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Examination One—Governmental Environment

115 questions
Two hours and 15 minutes

I: Organization, Structure and Authority of Government (16%)

A. Differentiate between the levels of government, including:

  1. The three levels of government: federal, state and local.
  2. The interrelationships among the three levels of government: federal, state and local.

B. Differentiate between the branches of government – legislative, executive, judicial – including:

  1. The roles of the three branches.
  2. The interrelationships among the three branches.
  3. The checks and balances through separation of powers among the three branches.

C. Examine the components of federal, state and local governments (e.g., central management and accountability agencies, departments, agencies, bureaus, commissions, divisions).

D. Identify the authorities and responsibilities of the government (e.g., government-wide and departmental), including:

  1. The federal government, its hierarchy and constraints (e.g., U.S. Constitution, federal laws, executive orders, rules and regulations).
  2. The state governments, their hierarchies and constraints (e.g., U.S. Constitution, state constitutions, state laws, executive orders, rules and regulations).
  3. The local governments, their hierarchies and constraints (e.g., state constitutions, state laws, local charters, local ordinances, executive orders, rules and regulations).
  4. Tribal governments' sovereignty and their relationships with federal, state and local governments.

E. Identify the authorities and responsibilities of the different types of governments, including:

  1. The differentiation among general-purpose governments, special-purpose governments and quasi-governmental entities (e.g., federal, states, cities, counties, territories, authorities, school districts, government corporations, government-sponsored enterprises).
  2. The interrelationships among general-purpose governments, special-purpose governments and quasi-governmental entities.
  3. The role of jointly governed organizations (e.g., transit agencies).

II: Legally Based Implications of the Government Financial Environment (15%)

A. Recognize the implications of sovereignty in the levels of government, including:

  1. The meaning, application and limitations of sovereign authority.
  2. The power of governments to tax and borrow.
  3. The process of establishing monetary and fiscal policy.

B. Demonstrate an understanding of the budget, including:

  1. The role and significance of the budget in government and its relationship to strategic planning.
  2. The objectives of the budget (e.g., policy document, operations guide, financial plan, communications device).
  3. The objectives of the budget process (e.g., define priorities, debate policy, allocate resources, identify revenue sources).
  4. The legal aspects of the government budget (e.g., control levels, spending limits, fund types, balanced budgeting).
  5. The principles of legislative control over governmental finance (e.g., appropriating funds, establishing spending levels, establishing spending conditions).
  6. How the executive branch controls spending (e.g., monitoring budget execution, planning for allocation of resources over time and among programs).
  7. How judicial decisions affect government spending.
  8. The role of other budget control devices (e.g., apportionments, allotments, commitments, encumbrances/obligations, funds, function, department, activity, object).

C. Recognize special funds, dedicated revenues and related legal requirements.

D. Explain legislative “earmarking.”

III: The Government Management System (Cycle) (15%)

A. Describe the elements of the government management system, including strategic planning, programming, budgeting, operations, accounting, reporting and auditing. 

B. Identify the interrelationships among the elements of the government management system.

C. Recognize the importance of data in decision making in​ the government management system (cycle).

IV: Governmental Financing Process (20%)

A. Recognize the role of taxation, including:

  1. The elements of tax policy (e.g., what to tax, who to tax, how much to tax, why to tax).
  2. The various types of taxes for each level of government, and the roles and advantages of each type (e.g., income, wealth, consumption).
  3. The nature and role of tax expenditures.
  4. Tax limitations and exclusions.

B. Explain intergovernmental and other revenue, including:

  1. The differences among contracts, shared revenues and financial assistance (e.g., grants, cooperative agreements and loans).
  2. The differences among the types of grants (e.g., formula grants, discretionary grants, block grants).
  3. The requirements and expectations of the grantor, grantee and subrecipients throughout the grant lifecycle, including the role of the Uniform Guidance.

C. Identify other forms of financing, including:

  1. Other forms of government revenues (e.g., investment income, user fees, licenses, lotteries, donations).
  2. The rationales for establishing user fees (e.g., recover costs, expand service capacity, encourage or limit use of services).
  3. The use of leases and public-private partnerships.

D. Explain the role of debt, including:

  1. Purposes of entering into debt.
  2. Factors that should be considered before entering into debt (e.g., ability to pay, purpose, interest rate, tax base).
  3. The types of debt limitations (e.g., statutory, bond covenants).
  4. Factors that should be included in debt policies (e.g., available tax base, debt maturities).
  5. The various types of financing options (e.g., notes, bonds, lease-purchase, certificates of participation).
  6. The sources and methods of repaying debt (e.g., dedicated taxes, user fees, general revenues).
  7. The role of credit-rating agencies in the debt issuance process.
  8. The role of insurance and guarantees in the debt issuance process.

V: Concepts, Definitions and Notions of Public Accountability (16%)

A. Recognize the meaning and purpose of accountability in the government environment (e.g., the Inspector General (IG) Act of 1978,​ the Chief Financial Officers (CFO)  Act of 1990).

B. Recognize the fundamentals​ of accountability, including:

  1. Levels of accountability (i.e., policy, program, performance, process and probity/legality).
  2. Elements for which a government should be accountable (e.g., compliance, reporting, operations and systems/control).
  3. Primary stakeholders in accountability (e.g., legislators, public, other governments, investors, creditors, underwriters, future generations).
  4. Groups that help to establish and maintain accountability (e.g., legislative bodies, media, management, auditors, analysts, employees, public).

C. Identify the methods used to demonstrate and assess accountability and transparency (e.g., audit reports, performance reports, oversight hearings, program evaluations, service efforts and accomplishment (SEA) reports, electronic reports).

D. Recognize the techniques used to assess fiscal sustainability and solvency.

E. Explain concepts of open government, data transparency and citizen-centric reporting (e.g., Digital Accountability and Transparency Act of 2014 (DATA Act), Evidence Act, Freedom of Information Acts (FOIA), open checkbooks, open book, sunshine laws).

VI: Ethics as Applied to the Government Environment (10%)

A. Apply key concepts related to ethical responsibility to the public, professional conduct (e.g., actual or perceived conflicts of interest, independence, objectivity, due care) and the sources of guidance (e.g., the AGA Code of Ethics).

B. Determine the steps a government financial manager needs to take to avoid a conflict of interest and to ensure objectivity and independence.

C. Explain the concept of due care in the performance of professional duties.

D. Identify activities or situations that are inconsistent with the responsibilities of public officials and employees.

E. Determine the appropriate course of action to avoid the reality or the perception of improper use of one's office for personal gain.

F. Explain personal responsibility as it relates to organizational codes of conduct (e.g., whistle blower, nepotism).

VII: Providing Government Services and Information Electronically (8%)

A. Recognize delivery of government services and e-government (e.g., driver’s license renewal, online bill and tax payment).

B. Examine stakeholder real-time access to information, including electronic financial reporting.

C. Identify the use of various media and tools for communications and providing services (e.g., websites, apps, mobile devices).

D. Explain security, cybersecurity and privacy considerations (e.g., the requirements of the National Institute of Standards and Technology (NIST), encryption).