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CDFM Module 2 study materials
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CDFM Module 2 practice questions

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Question 1Budget Process and Formulation

Which budget document is the President's formal request to Congress for the coming fiscal year, showing proposed spending by agency and account?

  1. The apportionment letter
  2. The President's Budget Correct answer.
  3. The concurrent budget resolution
  4. The Treasury warrant

Explanation

The President's Budget is submitted annually under the Budget and Accounting Act and displays proposed new budget authority, outlays, and receipts by agency, account, and function. The concurrent resolution and apportionment are later stages in the process, not the President's request.

Question 2Budget Process and Formulation

In the federal budget process, which actor is responsible for issuing apportionments that distribute budgetary authority by period or activity?

  1. The Government Accountability Office
  2. The Department of the Treasury
  3. The Congressional Budget Office
  4. The Office of Management and Budget Correct answer.

Explanation

OMB apportions appropriated funds to agencies under the Antideficiency Act, controlling how much authority may be used in each period or activity. GAO audits, CBO analyzes, and Treasury disburses, so none of them performs apportionment.

Question 3Budget Process and Formulation

Which congressional budget document sets forth aggregate levels for new budget authority, outlays, revenues, and the deficit, and may include reconciliation instructions?

  1. The authorization act
  2. The annual appropriations act
  3. The continuing resolution
  4. The concurrent budget resolution Correct answer.

Explanation

The concurrent budget resolution is adopted by both chambers and establishes aggregate spending and revenue targets, including reconciliation directives. Appropriations acts provide actual authority, authorizations create programs, and continuing resolutions extend prior funding.

Question 4Budget Process and Formulation

Which type of budget authority becomes available for obligation only after it is appropriated and is not subject to a time limit until spent?

  1. No-year budget authority Correct answer.
  2. Expired budget authority
  3. Multiple-year budget authority
  4. Annual budget authority

Explanation

No-year authority remains available for obligation until expended, without a fiscal-year limitation. Annual and multiple-year authority carry defined obligation periods, and expired authority is no longer available for new obligations.

Question 5Budget Process and Formulation

The federal fiscal year begins on which date?

  1. July 1
  2. April 1
  3. January 1
  4. October 1 Correct answer.

Explanation

Since the shift under the Congressional Budget Act, the federal fiscal year begins October 1 and ends September 30. This timing allows Congress to act on the budget resolution and appropriations before the year starts.

Question 6Budget Process and Formulation

Which term describes the process by which Congress incorporates the spending and revenue decisions of its committees into a single bill that cannot be filibustered in the Senate?

  1. Reprogramming
  2. Reconciliation Correct answer.
  3. Deferral
  4. Rescission

Explanation

Reconciliation is a procedure under the Congressional Budget Act that allows legislation implementing the budget resolution to move with expedited Senate consideration. Rescissions and deferrals concern execution, and reprogramming shifts funds within an account.

Question 7Budget Process and Formulation

Agencies submit budget requests to OMB for review under which set of policy and planning guidance issued each year?

  1. The Federal Acquisition Regulation
  2. OMB Circular A-11 Correct answer.
  3. The Treasury Financial Manual
  4. OMB Circular A-123

Explanation

OMB Circular A-11 provides the annual instructions for preparing, submitting, and executing the federal budget, including formats and policy assumptions. The FAR governs procurement, A-123 covers internal control, and the Treasury Financial Manual covers accounting and reporting.

Question 8Budget Process and Formulation

Which of the following is classified as mandatory spending in the federal budget?

  1. Operating costs of the National Park Service
  2. Construction of a new courthouse
  3. Salaries of civilian defense acquisition staff
  4. Social Security benefit payments Correct answer.

Explanation

Mandatory spending flows from permanent law, such as the Social Security Act, and does not depend on annual appropriations acts. Salaries, construction, and agency operations are funded through discretionary appropriations.

Question 9Budget Process and Formulation

An agency receives a one-year appropriation of $50 million. By the end of the fiscal year it has obligated $45 million. What happens to the remaining $5 million?

  1. It is automatically transferred to the agency's next-year appropriation
  2. It must be returned to the Treasury as an offsetting receipt immediately
  3. It remains available for obligation in later years
  4. It expires for new obligations but may be used to pay obligations incurred in the appropriation year Correct answer.

Explanation

One-year authority expires for new obligations at the end of the period of availability, but the expired balance remains available for upward adjustments and payments of previously recorded obligations. It is not automatically carried forward or immediately returned.

Question 10Budget Process and Formulation

An agency needs to move $2 million between object classes within the same appropriation to cover higher-than-planned travel costs. What is the appropriate action?

  1. Obligate against the following year's appropriation
  2. Use the transfer authority in the appropriation act without limit
  3. Seek a rescission from the President
  4. Request a reprogramming after notifying the appropriate committees Correct answer.

Explanation

Reprogramming shifts funds within an appropriation for a different purpose and generally requires notification to and sometimes approval by the appropriations committees. Rescissions cancel authority, transfers move funds between appropriations and are limited by statute, and future-year funds cannot cover current needs.

Question 11Budget Process and Formulation

A program receives $10 million in budget authority in the current year, of which $6 million is obligated. If $4 million is spent from the obligations during the year, what are the current-year outlays?

  1. $2 million
  2. $6 million
  3. $4 million Correct answer.
  4. $10 million

Explanation

Outlays are actual payments, not obligations or budget authority. Spending $4 million of obligated funds produces $4 million in outlays for the period, while the remaining obligations will convert to outlays when paid.

Question 12Budget Process and Formulation

Agencies must submit their budget requests to OMB in the fall for the budget year that begins the following October. Which step occurs immediately after OMB completes its review and the President finalizes decisions?

  1. Agencies begin obligating new budget authority
  2. OMB issues apportionments for the new year
  3. The President transmits the budget to Congress in early February Correct answer.
  4. Congress adopts the concurrent budget resolution

Explanation

After OMB review and presidential decisions, the budget is transmitted to Congress, generally in early February. The budget resolution, apportionments, and obligations occur later in the cycle.

Question 13Budget Process and Formulation

Which term describes a President's cancellation of budget authority that must be submitted to Congress and can take effect unless Congress disapproves?

  1. Deferral
  2. Apportionment
  3. Rescission Correct answer.
  4. Reprogramming

Explanation

A rescission is a presidential proposal to cancel budget authority, which Congress must act on within a specified period. A deferral temporarily withholds funds, reprogramming shifts funds, and apportionment distributes authority.

Question 14Budget Process and Formulation

An agency's appropriation is enacted without a specific period of availability. Under federal budget practice, what period applies?

  1. Three fiscal years
  2. Five fiscal years
  3. One fiscal year
  4. Until expended, unless otherwise specified Correct answer.

Explanation

Unless the appropriations act specifies a period, budget authority is generally available until expended, making it no-year authority. Annual and multiple-year limits apply only when the statute imposes them.

Question 15Budget Process and Formulation

Which document must Congress pass to provide legal authority for agencies to obligate funds when regular appropriations acts have not been enacted by October 1?

  1. An authorization act
  2. A supplemental appropriation
  3. A continuing resolution Correct answer.
  4. A budget resolution

Explanation

A continuing resolution provides temporary funding at specified rates until regular appropriations are enacted. A budget resolution sets aggregates without providing authority, and authorization and supplemental acts serve different purposes.

Question 16Budget Process and Formulation

Which budget concept treats tax expenditures as a form of spending achieved through the tax code rather than through appropriations?

  1. Offsetting collections
  2. Balanced budget scoring
  3. Baseline projection
  4. Tax expenditure analysis Correct answer.

Explanation

Tax expenditures are revenue losses attributable to provisions of the tax code that function like spending, and they are reported in budget documents for transparency. Offsetting collections and baseline projections are different budget concepts.

Question 17Budget Process and Formulation

An agency's budget officer must apply the apportionment that OMB issued at the start of the year. The apportionment limits obligations to a quarterly amount. What is the consequence of obligating beyond that quarterly limit without additional authority?

  1. A deferral report
  2. A reprogramming request
  3. An Antideficiency Act violation Correct answer.
  4. A rescission proposal

Explanation

The Antideficiency Act prohibits obligating funds in excess of an apportionment, so exceeding the quarterly limit is a violation. Reprogramming, rescission, and deferral are separate budget actions.

Question 18Budget Process and Formulation

Which committee action typically precedes an appropriations act by authorizing a program and recommending a funding level?

  1. Reconciliation instruction
  2. Apportionment issuance
  3. Budget resolution adoption
  4. Authorization committee action Correct answer.

Explanation

Authorization committees establish or continue programs and recommend funding levels, which appropriators may then fund. The budget resolution and reconciliation set aggregates, and apportionment occurs after enactment.

Question 19Budget Process and Formulation

The budget baseline used for scoring assumes current law continues. If a program's authorization expires but appropriations continue, how is the baseline generally treated?

  1. The program is scored as a new mandatory program
  2. The program is removed from the baseline entirely
  3. The program is assumed to terminate immediately
  4. The program is assumed to continue at current levels Correct answer.

Explanation

Baseline projections generally assume current-law funding continues, so expiring authorizations do not automatically remove a program from the baseline. This assumption keeps comparisons of policy changes meaningful.

Question 20Budget Process and Formulation

Which of the following best describes the purpose of a budget resolution's reconciliation instructions?

  1. To direct committees to report legislation changing spending or revenue to meet the resolution's targets Correct answer.
  2. To authorize agencies to obligate funds before appropriations are enacted
  3. To require OMB to apportion funds quarterly
  4. To establish the President's budget request

Explanation

Reconciliation instructions tell specified committees to produce legislation that changes spending or revenues by stated amounts, allowing the budget plan to be implemented. They do not authorize obligations, mandate apportionment, or create the President's budget.

Question 21Budget Process and Formulation

An agency has multiple-year authority available for three years. In year two, it obligates funds and in year four it pays the resulting invoice. What is the status of the funds in year four?

  1. Automatically converted to no-year authority
  2. Cancelled and unavailable for any purpose
  3. Available for new obligations
  4. Expired but available to liquidate the prior obligation Correct answer.

Explanation

After the period of availability ends, multiple-year authority becomes expired but remains available to pay obligations properly incurred during the availability period. It cannot support new obligations and is not automatically converted.

Question 22Budget Process and Formulation

Which scoring practice requires that new entitlement legislation be offset so that it does not increase the deficit over a specified period?

  1. Apportionment scoring
  2. Program assessment rating
  3. Pay-as-you-go scoring Correct answer.
  4. Baseline scoring

Explanation

Pay-as-you-go rules require that legislation affecting mandatory spending or revenues be deficit-neutral, with offsets for new costs. Baseline scoring projects current law, apportionment distributes funds, and program assessment rates performance.

Question 23Budget Process and Formulation

A supplemental appropriation is enacted mid-year for disaster response. How is it generally treated in budget scoring compared with the original appropriations act?

  1. It is scored as additional budget authority and outlays in the year enacted Correct answer.
  2. It is treated as a rescission of prior authority
  3. It is excluded from the budget totals
  4. It is scored as an offsetting collection

Explanation

Supplemental appropriations provide additional budget authority and are scored as new spending when enacted, unless designated as emergency requirements under applicable rules. They are not offsetting collections or rescissions.

Question 24Budget Process and Formulation

Which action would violate the purpose statute that requires appropriated funds to be used only for the purposes for which they were appropriated?

  1. Using military construction funds to pay for routine office supplies Correct answer.
  2. Using an appropriation for its stated program activities
  3. Using funds for authorized overtime within the program
  4. Using operations funds to pay for a program's travel costs

Explanation

The purpose statute limits expenditures to the objects and programs for which funds were appropriated, so using construction funds for routine supplies is an unauthorized purpose. The other options describe uses consistent with the appropriation's purpose.

Question 25Budget Process and Formulation

During budget formulation, an agency proposes a new program with a five-year cost. Which presentation best reflects the budget's requirement to show both budget authority and outlays?

  1. Budget authority by year and estimated outlays by year Correct answer.
  2. Only obligations by year
  3. Only the total five-year budget authority
  4. Only the first-year outlays

Explanation

Budget documents must display new budget authority and estimated outlays by year because authority and outlays occur on different schedules. Showing only one measure would obscure the timing of spending.

Question 26Budget Process and Formulation

During budget formulation, which OMB circular establishes the federal government's basic budget preparation, execution, and reporting framework that agencies follow when building their submissions?

  1. OMB Circular A-76
  2. OMB Circular A-123
  3. OMB Circular A-94
  4. OMB Circular A-11 Correct answer.

Explanation

Circular A-11, Preparation, Submission, and Execution of the Budget, is the central guidance that governs how agencies prepare, submit, and execute their budgets. It defines budget concepts, formats, and schedules used throughout formulation. The other circulars address distinct management topics rather than the core budget process.

Question 27Budget Process and Formulation

An agency's budget office is preparing the portion of the request that converts program costs into budget authority and outlays by fiscal year. Which budget concept does this conversion reflect?

  1. Budgetary accounting on an obligation basis with outlay scoring Correct answer.
  2. Full-cost accrual accounting
  3. Obligation-based accounting directly
  4. Cash-basis accounting only

Explanation

Federal budgeting records budget authority when funds are provided and outlays when obligations are liquidated into payments. The budget presentation therefore shows budget authority and outlays by year rather than a simple cash or accrual view. This obligation-based budgetary accounting is the framework agencies use when formulating requests.

Question 28Budget Process and Formulation

An agency is formulating its budget and must distinguish discretionary from mandatory funding for a new program. Which characteristic makes a program's funding mandatory?

  1. Funding is provided only through a continuing resolution
  2. Funding is approved by the agency head without congressional action
  3. Funding is provided in annual appropriations acts subject to the annual review cycle
  4. Funding is controlled by substantive law that obligates the government to make payments Correct answer.

Explanation

Mandatory spending arises from substantive law that creates a legal obligation to pay, such as entitlement formulas, rather than from annual discretionary appropriations. The budget examiners classify programs by whether the funding flows automatically from authorizing law or requires annual action. Discretionary programs must be funded through appropriations acts each year.

Question 29Budget Process and Formulation

During budget formulation, an agency projects that a program will require $12 million in the budget year and $13 million, $14 million, and $15 million in the following three years. What is the standard term for this multiyear presentation?

  1. The apportionment schedule
  2. The baseline estimate
  3. The obligation plan
  4. The outyear projections Correct answer.

Explanation

Outyear projections show estimated funding needs beyond the budget year, typically for the following four years, and accompany the budget-year request. They allow decision makers to see the future cost implications of current proposals. Apportionments and obligation plans are execution tools rather than formulation projections.

Question 30Budget Process and Formulation

An agency's budget request includes a proposal to shift a program's funding from discretionary appropriations to a mandatory trust fund. How does this proposal most directly affect the budget process?

  1. It automatically reduces total federal spending by the program's amount
  2. It eliminates the need for OMB review of the program's budget
  3. It requires the program to be funded only through supplemental appropriations
  4. It removes the program from the annual appropriations cycle and places funding under substantive law Correct answer.

Explanation

Moving a program to mandatory funding means its spending is governed by substantive law rather than annual appropriations acts, so it leaves the discretionary appropriations cycle. Total spending is not automatically reduced; only the classification and decision process change. OMB review and scoring still apply to mandatory proposals.

Question 31Budget Process and Formulation

An agency's budget officer is assembling the justification material that accompanies the budget request. Which element is required in this material?

  1. A statement of the program's performance goals and measures Correct answer.
  2. A copy of every contract the agency will award
  3. The agency's audited financial statements for the prior year
  4. The names of all employees assigned to the program

Explanation

Budget justification materials must link funding requests to performance goals and measures so decision makers can assess results. Contract listings, audited financial statements, and personnel rosters are not standard components of the justification. Performance information is a required and central part of the submission.

Question 32Budget Process and Formulation

An agency is preparing its budget submission and must include a summary of its capital asset plan. Which criterion is central to justifying a major acquisition in the budget request?

  1. The asset must be leased rather than purchased
  2. The asset must be approved by the agency's inspector general before submission
  3. The asset must be fully funded in a single year
  4. The asset must show a positive return on investment or cost-benefit justification Correct answer.

Explanation

Major capital acquisitions in the budget request must be justified through cost-benefit or return-on-investment analysis showing the investment is worthwhile. Full funding in one year is not required, and leasing is not mandated. Inspector general approval is not a formulation requirement.

Question 33Budget Process and Formulation

An agency receives an appropriation for a program but has not yet received an OMB apportionment. What is the agency's obligation authority in this situation?

  1. It may obligate funds up to half the appropriation without apportionment
  2. It may obligate funds only with congressional committee approval
  3. It may obligate the full appropriation immediately
  4. It may obligate funds only after OMB apportions them, subject to limited exceptions Correct answer.

Explanation

Under the Antideficiency Act framework, funds must be apportioned by OMB before agencies obligate them, with narrow exceptions such as certain automatic apportionments. Obligating the full appropriation without apportionment risks a violation. Congressional committee approval and arbitrary fractions are not substitutes for apportionment.

Question 34Budget Process and Formulation

Which action best describes the President's role in the budget process before the budget is transmitted to Congress?

  1. The President certifies the budget resolution passed by Congress
  2. The President resolves final policy and funding decisions among agencies through OMB review Correct answer.
  3. The President apportions funds to each agency at the start of the year
  4. The President signs appropriations acts into law during formulation

Explanation

During formulation, OMB reviews agency requests and the President makes the final policy and funding decisions reflected in the budget transmitted to Congress. Signing appropriations acts occurs later in the enactment phase, and apportionment is an OMB execution action. The President does not certify congressional budget resolutions.

Question 35Budget Process and Formulation

An agency's budget is being formulated under a continuing resolution that funds operations at prior-year levels. How should the budget office treat this in its formulation assumptions?

  1. Request a supplemental appropriation equal to the full program cost
  2. Exclude the program from the budget request because funding is uncertain
  3. Assume the continuing resolution amount is the final enacted level for the budget year
  4. Treat the continuing resolution as temporary and formulate against the President's proposed level Correct answer.

Explanation

A continuing resolution provides temporary funding at specified rates and does not set the budget-year level the agency should plan against. Formulation proceeds on the President's proposed policy and funding levels, with the continuing resolution treated as a temporary bridge. Assuming the CR is final would misstate the request.

Question 36Budget Process and Formulation

An agency must submit its budget request to OMB by a specified date. Which factor most affects the schedule OMB sets for that submission?

  1. The date the agency's authorizing committee reports its bill
  2. The date the President delivers the budget to Congress Correct answer.
  3. The date the fiscal year ends
  4. The date the agency's inspector general completes its audit

Explanation

OMB works backward from the date the President transmits the budget to Congress, setting agency submission deadlines that allow time for review and decisions. The fiscal year end, audit completion, and committee reporting dates do not drive the submission schedule. The transmission date is the anchor for the formulation calendar.

Question 37Budget Process and Formulation

Which term describes the OMB passback in the budget formulation process?

  1. Congress's markup of the President's budget
  2. OMB's communication of the President's decisions on the agency's request Correct answer.
  3. The Treasury's report on outlays
  4. The agency's initial request to OMB

Explanation

A passback is OMB's communication to an agency of the funding and policy decisions made during executive review, usually after hearings and before the budget is finalized. It is not the agency's request, a congressional markup, or a Treasury report. The agency may appeal a passback, but the President's decision is final.

Question 38Budget Process and Formulation

An agency proposes a new program with a five-year cost. Which presentation best reflects sound budget formulation practice?

  1. Show only the outlays expected in the first year
  2. Show only the budget-year cost and omit later years
  3. Show budget authority and outlays for each year of the five-year period Correct answer.
  4. Show the total five-year cost as a single lump sum

Explanation

Sound formulation presents budget authority and outlays for each year of the projection period so decision makers can see the full cost and timing. A lump sum or first-year-only figure obscures the program's future obligations. Omitting later years understates the commitment.

Question 39Budget Process and Formulation

Which document does OMB issue to agencies to provide the policy and planning assumptions that guide preparation of their budget requests?

  1. The President's budget message
  2. The congressional budget resolution
  3. The Treasury financial report
  4. The budget call and its accompanying guidance Correct answer.

Explanation

OMB issues the budget call, including policy guidance and planning assumptions, to start the formulation cycle each year. It tells agencies what to assume and how to structure their submissions. The President's budget message and the budget resolution come later or from other actors.

Question 40Budget Process and Formulation

An agency's budget officer is deciding how to present a proposal that would shift costs between two appropriation accounts. Which consideration is most important for the formulation submission?

  1. Whether the shift changes the total budget authority requested
  2. Whether the shift shortens the period of availability
  3. Whether the shift reduces the number of full-time employees
  4. Whether the shift complies with the purpose and account structure established by law Correct answer.

Explanation

Formulation must respect the legal account structure and purpose statutes, because funds may be used only for the purposes and accounts Congress establishes. A shift that misaligns costs with the proper account can create an improper augmentation or purpose violation. Total budget authority and staffing effects are secondary to legal compliance.

Question 41Budget Execution

Under federal appropriations law, an agency's authority to incur obligations against a fixed-term appropriation generally expires at the end of the period of availability, while the authority to liquidate those obligations continues for how long?

  1. Through the following fiscal year only
  2. For five years after the appropriation's expiration
  3. As long as the appropriation account remains open on the books
  4. Indefinitely, until the obligation is actually paid Correct answer.

Explanation

The bona fide needs rule and the account-closing statute (31 U.S.C. 1552) allow an expired appropriation to be used for upward adjustments and payments of obligations validly incurred during its period of availability; the obligated balance remains available until the obligation is liquidated, subject to the five-year closing of the account to new obligations. The key distinction tested on the CDFM is that expiration ends new obligation authority, not the authority to pay existing obligations.

Question 42Budget Execution

An agency receives an apportionment from OMB that divides its budgetary resources by quarter. Which action is the agency's budget officer authorized to take?

  1. Obligate funds in excess of the apportionment if the need is documented
  2. Reapportion the funds to a different quarter without OMB approval
  3. Transfer the apportioned amounts to another appropriation with a similar purpose
  4. Subdivide the apportionment into allotments and further into suballotments for subordinate units Correct answer.

Explanation

Apportionment is the OMB-level distribution of budgetary resources; agencies then make administrative subdivisions through allotments (usually by the head of the agency or designee) and suballotments to operating levels. Reapportionment and transfers require OMB or statutory authority, and obligating above an apportionment violates the Antideficiency Act.

Question 43Budget Execution

Which document formally establishes the legal availability of funds and is the basis for recording an obligation in the agency's financial system?

  1. The apportionment letter issued by OMB
  2. The funding authorization document, such as a funded purchase order or contract Correct answer.
  3. The budget execution report submitted to OMB
  4. The purchase request submitted by the requiring activity

Explanation

An obligation is recorded when a legally binding commitment is made, evidenced by a funding document such as a contract, purchase order, or travel authorization that cites the appropriation. The apportionment and budget reports are control and reporting tools, not the instrument that creates the obligation.

Question 44Budget Execution

The purpose statute (31 U.S.C. 1301) requires that an expenditure be necessary and incident to the purpose for which the appropriation was made. Which test is applied to determine whether a proposed expense satisfies this requirement?

  1. Whether the expense was approved by the agency's contracting officer
  2. Whether the expense exceeds the agency's prior-year spending level
  3. Whether the expense is a necessary expense, a proper expense, or otherwise authorized by law Correct answer.
  4. Whether the expense was included in the President's budget request

Explanation

GAO's three-part purpose analysis asks whether the expenditure falls within the purpose of the appropriation (necessary expense), whether it is a proper expense that does not violate other rules, and whether any specific statutory authorization exists. Inclusion in the budget request or approval by a contracting officer does not by itself establish legal availability.

Question 45Budget Execution

An agency has unobligated balances in an annual appropriation late in the fiscal year and is considering a legitimate need that will not arise until next year. Under the bona fide needs rule, which action is appropriate?

  1. Obligate now and carry the requirement into next year to avoid losing the funds
  2. Record the obligation now and adjust the delivery schedule later
  3. Obligate now only if the contracting officer signs a statement of urgency
  4. Defer the requirement and fund it from the appropriation available in the year the need arises Correct answer.

Explanation

The bona fide needs rule requires that an appropriation be used only for needs arising during its period of availability. A need that genuinely arises in a later year must be charged to the appropriation available in that year; obligating early to avoid losing funds is a violation.

Question 46Budget Execution

A program manager wants to shift $400,000 from a personnel object class to a services object class within the same appropriation. Which control most directly governs whether this reprogramming action may proceed?

  1. The OMB apportionment cycle for the current quarter
  2. The prompt payment requirements of the Prompt Payment Act
  3. The agency's obligation and expenditure thresholds set in its fund control regulations and any applicable statutory reprogramming limits Correct answer.
  4. The Treasury Department's cash management rules

Explanation

Reprogramming within an appropriation is governed by the agency's administrative fund control system, which sets thresholds for who may approve shifts among object classes and program activities, together with any statutory or committee-notification reprogramming rules. Apportionment, Treasury cash management, and prompt payment rules address different controls.

Question 47Budget Execution

During midyear review, an analyst finds that obligations in a program are running well above the rate assumed in the apportionment. What is the most appropriate first response under budget execution controls?

  1. Freeze all obligations in the program until the next fiscal year
  2. Transfer the excess obligations to a related program's appropriation
  3. Analyze the variance, then seek a reapportionment or adjust spending plans to stay within the apportionment Correct answer.
  4. Continue obligating and request a supplemental appropriation at year end

Explanation

Budget execution requires monitoring actual obligations against plans and apportionments and taking corrective action before an Antideficiency Act violation occurs. The standard remedy is analysis followed by a reapportionment request to OMB or an adjustment of spending plans, not unilateral transfers or continued overobligation.

Question 48Budget Execution

Which of the following best describes the relationship between an appropriation, an apportionment, and an allotment?

  1. The appropriation provides authority, the apportionment distributes it by time period, and the allotment subdivides it administratively Correct answer.
  2. Each is a separate appropriation enacted by Congress
  3. The apportionment is issued by the agency head and the allotment by OMB
  4. The allotment must be issued before OMB can apportion funds

Explanation

Congress appropriates budgetary resources, OMB apportions them to control the rate of obligation, and the agency head allots them to operating units for administrative control. The sequence runs from legislative authority to executive distribution to agency subdivision.

Question 49Budget Execution

An agency's appropriation expires on September 30, but a valid obligation incurred in August is not invoiced until December. Which statement is correct?

  1. The invoice may be paid only after Congress enacts a new appropriation for the same purpose
  2. The invoice must be paid from the next fiscal year's appropriation
  3. The invoice may be paid from the expired appropriation because it liquidates an obligation validly incurred during the period of availability Correct answer.
  4. The invoice cannot be paid because the appropriation has expired

Explanation

Expiration ends the authority to incur new obligations but preserves the obligated balance for liquidation of valid obligations, including upward adjustments within the account-closing rules. Payment is charged to the appropriation that was available when the obligation was made.

Question 50Budget Execution

Which situation constitutes an Antideficiency Act violation?

  1. Recording an obligation in the correct amount on the date the contract is awarded
  2. Committing the government to a contract before funds are obligated when the apportionment is insufficient to cover it Correct answer.
  3. Suballoting funds to a field activity at the start of the quarter
  4. Requesting a reapportionment when obligations are projected to exceed the current apportionment

Explanation

The Antideficiency Act prohibits obligating or expending in advance of appropriations, in excess of amounts apportioned, or in excess of the amount available in the appropriation. Incurring a commitment without sufficient available funds is a classic violation, whereas proper recording, reapportionment requests, and suballotments are lawful practices.