CDFM Budget Formulation and Execution 4 — Questions and Answers
Question 1: In federal budgeting, what is the distinction between 'discretionary' and 'mandatory' spending?
- Discretionary spending is controlled through annual appropriations while mandatory spending is governed by permanent law (Correct answer)
- Discretionary spending is uncontrollable while mandatory spending is subject to annual caps
- Discretionary spending funds entitlement programs while mandatory spending funds defense
- Discretionary spending requires a presidential waiver while mandatory spending does not
Correct answer: Discretionary spending is controlled through annual appropriations while mandatory spending is governed by permanent law
Discretionary spending is funded through annual appropriations acts subject to congressional control, while mandatory spending is controlled by authorizing legislation and paid automatically.
Question 2: What is the role of the Program Budget Decision (PBD) in the DoD PPBE process?
- It is issued by military departments to allocate funds to programs
- It is an OSD document that records decisions made during the budget review to adjust the BES (Correct answer)
- It authorizes DoD to submit the President's budget to Congress
- It is the OMB document that apportions funds to defense agencies
Correct answer: It is an OSD document that records decisions made during the budget review to adjust the BES
PBDs are issued by OSD to document the Secretary of Defense's decisions that adjust the military departments' Budget Estimate Submissions during the OSD budget review.
Question 3: Which appropriation type funds the research, development, test, and evaluation of new defense systems prior to procurement?
- Operations and Maintenance (O&M)
- Research, Development, Test and Evaluation (RDT&E) (Correct answer)
- Military Construction (MILCON)
- Other Procurement
Correct answer: Research, Development, Test and Evaluation (RDT&E)
RDT&E appropriations fund the development of new weapons systems, equipment, and technologies through the research and testing phases before full-rate production.
Question 4: Under DoD financial management regulations, what constitutes an 'Antideficiency Act violation'?
- Failing to submit a budget request within the required timeframe
- Obligating or expending funds in excess of amounts available in an appropriation (Correct answer)
- Using appropriated funds for a purpose not originally planned but still legal
- Requesting supplemental appropriations more than once in a fiscal year
Correct answer: Obligating or expending funds in excess of amounts available in an appropriation
An Antideficiency Act violation occurs when an agency obligates or expends funds beyond the amount available in the applicable appropriation or apportionment.
Question 5: In the DoD budget process, what is a 'fence' or 'fenced funds' restriction?
- A security classification applied to sensitive budget line items
- A congressional restriction limiting the use of specific appropriated funds (Correct answer)
- A DoD policy prohibiting reprogramming of certain program accounts
- A Treasury limitation on fund transfers between fiscal years
Correct answer: A congressional restriction limiting the use of specific appropriated funds
Fenced funds are appropriated amounts that Congress has restricted to specific programs or purposes, preventing DoD from reprogramming or using them for other purposes.
Question 6: What is the function of the Defense Finance and Accounting Service (DFAS) in budget execution?
- To formulate and submit the DoD budget to OMB
- To process financial transactions, make disbursements, and maintain accounting records for DoD (Correct answer)
- To conduct independent audits of defense appropriation accounts
- To apportion appropriated funds to military departments
Correct answer: To process financial transactions, make disbursements, and maintain accounting records for DoD
DFAS provides finance and accounting services including processing payments, maintaining general ledger accounts, and producing financial statements for DoD components.
Question 7: What does the term 'scoring' mean in the context of federal budget formulation?
- Rating program effectiveness on a scale used by OMB to prioritize funding
- How OMB or CBO assesses the budget authority and outlays associated with legislative proposals (Correct answer)
- Evaluating contractor performance to determine future contract awards
- Calculating return on investment for DoD capital programs
Correct answer: How OMB or CBO assesses the budget authority and outlays associated with legislative proposals
Scoring refers to the official accounting of the budget impact of proposed legislation or budget actions by OMB or the Congressional Budget Office.
CDFM Budget Formulation and Execution 4
In federal budgeting, what is the distinction between 'discretionary' and 'mandatory' spending?