CBA Risk Management & Mitigation 3

Question 1

Under OMB Circular A-11, agencies are required to include which of the following in their budget submissions to address financial risk?

Accepted Answer

Performance goals and evidence of program effectiveness

Answer

OMB Circular A-11 requires agencies to link budget requests to performance goals, providing evidence that funds will be used effectively and risks are managed.

Question 2

What is the PRIMARY difference between a 'risk mitigation' strategy and a 'risk avoidance' strategy?

Accepted Answer

Mitigation reduces the likelihood or impact of a risk; avoidance eliminates the risk by not pursuing the risky activity

Answer

Mitigation reduces a risk's probability or impact, while avoidance eliminates the risk entirely by choosing not to undertake the activity that creates it.

Question 3

An agency's budget analyst discovers that personnel costs have exceeded projections for three consecutive quarters. Which mitigation action is MOST appropriate?

Accepted Answer

Adjust the budget forecast, identify root causes (e.g., overtime, vacancies), and brief leadership

Answer

Recurring variances require revised forecasts, root cause analysis, and leadership briefing to enable informed corrective action before the situation worsens.

Question 4

The concept of 'risk appetite' in government budgeting refers to:

Accepted Answer

The level of risk an organization is willing to accept in pursuit of its objectives

Answer

Risk appetite defines how much uncertainty or potential loss an organization's leadership is willing to tolerate when pursuing its mission and budget goals.

Question 5

Which scenario BEST illustrates 'residual risk' after a mitigation strategy has been applied?

Accepted Answer

The remaining risk exposure that persists even after mitigation measures are implemented

Answer

Residual risk is the level of risk that remains after controls and mitigation efforts have been applied; it can rarely be reduced to zero.

(CBA) Certified Budget Analyst Practice Test

(CBA) Certified Budget Analyst Practice Test

CBA Risk Management & Mitigation 3