liability (Correct answer)
- Only pension contributions made during the current year
- Pension expense only when contributions exceed the actuarially determined amount
Correct answer: Its proportionate share of the collective net pension liability
GASB 68 requires each employer in a cost-sharing plan to report its proportionate share of the collective net pension liability.
Question 5: The Federal Managers' Financial Integrity Act (FMFIA) requires federal agency heads to:
- Submit annual audited financial statements to Congress
- Evaluate and report on the adequacy of internal controls and financial systems (Correct answer)
- Establish an independent Inspector General in each agency
- Prepare a five-year strategic plan updated annually
Correct 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.
Question 6: A government's 'fund balance' for a governmental fund is best described as:
- The difference between total assets and total liabilities
- The difference between current financial resources and current financial claims (Correct answer)
- The net position available for general government operations
- Retained earnings carried forward from prior fiscal years
Correct answer: The difference between current financial resources and current financial claims
Fund balance in governmental funds represents the excess of current financial resources (assets) over current financial claims (liabilities) using the modified accrual basis.
Question 7: Which OMB circular establishes requirements for the financial management systems of federal agencies?
- OMB Circular A-11
- OMB Circular A-123
- OMB Circular A-127 (Correct answer)
- OMB Circular A-136
Correct answer: OMB Circular A-127
OMB Circular A-127 establishes policies and standards for executive branch financial management systems.
CGFM MCQ 3
In federal financial management, an 'apportionment' is issued by: