CGFO Treasury Operations & Cash Management 2

Question 1

A government finance officer is evaluating bank proposals for depository services. Which factor is MOST critical in assessing bank safety for public deposits?

Accepted Answer

FDIC insurance coverage and bank capital adequacy ratios

Answer

FDIC insurance limits and bank capital adequacy ratios directly determine the safety of public deposits held at a financial institution.

Question 2

Under the GFOA's best practices, what is the recommended approach to structuring a government's banking RFP (Request for Proposals)?

Accepted Answer

Evaluate cost, services, safety, and capability comprehensively

Answer

GFOA recommends a comprehensive RFP evaluation covering cost of services, available services, bank safety, and operational capability.

Question 3

What is 'positive pay' in the context of government treasury operations?

Accepted Answer

A fraud prevention tool where the government transmits issued check data to the bank for verification

Answer

Positive pay is a fraud prevention service in which the entity transmits a file of issued checks to its bank, which then matches presented items against that file before paying.

Question 4

Which investment is typically PROHIBITED for government entities under most state statutes governing public fund investment?

Accepted Answer

Speculative derivative instruments

Answer

Speculative derivative instruments are generally prohibited for public fund investment because they violate the safety-first principle required by law.

Question 5

A government entity receives a large grant payment in mid-month. The treasury officer should FIRST:

Accepted Answer

Assess the payment's timing relative to near-term disbursement needs before investing

Answer

Liquidity analysis must precede investment decisions to ensure funds are available for upcoming expenditures before committing to any investment horizon.

(CGFO) Certified Government Finance Officer Practice Test

(CGFO) Certified Government Finance Officer Practice Test

CGFO Treasury Operations & Cash Management 2