CGFM EXAM 3 2023 NEW PRACTICE SOLUTION GRDED A CORRECT ANSWERS
2 views 0 purchase
Course
CGFM
Institution
CGFM
CGFM EXAM 3 2023 NEW PRACTICE SOLUTION GRDED A CORRECT ANSWERS.Three Broad Government Spending Purposes - 1) Current Operations
2) Capital Outlays
3) Debt Service
Present Value Analysis - Three Components - Determines what $$ Rec'd in Future is
Worth Today
1) inflation component - year over ye...
CGFM EXAM 3 2023 NEW PRACTICE SOLUTION GRDED A CORRECT ANSWERS
Three Broad Government Spending Purposes - 1) Current Operations
2) Capital Outlays
3) Debt Service
Present Value Analysis - Three Components - Determines what $$ Rec'd in Future is
Worth Today
1) inflation component - year over year loss in value
2) enterprise component - inherent risk
3) unique component -
Budget Accounting and Procedures Act of 1950 - Requires the head of each
federal agency to establish and maintain I/C's.
Federal Managers Financial Integrity Act of 1982 (FMFIA) - requires the head of each
agency to evaluate controls on an annual basis, reporting any weakness along with a
corrective action plan
** (resulted in the "green book") **
Single Audit Act of 1984 (amended in 1996) - requires the audit of state and local
governments and npo's receiving federal funding
Sarbanes Oxley Act of 2002 - Placed restrictions on publicly traded companies following
Enron scandal. Requires mgmt to report on I/C's for financial reporting in its annual
report.
(ICOFR) - Internal Controls Over Financial Reporting
Chief Financial Officers Act of 1990 (CFO Act): - required 10 federal agencies to
produce audited annual financial reports that included a report on internal control.
expanded in 1994 by GMRA
INTERNAL CONTROLS - systems and techniques managers use to provide reasonable
assurance that agency objectives met in an effective/efficient manner, in compliance
with laws/regulations, and to safeguard assets.
Implemented to accomplish certain results, prevent problems, or detect problems that
have occurred.
Some controls can both detect and prevent problems (but only if their existence is
known).
TIME VALUE OF MONEY - Used in consideration of capital budgeting
,1) Present Value Analysis
2) Future Value Analysis
3) Payback Analysis
Flowcharting - Iterative process requiring changes throughout development, each step
represents a decision, also used to evaluate processes for effective internal controls
Earned Value Management (EVM) - project mgmt system that weighs both schedule
and cost performance to determine if a project is delivering expected results on time
and within budget
Regression Analysis - Predicts the relationship between variables:
1) Direct Linear Regression
2) Indirect Linerar Regression
3) Non-linear Regression
4) No Relationship
** See Limits of Regression Analysis
Correlation Coefficient - Determines the degree of accuracy the analysis (variables) can
be used to predict results (1=perfect correlation
.85 considered reliable for forecasting)
Multiple Regressions - analyzes multiple IV's and look for items with the highest
correlation coefficient as being the most like predictors
Limits of Regression Analysis - Data ranges must be relevant (e.g., sample size might
be too small to project on a larger population)
Difficult to find data sets with high correlation coefficients
Bad data = bad results (garbage in, garbage out)
Correlation is not Causation, have to be able to explain how one set of data
would influence another
Data Analytics - inspecting, cleaning, transforming, and modeling data to find useful
information, conclusions, and support decision making
Data Mining - (Predictive) sorting through large data sets and using filters
and algorithms to pick out relationships
** See strengths and weaknesses
Predictive Analytics - data collected through a variety of techniques to analyze current
and historical facts to make predictions about future events
,Data Mining Strengths and Weaknesses - *
Strengths Analyst is able to review complete data
sets Ability to link together multiple data sources
* Weaknesses
Must have quality data
Must have ability to understand program requirements and how this is represented
in the data
Starting a Data Analytic Program - Collaborate with other agencies for data collection
and sharing
Determine ROI in Analytics Programs
Give leaders clear concise analysis they can use to support data driven programs
Enable employees at all levels to see and utilize data for their needs (not just the
needs of senior leaders
Managers to demand the use of data and provide employees with targeted on the job
training
Forensic Auditing - examination of financial information that is likely to be used for the
investigation and prosecution of financial crimes
Need to have knowledge of basic legal principles, standards for discovery
Steps for Forensic Auditing - a) data collection,
b) data preparation,
c) data analysis,
and d) reporting
Benford Digital Analysis - based on observation that more transactions begin with the
number one than larger numbers. More transactions will start with number one than
number two ... and more with number two, than number three, etc...
Because there is an expected distribution of numbers, the testing an point out
potentially fraudulent transactions
Competitive Source Analysis - Used to determine if there is a benefit to
contracting government services to the private sector:
1) Conduct a management study
2) Prepare a performance work statement - defines the expected outputs/results
3) Project the in-house and contract costs
4) Select the best alternative - combination of performance and price
Ratio Analysis - Active use of numbers to point out problems and indicate performance,
questions to ask, etc. They serve as starting points for further inquiry.
, Ex. numbers revealing that receivables are increasing could trigger an increase in debt
collection efforts. Other rations could indicate fiscal stress, adequacy of reserves,
liquidity, workloads, response times, and accuracy rates.
Pure Ratios - relating one number to another to create a meaningful indicator of
performance (ex., total expenditures to budget).
Comparative Analysis - Comparing entities numbers and ratios to another agency
or benchmarks. Credit rating agencies also publish median ratios by industry and
what they consider to be reasonable ranges and ratios
Time Series Analysis - comparing the agency against itself over time, ex. Calculating
the percentage change from year to year
Common Size Statements - converts all data elements in a statement to percentages
of 100, Examines expenditures of a function as compared to total expenditures (ex.,
percentage of total budget spent on public safety year over year, and if it is growing
disproportionately to other programs)
Per Capita Information - Debt per capita
Cautionary Note on Ratio Analysis - Not an ends unto themselves but serve as a
starting point for further investigation.
Liquidity Ratios - Determines entities ability to meet creditors demands:
1) Current Ratio
2) Quick Ration
Current Ratio = current assets/current liabilities - current assets = cash and those
assets that will become cash within one year (including inventories)
Current liabilities = those that are due and payable within one year
Should be a ratio of 2:1
Quick Ratio = Cash and equivalents, and receivables/current liabilities - Removes the
uncertainty over inventories
Ideal ration should be 1:1
Asset efficiency and Turn-Over ratios - Efficiency in using assets and converting them
to cash.
1) Receivables Ratios
2) Inventory Ratios
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller StudyConnect. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
