CBA Risk Management & Mitigation 5

Question 1

A budget analyst is reviewing a public-private partnership (P3) agreement. Which risk is MOST commonly transferred to the private partner in such arrangements?

Accepted Answer

Construction cost overrun and schedule risk

Answer

P3 agreements typically transfer construction, operational, and performance risks to the private sector partner in exchange for long-term service fees or user revenues.

Question 2

What does 'risk velocity' refer to in budget risk management?

Accepted Answer

The speed at which a risk, once triggered, will impact the organization

Answer

Risk velocity (or speed of onset) describes how quickly a risk materializes into actual harm, which affects how much lead time decision-makers have to respond.

Question 3

An agency's Inspector General (IG) identifies a 'material weakness' in budget controls. Under FMFIA, what action is REQUIRED?

Accepted Answer

The agency head must report the weakness and corrective action plan in the annual assurance statement

Answer

FMFIA requires agency heads to disclose material weaknesses and their corrective action plans in the annual Federal Managers' Financial Integrity Act assurance statement.

Question 4

Which approach BEST addresses the budget risk posed by 'scope creep' in a multi-year government IT modernization project?

Accepted Answer

Implementing a formal change control process that requires budget impact analysis before approving scope changes

Answer

A formal change control process ensures every scope addition triggers a budget impact analysis, preventing uncontrolled cost growth from incremental scope additions.

Question 5

In government budget risk management, an 'upside risk' (positive risk or opportunity) should be handled by:

Accepted Answer

Exploiting, sharing, or enhancing it to maximize potential benefit to the organization

Answer

Modern risk management frameworks recognize positive risks (opportunities) and prescribe responses such as exploiting, enhancing, or sharing them to maximize mission value.

(CBA) Certified Budget Analyst Practice Test

(CBA) Certified Budget Analyst Practice Test

CBA Risk Management & Mitigation 5