Certified Government Financial Manager (CGFM) Practice Exam 2025 – Your All-in-One Guide to Exam Success!

Pension funds administered through trusts must be reported as fiduciary activities of the government because they involve the management of assets held in trust for the benefit of others. In this context, fiduciary activities are those in which the government acts as a trustee or agent for individuals or other entities, managing resources that are not available for the government's own use.

Fiduciary funds, such as pension trust funds, are distinct from governmental funds because the assets are set aside for specific beneficiaries, and decisions regarding the use of these funds are made based on the interests of those beneficiaries, rather than for public services. The accounting and reporting require stringent fiduciary responsibilities, emphasizing the trust relationship and the duty to manage the assets solely for the benefit of the plan participants.

In contrast, the other items listed—like a general fund budget surplus, operating fund revenues, and non-profit contributions—are not managed in a fiduciary capacity where the government has an obligation to a third-party beneficiary. Instead, these items relate more closely to the government’s operational or management activities rather than fiduciary obligations.