GFMC Questions Bank

Management's Role in Resolving Audit Recommendations:

By appointing a senior official to oversee the resolution of audit recommendations, management demonstrates itscommitment and supportfor the audit process.

This action indicates a proactive approach to addressing findings and improving operations.

Explanation of Answer Choices:

A. Agreement with the audit findings: While this may indicate agreement, appointing a senior official is more about ensuring action is taken rather than expressing agreement.

B. Disagreement with the audit findings: Incorrect. Appointing a senior official is a constructive step, not an indication of disagreement.

C. Delegation of authority: Incorrect. Delegation is involved, but the key point is the demonstration of management’s support for addressing audit findings.

D. Support for the audit process: Correct. This action underscores management's commitment to resolving audit findings and improving accountability.

 What Does OMB Circular A-50 Require?

OMB Circular A-50establishes policies for resolving and following up on audit findings and recommendations. It assignspersonal responsibilityto anaudit follow-up officialwithin the agency for ensuring that disagreements with audit findings are resolved and that corrective actions are implemented.

 Why Is the Audit Follow-Up Official Responsible?

The follow-up official ensures the agency responds appropriately to audit findings, tracks corrective actions, and resolves disagreements in a timely manner. This ensures accountability and compliance with audit recommendations.

 Why Other Options Are Incorrect:

A. Comptroller General:The Comptroller General leads the GAO and oversees audits but is not responsible for resolving disagreements within agencies.

B. OMB Deputy Director for Management:Provides guidance on audit policies but does not hold personal responsibility for resolving disagreements.

C. Inspector General:Performs audits and investigations but does not resolve disagreements over audit findings.

 References and Documents:

OMB Circular A-50:Specifies that the audit follow-up official holds responsibility for resolving disagreements.

GAO Yellow Book:Discusses the roles and responsibilities of various officials in audit processes.

 What Is Efficient Inventory Management?

Efficient inventory management ensures that an organization has the right amount of inventory at the right time to meet operational needs without overstocking or understocking.

Proper inventory management minimizes disruptions to operations, including work stoppages due to lack of necessary materials or supplies.

 Why Is Fewer Instances of Work Stoppage the Correct Answer?

Efficient inventory management ensures that required inventory is available when needed, reducing the risk of work delays or stoppages caused by inventory shortages.

 Why Other Options Are Incorrect:

A. A low inventory turnover ratio:A low turnover ratio often indicates overstocking or slow-moving inventory, which is not a sign of efficiency.

B. High write-offs of obsolete inventory:Efficient management reduces obsolete inventory, leading to fewer write-offs, not more.

D. High total asset turnover:While efficient inventory management may contribute to overall asset efficiency, it does not directly result in a high total asset turnover ratio.

 References and Documents:

GAO Guide on Inventory Management:Emphasizes the role of inventory management in avoiding operational disruptions.

Best Practices for Inventory Management (AGA):Highlights reduced work stoppages as a key benefit of effective inventory control.

Scope of Single Audit:The scope includes:

Financial Statements: Ensuring accurate reporting of financial activities.

Internal Controls: Evaluating effectiveness in compliance with federal requirements.

Compliance: Ensuring compliance with the terms and conditions of the award.

Explanation of Answer Choices:

A. Financial statements: Included in the audit.

B. Internal controls: Included to ensure compliance.

C. Performance results: Correct. Single audits do not assess program outcomes or effectiveness.

D. Compliance with terms of the award: Included to ensure federal funds are used appropriately.