GPC Financial Management & Budgeting 2 — Questions and Answers
Question 1: What is the primary purpose of a Single Audit for organizations receiving federal funds?
- To review a grant proposal before it is submitted to funders
- To examine an organization's financial statements and federal award compliance (Correct answer)
- To evaluate only the programmatic outcomes of a single federal grant
- To assess the qualifications of grant writing staff
Correct answer: To examine an organization's financial statements and federal award compliance
A Single Audit examines an organization's financial statements and its compliance with requirements of federal programs when expenditures exceed $750,000.
Question 2: At what dollar threshold of annual federal expenditures does an organization become subject to a Single Audit under 2 CFR Part 200?
- $500,000
- $750,000 (Correct answer)
- $1,000,000
- $250,000
Correct answer: $750,000
Under the Uniform Guidance, non-federal entities that expend $750,000 or more in federal awards during a fiscal year must undergo a Single Audit.
Question 3: What is the Schedule of Expenditures of Federal Awards (SEFA)?
- A document listing all proposed costs in a grant budget
- A financial schedule detailing all federal grant expenditures during the audit fiscal year (Correct answer)
- A schedule of grant application deadlines for the fiscal year
- A list of federal agencies that have approved grant applications
Correct answer: A financial schedule detailing all federal grant expenditures during the audit fiscal year
The SEFA is a required financial schedule listing all federal awards expended during the audit period, organized by federal program and CFDA/ALN number.
Question 4: What is 'drawdown' in the context of federal grant financial management?
- The process of reducing the grant budget due to poor performance
- The act of requesting and receiving grant funds from the awarding agency (Correct answer)
- The final closeout report submitted to the grantor
- The transfer of grant funds between fiscal years
Correct answer: The act of requesting and receiving grant funds from the awarding agency
Drawdown is the process by which a grantee requests and receives payment of grant funds from the federal awarding agency, typically through an electronic payment system.
Question 5: Which financial document shows the comparison between budgeted and actual grant expenditures?
- Balance sheet
- Budget vs. actual variance report (Correct answer)
- Statement of cash flows
- Profit and loss statement
Correct answer: Budget vs. actual variance report
A budget vs. actual variance report compares planned expenditures with actual spending, highlighting deviations that may require corrective action.
Question 6: How is 'program income' defined in federal grant management?
- The total amount of the grant award received by the organization
- Gross income earned by the grantee that is directly generated by supported grant activities (Correct answer)
- The indirect cost recovery received from the funder
- Revenue generated by the organization's non-grant-funded programs
Correct answer: Gross income earned by the grantee that is directly generated by supported grant activities
Program income is gross income earned by a non-federal entity that is directly generated by a supported activity or earned as a result of the federal award.
Question 7: What does 'carryover' mean in federal grant management?
- The transfer of unobligated funds from one budget period to the next with funder authorization (Correct answer)
- The process of automatically extending the grant beyond its original end date
- Moving expenses from one budget category to another within the same period
- Carrying over reporting requirements to the next fiscal year
Correct answer: The transfer of unobligated funds from one budget period to the next with funder authorization
Carryover refers to authorization to retain and use unspent federal grant funds from one budget period in the subsequent budget period, typically requiring prior approval.
GPC Financial Management & Budgeting 2
What is the primary purpose of a Single Audit for organizations receiving federal funds?