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The CGFM certification exam consists of three modules: Governmental Environment, Governmental Accounting, Financial Reporting and Budgeting, and Governmental Financial Management and Control. Each module contains multiple-choice questions and is designed to test candidates' knowledge and understanding of government financial management principles and practices. CGFM exam is administered at computer-based testing centers across the country and internationally.
NEW QUESTION # 61
To find a nationally recognized bond counsel, governments can consult ____________ which lists
- A. Financial Adviser
- B. All of these
- C. Tax-exempt bond counsel
- D. the Directory of Municipal Bond Dealers
Answer: D
NEW QUESTION # 62
According to the AGA Code of Ethics, a government agency contract manager using a vendor as a personal reference would constitute:
- A. a conflict of interest.
- B. fraud.
- C. nepotism.
- D. professional incompetence.
Answer: A
NEW QUESTION # 63
An agency benefit program allows employees who commute by public transit up to 10 free taxi trips home per calendar year. Employees can use the program for personal or family health emergencies. The most appropriate method to check for abuse of this program is
- A. requesting records from a random sample of employees to verify they used transit on the day they used the taxi services.
- B. using geographic information system data to determine if the destination addresses were hospitals or clinics.
- C. using program data to look for instances of individuals using the service more than 10 times per year.
- D. using personal data to determine if the destination address matches the employees home address.
Answer: A
Explanation:
Why Verify Transit Use Before Taxi Use?
* The program is intended for employees who commute by public transit. Verifying transit use on the day the taxi service was used ensures employees are adhering to program rules.
* Random sampling is cost-effective and practical for identifying abuse without needing to review all records.
Why Other Options Are Incorrect:
* A. Looking for individuals using the service more than 10 times:This only identifies overuse but does not confirm whether program rules were followed.
* B. Checking destination addresses for hospitals/clinics:This assumes all emergencies involve medical visits, which is not always the case.
* C. Matching destination addresses to home addresses:This does not confirm transit use and may not identify abuse of the program.
References and Documents:
* GAO Fraud Prevention Guide:Recommends using random sampling to check compliance with program rules.
* Best Practices for Internal Controls in Benefit Programs:Emphasizes verifying eligibility and usage to detect potential abuse.
NEW QUESTION # 64
A local government is reviewing the performance of a contractor that is collecting trash for the county.
Performance can be measured based upon the cost
- A. comparison with closest comparable jurisdiction.
- B. per employee.
- C. per ton of trash collected.
- D. per mile travelled.
Answer: C
Explanation:
Why Measure Performance Based on Cost per Ton of Trash Collected?
* Costper ton of trash collectedis a direct, objective, and quantifiable measure of the contractor's performance. It reflects how efficiently the contractor is operating relative to the amount of trash being managed.
* This measure aligns with the principle of output-based performance evaluation, which focuses on results (e.g., tons of trash collected) rather than inputs or unrelated factors.
Why Other Options Are Incorrect:
* A. Per mile traveled:Mileage is not directly tied to performance; it depends on the route structure and geography, not the quantity of trash collected.
* C. Comparison with closest comparable jurisdiction:While this may provide context, it is not a specific performance measure.
* D. Per employee:Employee count does not directly measure performance or efficiency in trash collection operations.
References and Documents:
* GAO Guide on Contract Performance Evaluation:Recommends using measurable and outcome- based metrics like cost per ton collected for performance reviews.
* Best Practices in Local Government Contracting (AGA):Highlights output-based measures for evaluating contractor performance.
NEW QUESTION # 65
____________ are in anticipation of improved market conditions in which to issue longterm debt. It typically matures within 15-45 days.
- A. Tax-exempt commercial paper (TECP)
- B. Variable rate demand notes (VRDNs)
- C. Revenue anticipation notes (RANs)
- D. Bond anticipation notes (BANs)
Answer: A
NEW QUESTION # 66
"A cash received as a loan is shown as revenue not as a liability, on the balance sheet. To correct for such cases, most cash accounting systems recognize not only cash but also other assets and liabilities arising through prior cash transactions. This adjustment, though, does not alter the fact that outstanding obligations have been incurred but not accounted for, thus overstating the available balance." This is an example of possible mishandlings after the selection of ________________.
- A. Modified basis of accounting
- B. None of these
- C. Cash basis of accounting
- D. Accrual basis of accounting
Answer: C
NEW QUESTION # 67
Non-reciprocal interfund activities include interfund transfers of assets (e.g. cash, or goods) without repayment and .
- A. Both A&B
- B. Interfund exchange
- C. Cost Allocation
- D. Interfund reimbursement
Answer: D
NEW QUESTION # 68
The National Committee on Municipal Accounting (NCMA), sponsored by the Municipal Finance Officers Association (later Government Finance Association [GFOA]), published in what is called, for obvious reasons, the "Blue Book." The third Blue book was titled as:
- A. None of these
- B. Blue book III
- C. Governmental Accounting, Auditing, and Financial Reporting
- D. Federal Accounting and Financial Reporting
Answer: C
NEW QUESTION # 69
Repo is of one-day maturity Interest is based
There are five types of repos.
on the federal rate.
- A. Tri-party
- B. Open
- C. Overnight
- D. Term
Answer: C
NEW QUESTION # 70
How may a city parks and recreation director meaningfully assess the performance of the department's grounds maintenance division?
- A. use a single measure of citizen satisfaction with parks and recreation
- B. evaluate funds spent on grounds maintenance
- C. compare cost per acre maintained to cost per acre maintained in another jurisdiction
- D. analyze grounds maintenance staffing levels
Answer: C
Explanation:
Why Is This the Best Measure for Performance?
* Comparing thecost per acre maintainedto that of another jurisdiction provides a meaningful benchmark for performance evaluation. It allows the director to assess how efficiently the department is operating relative to similar organizations.
* This comparison ensures that the department is managing resources effectively and identifies potential areas for improvement.
Why Other Options Are Incorrect:
* A. Use a single measure of citizen satisfaction:While citizen satisfaction is important, it is subjective and does not provide insight into operational efficiency.
* B. Evaluate funds spent on grounds maintenance:Total spending does not measure efficiency or productivity; it merely reflects the amount allocated.
* C. Analyze staffing levels:Staffing levels do not directly measure performance; they are only one factor in determining efficiency.
References and Documents:
* Governmental Performance Reporting (AGA):Recommends using comparative benchmarks for evaluating efficiency in service delivery.
* Performance Management Framework by GAO:Highlights cost-effectiveness metrics such as cost per acre maintained.
NEW QUESTION # 71
_ and the Keynesian fiscal policy
The supply side fiscal policy reduces
increases .
- A. Taxes, Federal spending
- B. None of these
- C. Economic growth, Taxes
- D. Economic growth, Employment rate
Answer: A
NEW QUESTION # 72
The principal advantage of a CIP (Capital improvement Program) is
that , including their project designs, land acquisition, permitting, and acquiring financing.
- A. ensures the orderly replacement of capital facilities
- B. None of these
- C. It provides for sufficient lead time to plan for projects.
- D. Minimal costs of putting the asset in operating conditions
Answer: C
NEW QUESTION # 73
Banks offer following short-term, loans, EXCEPT:
- A. None of these
- B. A line of credit against which a specified dollar amount may be drawn with interest paid, usually monthly
- C. Tax anticipation notes (TANs) or revenue anticipation of taxes or other revenue that will be received
- D. Bond anticipation notes (BANs) in anticipation of future long-term financing
Answer: A
NEW QUESTION # 74
If a state treasurer wants to evaluate a variety of alternative long-term investments, which financial analysis should be used?
- A. regression analysis
- B. ratio analysis
- C. net present value analysis
- D. horizontal analysis
Answer: C
Explanation:
What Is Net Present Value (NPV)?
* NPV analysisevaluates the profitability of long-term investments by calculating the present value of expected cash inflows and outflows over time, discounted at a specified rate (e.g., the opportunity cost of capital).
* It helps decision-makers compare investment options by quantifying their value in today's dollars.
Why NPV Is Appropriate for Long-Term Investments:
* It considers thetime value of money(a dollar today is worth more than a dollar in the future).
* NPV helps the treasurer evaluate and prioritize investments based on their overall profitability and financial impact over the long term.
Why Other Options Are Incorrect:
* B. Regression Analysis:This statistical method analyzes relationships between variables but is not commonly used for evaluating long-term investments.
* C. Horizontal Analysis:Focuses on financial data changes over time (e.g., year-to-year comparisons), not investment decisions.
* D. Ratio Analysis:Measures financial performance but does not evaluate the profitability of long-term investment alternatives.
References and Documents:
* GAO Guide on Investment Decision-Making:Recommends using NPV for evaluating long-term projects and investments.
* OMB Circular A-94:Provides guidelines for using NPV in benefit-cost analysis of federal investments.
NEW QUESTION # 75
As electronic commerce is the ripe of FRAUD, governments should secure bank security services that reduce the possibility of fraud, including all of these EXCEPT:
- A. None of these
- B. ACH block
- C. Reverse Positive pay
- D. Positive pay
Answer: A
NEW QUESTION # 76
which give local governments the money to
Commercial banks issue
refinance or refund debt at a lower interest rate.
- A. SO Bonds
- B. GO Bonds
- C. State Bonds
- D. (LOCs) Letters of credit
Answer: D
NEW QUESTION # 77
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