AGA CGFM Certified Government Financial Manager CGFM Exam Dumps: Updated Questions & Answers (September 2025)

Overview of the Prompt Payment Act (PPA):

ThePrompt Payment Act (31 U.S.C. Chapter 39)requires federal agencies to pay vendors for goods and services in a timely manner.

If payment is not made within the required time frame (usually 30 days after receiving a proper invoice), the agency must payinterest penaltiesto the vendor for the late payment.

Explanation of Answer Choices:

A. Invoices immediately when received: Incorrect. Federal agencies are not required to pay invoices immediately; they must process payments within the specified timeframe.

B. Interest when an invoice is paid late: Correct. Agencies must pay interest penalties for late payments.

C. Invoices no later than 60 days after receipt of the invoice: Incorrect. The standard timeframe is 30 days unless otherwise specified in the contract.

D. Interest on intragovernmental invoices: Incorrect. The PPA does not apply to intragovernmental transactions.

References:

Prompt Payment Act,31 U.S.C. Chapter 39.

U.S. Department of the Treasury,Prompt Payment Act Guidelines.

Analyzing Participation and Enrollment Trends:

Dashboards are tools that provide real-time visualizations of data, making them ideal for quickly analyzing trends such as program participation versus enrollment.

They allow program managers to view up-to-date metrics and identify variances without manual data processing.

Explanation of Answer Choices:

A. Crosstab: While useful for comparing categorical data, crosstabs are static and less effective for real-time analysis.

B. Portable document format (PDF): A PDF is a static file format, unsuitable for dynamic data analysis.

C. Text file: Text files provide raw data but require additional processing, making them inefficient for quick analysis.

D. Dashboard: Correct. Dashboards provide dynamic, real-time analytics, perfect for monitoring daily changes in participation and enrollment.

References:

Association of Government Accountants (AGA),Data Visualization in Public Sector Management.

Government Performance Lab,Using Dashboards for Real-Time Program Management.

What Is a Risk Profile?Arisk profileis the formal listing and assessment of an agency's top risks. It identifies the risks that could significantly impact an organization’s ability to achieve its objectives and prioritizes them based on factors like likelihood and impact.

Why Is the Risk Profile Important?

The risk profile helps management focus on the most critical risks and allocate resources to address them effectively. It is a core element of enterprise risk management frameworks (e.g., COSO ERM).

In the federal government,OMB Circular A-123requires agencies to maintain a risk profile as part of their internal control and risk management processes.

Why Other Options Are Incorrect:

B. Risk Management Plan:This is broader and includes strategies for mitigating and monitoring risks, not just listing and assessing them.

C. Risk Assessment:This is a process used to identify and evaluate risks but does not specifically refer to the formal listing of risks.

D. Risk Register:While similar to a risk profile, a risk register typically includes more granular details, such as specific control measures, responsibilities, and timelines.

References and Documents:

OMB Circular A-123:Requires federal agencies to develop a risk profile as part of their risk management framework.

COSO ERM Framework (2017):Describes the risk profile as a tool for managing enterprise-wide risks.

What Are Simplified Acquisition Processes?Simplified acquisition processes are procurement methods designed to streamline purchasing for government agencies. These processes reduce the administrative burden for smaller purchases, typically below a certain dollar threshold (as defined in theFederal Acquisition Regulation (FAR)).

How Do These Processes Assist Agencies?

Bulk Purchase Discounts:Simplified acquisition allows agencies to leverage economies of scale and negotiate bulk purchase discounts for commonly used goods and services.

Reduced Administrative Costs:By simplifying documentation, reducing oversight requirements, and accelerating the approval process, these methods lower administrative costs and increase efficiency.

Why Other Options Are Incorrect:

A. Maintaining the competitive bid requirement and allowing credit card purchases:While simplified acquisitions may allow credit card purchases, the focus is not maintaining competitive bids but reducing costs and streamlining the process.

C. Increasing the number of requisitions processed:The goal is efficiency, not increasing the volume of requisitions.

D. Reducing acquisition staff and managerial oversight:These processes may simplify oversight but do not aim to reduce staff; instead, they help existing staff work more efficiently.

References and Documents:

Federal Acquisition Regulation (FAR) Part 13:Covers simplified acquisition processes and their intended benefits.

GAO Reports on Federal Procurement (2020):Highlights the cost savings and efficiencies gained through simplified acquisition methods.

Why Hire Contractors for Management Control Evaluations?Management may decide to bring in external contractors when there are gaps in the organization’s capacity to perform evaluations internally. One key factor is thelack of management expertise—if management lacks the necessary knowledge or experience to evaluate controls effectively, it may outsource this task to qualified contractors.

Why Other Options Are Incorrect:

B. Availability of Qualified Contractors:While availability is a factor, it’s not a variable that influences the decision to outsource. Instead, it’s a logistical consideration once the decision has been made.

C. Suspicion of Internal Fraud:Suspicion of fraud may lead to investigations, but hiring contractors to evaluate controls is driven by expertise gaps rather than fraud concerns.

D. Knowledge of Systemic Deficiencies:If management already has knowledge of systemic deficiencies, they may focus on remediation rather than outsourcing evaluations.

References and Documents:

GAO Standards for Internal Control in the Federal Government (Green Book):Emphasizes the need for knowledgeable personnel to evaluate controls.

GAGAS (Yellow Book):Highlights the role of external expertise in cases where internal expertise is insufficient.

Cash Control Fundamentals:

The primary goal of cash controls is to safeguard assets and prevent fraud, errors, or misappropriation.

Frequent bank reconciliations ensure that recorded cash balances match actual bank balances, detecting discrepancies quickly.

Explanation of Answer Choices:

A. Segregation of duties: While critical for cash management, it is not the most fundamental cash control.

B. Use of automated systems: Helpful for efficiency but not a fundamental control.

C. Analysis of cash reports: Important, but reconciling bank accounts is more critical for detecting errors or fraud.

D. Frequent reconciliation of bank accounts: Correct. This is the most fundamental and widely recognized control for safeguarding cash.

References:

Association of Government Accountants (AGA),Cash Management Best Practices.

Government Finance Officers Association (GFOA),Bank Reconciliation Best Practices.

Federal Credit Reform Act of 1990:This Act established a new accounting framework for federal credit programs, such as direct loans and loan guarantees. It requires using thenet present value (NPV)method to measure the costs of loans and guarantees by discounting future cash flows (e.g., loan repayments, defaults) to their present value.

Explanation of Financial Analytical Technique:

Net Present Value (NPV): Accounts for the time value of money by discounting future cash flows to the present. It provides an accurate measure of the economic cost to the government.

Other options:

A. Future value: Focuses on future cash flows, not their present cost.

C. Current value: Not a recognized technique for analyzing long-term cash flows.

D. Regression analysis: A statistical method, unrelated to calculating loan program costs.

References:

Federal Credit Reform Act of 1990, Section 502.

Congressional Budget Office (CBO),Federal Credit Program Cost Analysis.

Office of Management and Budget (OMB),Circular A-11: Credit Reform Accounting.

What Do Generally Accepted Auditing Standards (GAAS) Require for Financial Audits?GAAS outlines specific requirements for auditors conducting financial audits, including:

Adequately Planning the Work (Option A):Proper planning ensures that audits are efficient and thorough.

Obtaining Sufficient, Appropriate Audit Evidence (Option C):This is critical to support the auditor’s opinion on the financial statements.

Supervising Assistants (Option D):Supervising any audit staff ensures that work is performed in accordance with standards.

What Does GAAS Not Require?

GAAS does not specifically require auditors to make the audit report available to the public (Option B). While making reports available to the public may be required by other laws, regulations, or organizational policies, it is not a standard requirement under GAAS. The decision to make the report public often lies with the audited entity or governing bodies.

References and Documents:

AICPA Statements on Auditing Standards (SAS):The foundational standards that define GAAS requirements.

GAGAS (Yellow Book):While GAGAS may have additional reporting requirements, it does not mandate public access to the audit report unless stipulated by law.

What Does GPRA Require?TheGovernment Performance and Results Act (GPRA)mandates that federal agencies prepare:

Astrategic planoutlining long-term goals.

Anannual performance plandetailing the objectives and performance measures for the upcoming year.

Anannual performance reportevaluating the agency’s success in meeting the goals outlined in the annual performance plan.

Why Is the Annual Performance Report Important?

The annual performance report provides accountability and transparency by comparing actual results to planned goals. It allows Congress and the public to assess how effectively the agency is achieving its mission.

Why Other Options Are Incorrect:

A. A five-year performance plan:GPRA requires a strategic plan (updated every four years), not a separate five-year performance plan.

C. SEA Report:This refers to Service Efforts and Accomplishments reporting, which is not mandated by GPRA.

D. The prior year’s audited financial report:While financial reports are important, they are separate from the performance reporting requirements of GPRA.

References and Documents:

Government Performance and Results Act (1993):Requires agencies to submit strategic plans, annual performance plans, and annual performance reports.

GAO Reports on GPRA Compliance:Emphasizes the role of annual performance reports in promoting accountability.

Why Does Management Need Real-Time Data Access?

Real-time access to data enables managers to make timely and informed decisions.

Complex data setspresented clearly and concisely (with minimal distractions) allow decision-makers to focus on the critical insights necessary for strategic and operational planning.

Why Is Option D Correct?

On-demand access ensures managers can retrieve updated data whenever needed. Presenting the data in a focused and distraction-free format facilitates quick comprehension and decision-making.

Why Other Options Are Incorrect:

A. Visual representation with indirect information:Including unrelated data can overwhelm users and detract from effective decision-making.

B. Dashboards updated quarterly:Quarterly updates do not meet the need for real-time access.

C. Prior year’s financial data:Decisions based solely on historical data are not responsive to real-time needs.

References and Documents:

GAO Data Analytics and Visualization Framework:Stresses the importance of real-time, actionable, and distraction-free data for decision-making.

AICPA Dashboard Guidelines:Recommends presenting complex data sets in a clear and accessible format for management use.