CLG 006 Certifying Officer Practice Exam

The amount of pecuniary liability is determined by which of the following?

1. The total budget amount

2. The erroneous payment plus penalties

3. The erroneous payment less any amounts recovered from the payee

4. All financial transactions for the year

The correct answer is: The erroneous payment less any amounts recovered from the payee

The correct choice reflects how the pecuniary liability is calculated in the context of government financial management. Pecuniary liability typically refers to the obligation to pay a specific sum of money resulting from an erroneous payment. In this case, the liability is the erroneous payment minus any amounts that have been recovered from the payee. This approach is crucial because it acknowledges that if some funds have been recovered, the state or agency is not liable for the full amount of the erroneous payment. Therefore, the net amount—after accounting for any recoveries—provides a more accurate representation of the financial responsibility. The other options do not directly reflect the principle of liability calculation. The total budget amount does not represent any specific liability, nor do all financial transactions provide relevant context for a specific erroneous payment. The erroneous payment plus penalties might highlight additional costs, but without considering recoveries, it does not accurately reflect the final pecuniary liability. Thus, focusing on the erroneous payment net of recoveries accurately captures the essence of pecuniary liabilities.