CGA Financial Management & Reporting 2 — Questions and Answers
Question 1: Under 2 CFR Part 200, what is the threshold for a non-federal entity to require a Single Audit?
- $500,000 in federal expenditures
- $750,000 in federal expenditures (Correct answer)
- $1,000,000 in federal expenditures
- $250,000 in federal expenditures
Correct answer: $750,000 in federal expenditures
2 CFR §200.501 requires a Single Audit when a non-federal entity expends $750,000 or more in federal awards during a fiscal year.
Question 2: Which financial statement shows the financial position of a grant recipient at a specific point in time?
- Statement of Activities
- Statement of Cash Flows
- Balance Sheet (Statement of Net Position) (Correct answer)
- Statement of Functional Expenses
Correct answer: Balance Sheet (Statement of Net Position)
The Balance Sheet or Statement of Net Position presents assets, liabilities, and net assets/equity as of a specific date.
Question 3: A grantee uses grant funds to purchase equipment and later sells it. Under 2 CFR Part 200, the proceeds from the sale must be:
- Returned entirely to the federal awarding agency
- Used to offset the cost of replacement equipment or returned to the federal program (Correct answer)
- Deposited into the grantee's general operating fund
- Reported to the awarding agency but retained by the grantee
Correct answer: Used to offset the cost of replacement equipment or returned to the federal program
Per 2 CFR §200.313, proceeds from equipment sales must either be used to offset replacement equipment costs or returned to the federal program.
Question 4: What is a 'program income' in the context of federal grant management?
- Funds earned by the grantee from non-grant sources
- Gross income earned by a non-federal entity that is directly generated by a supported activity (Correct answer)
- Indirect cost recovery from the awarding agency
- Interest earned on grant funds held in a bank account
Correct answer: Gross income earned by a non-federal entity that is directly generated by a supported activity
2 CFR §200.1 defines program income as gross income earned by a non-federal entity that is directly generated by a supported activity or earned as a result of the federal award.
Question 5: The 'additive' method for program income means the grantee must:
- Subtract program income from total project costs before drawing down federal funds
- Add program income to the total budget, increasing the scope of work (Correct answer)
- Return all program income to the federal awarding agency
- Use program income only for indirect costs
Correct answer: Add program income to the total budget, increasing the scope of work
Under the additive method, program income is added to the award funds, effectively expanding the scope or total budget of the project.
Question 6: Which of the following costs would typically be considered an unallowable entertainment expense under 2 CFR Part 200?
- Meals during a grant-required training session
- Coffee and refreshments at a stakeholder meeting
- Dinner for staff attending an awards ceremony not tied to grant activities (Correct answer)
- Refreshments at a community outreach event directly tied to grant objectives
Correct answer: Dinner for staff attending an awards ceremony not tied to grant activities
2 CFR §200.438 prohibits entertainment costs unless they have a programmatic purpose directly tied to the federal award.
Question 7: What does 'carryover' refer to in federal grant financial management?
- Transferring unspent funds from one budget line to another within the same period
- Unexpended federal award funds that are authorized to be used in the next budget period (Correct answer)
- The process of recovering costs from prior periods
- Excess indirect cost recovery transferred to future years
Correct answer: Unexpended federal award funds that are authorized to be used in the next budget period
Carryover refers to unobligated federal award funds remaining at the end of a budget period that, with approval, may be used in the subsequent budget period.
CGA Financial Management & Reporting 2
Under 2 CFR Part 200, what is the threshold for a non-federal entity to require a Single Audit?