Practice Test Geeks(CBA) Certified Budget Analyst Practice Test
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Risk Management & Mitigation Flashcards

7 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Risk Management & Mitigation flashcards as text

  1. A budget analyst is reviewing a public-private partnership (P3) agreement. Which risk is MOST commonly transferred to the private partner in such arrangements?

    Answer: Construction cost overrun and schedule risk

    P3 agreements typically transfer construction, operational, and performance risks to the private sector partner in exchange for long-term service fees or user revenues.

  2. What does 'risk velocity' refer to in budget risk management?

    Answer: The speed at which a risk, once triggered, will impact the organization

    Risk velocity (or speed of onset) describes how quickly a risk materializes into actual harm, which affects how much lead time decision-makers have to respond.

  3. An agency's Inspector General (IG) identifies a 'material weakness' in budget controls. Under FMFIA, what action is REQUIRED?

    Answer: The agency head must report the weakness and corrective action plan in the annual assurance statement

    FMFIA requires agency heads to disclose material weaknesses and their corrective action plans in the annual Federal Managers' Financial Integrity Act assurance statement.

  4. Which approach BEST addresses the budget risk posed by 'scope creep' in a multi-year government IT modernization project?

    Answer: Implementing a formal change control process that requires budget impact analysis before approving scope changes

    A formal change control process ensures every scope addition triggers a budget impact analysis, preventing uncontrolled cost growth from incremental scope additions.

  5. In government budget risk management, an 'upside risk' (positive risk or opportunity) should be handled by:

    Answer: Exploiting, sharing, or enhancing it to maximize potential benefit to the organization

    Modern risk management frameworks recognize positive risks (opportunities) and prescribe responses such as exploiting, enhancing, or sharing them to maximize mission value.

  6. A county budget office implements quarterly budget-to-actual variance reviews with a mandatory explanation requirement for variances exceeding 10%. This is PRIMARILY a risk mitigation control for:

    Answer: Early detection of budget overruns and under-execution before year-end

    Regular variance reviews with mandatory explanations create an early warning system that surfaces budget execution problems while there is still time to take corrective action.

  7. Which risk is MOST unique to grant-funded budget programs compared to directly appropriated programs?

    Answer: Clawback risk — the grantor may require repayment of funds if grant terms and conditions are not met

    Grant-funded programs face clawback risk, where the granting agency can demand repayment if the recipient fails to comply with grant terms, audit findings, or allowable cost rules.