1|Page
CERTIFIED GRANTS MANAGEMENT SPECIALIST
(CGMS) EXAM AND PRACTICE EXAM NEWEST 2026
TEST BANK| CGMS EXAM PREP WITH COMPLETE
REAL EXAM QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) ALREADY GRADED
A+ (MOST RECENT!!)
A pass-through entity issues a subaward to a community partner. Which
requirement must be included in the subaward agreement?
A. Vendor payment schedule only
B. Federal award identification information
C. Payroll tax records for all employees
D. State procurement forms unrelated to the grant - Correct Answer - B
Uniform Guidance requires pass-through entities to include specific
federal award identification information in all subawards.
A grant manager notices that a contractor was selected without
competition even though multiple qualified vendors were available.
Which procurement standard was MOST likely violated?
A. Cost sharing requirement
B. Period of performance rule
C. Full and open competition
D. Program income restriction - Correct Answer - C
Federal procurement standards require full and open competition unless
a documented exception applies.
pg. 1
,2|Page
A federal agency requests supporting documentation for charges posted
six months earlier. Which document would BEST support payroll
charges allocated to the award?
A. Marketing brochures
B. Personnel activity documentation
C. Insurance certificates
D. Building lease abstracts - Correct Answer - B
Payroll costs charged to federal awards must be supported by
appropriate records reflecting actual work performed.
A recipient purchases equipment costing $18,000 using federal grant
funds. Two years later, the equipment is no longer needed for the
original project. What should the organization review FIRST?
A. Property disposition requirements
B. Employee reimbursement policies
C. Travel authorization procedures
D. Matching contribution limits - Correct Answer - A
Equipment acquired with federal funds is subject to disposition
requirements under Uniform Guidance.
An auditor identifies repeated late financial reports submitted by a
grantee. Which internal control improvement would MOST directly
address this issue?
A. Increasing indirect cost rates
B. Centralized reporting calendar with assigned accountability
C. Eliminating procurement reviews
D. Outsourcing all program operations - Correct Answer - B
pg. 2
,3|Page
A structured reporting process with accountability reduces reporting
delays and strengthens compliance.
An organization receives advance federal payments but consistently
holds excess cash for extended periods. Which federal principle is
MOST likely violated?
A. Cash management requirements
B. Conflict-of-interest disclosure rules
C. Property insurance standards
D. Intellectual property rights - Correct Answer - A
Federal cash management standards require minimizing the time
between drawdown and disbursement.
An organization charges the entire annual software license cost to a
federal award covering only six months of use. Which cost principle was
MOST likely violated?
A. Allocability
B. Program income
C. Mandatory disclosure
D. Procurement threshold - Correct Answer - A
Costs must benefit the award proportionate to the amount charged.
A subrecipient fails to submit required performance reports despite
repeated reminders. What action should the pass-through entity consider
FIRST?
A. Automatic litigation
B. Enforcement actions outlined in the subaward
pg. 3
, 4|Page
C. Immediate property seizure
D. Eliminating internal controls - Correct Answer - B
Pass-through entities should use documented enforcement remedies
consistent with award conditions.
A grant manager discovers duplicate payments made to a vendor under a
federal award. Which control would BEST prevent recurrence?
A. Dual review of accounts payable transactions
B. Increased entertainment expenses
C. Reduced documentation requirements
D. Informal verbal approvals only - Correct Answer - A
Segregation and review controls reduce duplicate payment risk.
An employee responsible for approving purchases also reconciles bank
statements and processes payments. Which risk is MOST significant?
A. Excessive procurement competition
B. Lack of segregation of duties
C. Overstated indirect cost rates
D. Delayed equipment disposition - Correct Answer - B
Combining incompatible financial duties increases fraud and error risk.
A recipient purchases supplies near the end of the grant period without
evidence they were needed for project completion. What concern is
MOST likely?
A. Supplanting
B. Budget revision flexibility
pg. 4
CERTIFIED GRANTS MANAGEMENT SPECIALIST
(CGMS) EXAM AND PRACTICE EXAM NEWEST 2026
TEST BANK| CGMS EXAM PREP WITH COMPLETE
REAL EXAM QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) ALREADY GRADED
A+ (MOST RECENT!!)
A pass-through entity issues a subaward to a community partner. Which
requirement must be included in the subaward agreement?
A. Vendor payment schedule only
B. Federal award identification information
C. Payroll tax records for all employees
D. State procurement forms unrelated to the grant - Correct Answer - B
Uniform Guidance requires pass-through entities to include specific
federal award identification information in all subawards.
A grant manager notices that a contractor was selected without
competition even though multiple qualified vendors were available.
Which procurement standard was MOST likely violated?
A. Cost sharing requirement
B. Period of performance rule
C. Full and open competition
D. Program income restriction - Correct Answer - C
Federal procurement standards require full and open competition unless
a documented exception applies.
pg. 1
,2|Page
A federal agency requests supporting documentation for charges posted
six months earlier. Which document would BEST support payroll
charges allocated to the award?
A. Marketing brochures
B. Personnel activity documentation
C. Insurance certificates
D. Building lease abstracts - Correct Answer - B
Payroll costs charged to federal awards must be supported by
appropriate records reflecting actual work performed.
A recipient purchases equipment costing $18,000 using federal grant
funds. Two years later, the equipment is no longer needed for the
original project. What should the organization review FIRST?
A. Property disposition requirements
B. Employee reimbursement policies
C. Travel authorization procedures
D. Matching contribution limits - Correct Answer - A
Equipment acquired with federal funds is subject to disposition
requirements under Uniform Guidance.
An auditor identifies repeated late financial reports submitted by a
grantee. Which internal control improvement would MOST directly
address this issue?
A. Increasing indirect cost rates
B. Centralized reporting calendar with assigned accountability
C. Eliminating procurement reviews
D. Outsourcing all program operations - Correct Answer - B
pg. 2
,3|Page
A structured reporting process with accountability reduces reporting
delays and strengthens compliance.
An organization receives advance federal payments but consistently
holds excess cash for extended periods. Which federal principle is
MOST likely violated?
A. Cash management requirements
B. Conflict-of-interest disclosure rules
C. Property insurance standards
D. Intellectual property rights - Correct Answer - A
Federal cash management standards require minimizing the time
between drawdown and disbursement.
An organization charges the entire annual software license cost to a
federal award covering only six months of use. Which cost principle was
MOST likely violated?
A. Allocability
B. Program income
C. Mandatory disclosure
D. Procurement threshold - Correct Answer - A
Costs must benefit the award proportionate to the amount charged.
A subrecipient fails to submit required performance reports despite
repeated reminders. What action should the pass-through entity consider
FIRST?
A. Automatic litigation
B. Enforcement actions outlined in the subaward
pg. 3
, 4|Page
C. Immediate property seizure
D. Eliminating internal controls - Correct Answer - B
Pass-through entities should use documented enforcement remedies
consistent with award conditions.
A grant manager discovers duplicate payments made to a vendor under a
federal award. Which control would BEST prevent recurrence?
A. Dual review of accounts payable transactions
B. Increased entertainment expenses
C. Reduced documentation requirements
D. Informal verbal approvals only - Correct Answer - A
Segregation and review controls reduce duplicate payment risk.
An employee responsible for approving purchases also reconciles bank
statements and processes payments. Which risk is MOST significant?
A. Excessive procurement competition
B. Lack of segregation of duties
C. Overstated indirect cost rates
D. Delayed equipment disposition - Correct Answer - B
Combining incompatible financial duties increases fraud and error risk.
A recipient purchases supplies near the end of the grant period without
evidence they were needed for project completion. What concern is
MOST likely?
A. Supplanting
B. Budget revision flexibility
pg. 4
