CGFM LATEST 2026 TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
✔✔Financial Management System - ✔✔Organized means for the collection, processing,
transmission and dissemination of financial information. Includes policies and
procedures and trained personnel, as well as any applicable computer hardware and
software.
✔✔Financial Statement Audit - ✔✔Examination of financial statements, accomplished
by an independent auditor. Results in an opinion on whether the financial statements
are presented fairly in accordance with GAAP or other comprehensive basis of
accounting
✔✔Financai Report - ✔✔External report that depicts financial position and financial
results of an entity
✔✔Formula Grant - ✔✔A type of intergovernmental grant that includes both categorical
grants and block grants, in which the amount of the grant is based on a formula,
contained in law or regulation that determines the total amount each recipient will
receive, if basic eligibility requirements are satisfied
✔✔Forensic audting - ✔✔"Forensic" implies that the results will be admissible as legal
evidence. Combines the skills of auditors and accountants with investigative techniques,
useful for both the detecting and prevention of fraud
✔✔General Assembly - ✔✔Name often applied to the legislative branch at the state
level
✔✔General obligation bonds - ✔✔Form of government debt that is back by the full faith
and credit of the government. Contracts with revenue bonds
✔✔General-purpose government - ✔✔Entity at the national, state or local level that
provides a broad range of services
✔✔Generally Accepted Government Auditing Standards (GAGAS) - ✔✔Issued by the
GAO, to define the expected levels of performance for the conduct of an audit or
attestation of a government organization, program, activity, or function (also called
government auditing standards or Yellow Book)
✔✔Governmental Accounting Standards Board (GASB) - ✔✔Defined GAAP for state
and local government entities
✔✔Government Corporation - ✔✔Quasi-government entity formed to support
businesslike functions where most, if not all, operating expenses are expected to be
covered through revenues and feeds, rather than from appropriated budget authority
, ✔✔Government Performance and Results Act (GPRA) - ✔✔U.S. law passed in 1993;
required federal agencies to create long-term strategic plans. The strategic plans are
followed by annual performance plans (currently performance budgets), and annual
performance reports. (The law has been updated with the Government Performance
and Results Act Modernization Act, enacted in 2010)
✔✔Grant - ✔✔Funds transferred from one level of government to another for specific or
broad purposes
✔✔Impartial - ✔✔Lack of favoritism. The absence of favor or prejudice. Treating or
affecting all equally
✔✔Income Tax - ✔✔Tax based on income and levied on individuals or corporations.
Used most often at national and state levels, though some states allow local
governments to impose income taxes
✔✔Independence - ✔✔Free of relationship that may impair, or appear ti impair, one's
ability to act with objectivity. It is the quality of being free of an obligation to particular
parties or interest
✔✔Inheritance tax - ✔✔Form of wealth tax. Levied on the person receiving a bequest
✔✔Initiative - ✔✔Process that enables citizens to present their view of a problem and a
proposed solution, rather than depending on a solution devised and enacted by the
legislative branch. Allows direct citizen action to affect laws
✔✔Intangibles tax - ✔✔Form of wealth tax. Applied to intangible assets such as stocks
and bonds, savings accounts, trademarks, and accounts receivable
✔✔Internal Control - ✔✔Organization and activities design to ensure programs achieve
their intended results; resources are used efficiently and effectively; programs and
resources are protected from waste, fraud, and mismanagement; laws and regulations
are followed; and reliable and timely information is obtained, maintained, and reported
✔✔Judicial Review - ✔✔Principle by which the judicial branch may review actions by
the legislative branch and if appropriate, declare them unconstitutional or illegal. Flows
from the separation of powers
✔✔Lease-purchase - ✔✔Practice by which a government entity assumes a long-term
lease on a capital asset and, at the end of the lease period, the asset may transfer to
the government. Usually, these do not require voter approval.
✔✔License fee - ✔✔Fee paid to the government for a specific privilege, often related to
an activity. Ranges from recreation to business
SOLUTIONS GRADED A+
✔✔Financial Management System - ✔✔Organized means for the collection, processing,
transmission and dissemination of financial information. Includes policies and
procedures and trained personnel, as well as any applicable computer hardware and
software.
✔✔Financial Statement Audit - ✔✔Examination of financial statements, accomplished
by an independent auditor. Results in an opinion on whether the financial statements
are presented fairly in accordance with GAAP or other comprehensive basis of
accounting
✔✔Financai Report - ✔✔External report that depicts financial position and financial
results of an entity
✔✔Formula Grant - ✔✔A type of intergovernmental grant that includes both categorical
grants and block grants, in which the amount of the grant is based on a formula,
contained in law or regulation that determines the total amount each recipient will
receive, if basic eligibility requirements are satisfied
✔✔Forensic audting - ✔✔"Forensic" implies that the results will be admissible as legal
evidence. Combines the skills of auditors and accountants with investigative techniques,
useful for both the detecting and prevention of fraud
✔✔General Assembly - ✔✔Name often applied to the legislative branch at the state
level
✔✔General obligation bonds - ✔✔Form of government debt that is back by the full faith
and credit of the government. Contracts with revenue bonds
✔✔General-purpose government - ✔✔Entity at the national, state or local level that
provides a broad range of services
✔✔Generally Accepted Government Auditing Standards (GAGAS) - ✔✔Issued by the
GAO, to define the expected levels of performance for the conduct of an audit or
attestation of a government organization, program, activity, or function (also called
government auditing standards or Yellow Book)
✔✔Governmental Accounting Standards Board (GASB) - ✔✔Defined GAAP for state
and local government entities
✔✔Government Corporation - ✔✔Quasi-government entity formed to support
businesslike functions where most, if not all, operating expenses are expected to be
covered through revenues and feeds, rather than from appropriated budget authority
, ✔✔Government Performance and Results Act (GPRA) - ✔✔U.S. law passed in 1993;
required federal agencies to create long-term strategic plans. The strategic plans are
followed by annual performance plans (currently performance budgets), and annual
performance reports. (The law has been updated with the Government Performance
and Results Act Modernization Act, enacted in 2010)
✔✔Grant - ✔✔Funds transferred from one level of government to another for specific or
broad purposes
✔✔Impartial - ✔✔Lack of favoritism. The absence of favor or prejudice. Treating or
affecting all equally
✔✔Income Tax - ✔✔Tax based on income and levied on individuals or corporations.
Used most often at national and state levels, though some states allow local
governments to impose income taxes
✔✔Independence - ✔✔Free of relationship that may impair, or appear ti impair, one's
ability to act with objectivity. It is the quality of being free of an obligation to particular
parties or interest
✔✔Inheritance tax - ✔✔Form of wealth tax. Levied on the person receiving a bequest
✔✔Initiative - ✔✔Process that enables citizens to present their view of a problem and a
proposed solution, rather than depending on a solution devised and enacted by the
legislative branch. Allows direct citizen action to affect laws
✔✔Intangibles tax - ✔✔Form of wealth tax. Applied to intangible assets such as stocks
and bonds, savings accounts, trademarks, and accounts receivable
✔✔Internal Control - ✔✔Organization and activities design to ensure programs achieve
their intended results; resources are used efficiently and effectively; programs and
resources are protected from waste, fraud, and mismanagement; laws and regulations
are followed; and reliable and timely information is obtained, maintained, and reported
✔✔Judicial Review - ✔✔Principle by which the judicial branch may review actions by
the legislative branch and if appropriate, declare them unconstitutional or illegal. Flows
from the separation of powers
✔✔Lease-purchase - ✔✔Practice by which a government entity assumes a long-term
lease on a capital asset and, at the end of the lease period, the asset may transfer to
the government. Usually, these do not require voter approval.
✔✔License fee - ✔✔Fee paid to the government for a specific privilege, often related to
an activity. Ranges from recreation to business
