CDFM Budget Formulation and Execution 5 — Questions and Answers
Question 1: Which DoD financial management concept ensures that funds are used only for the purposes for which they were appropriated?
- Bona Fide Need Rule
- Purpose Statute (31 U.S.C. § 1301) (Correct answer)
- Availability of Appropriations
- Anti-Deficiency Act
Correct answer: Purpose Statute (31 U.S.C. § 1301)
The Purpose Statute (31 U.S.C. § 1301) requires that appropriations be applied only to the objects for which the appropriations were made.
Question 2: In DoD budget execution, what is an 'unfunded requirement' (UFR)?
- A program cost growth that exceeds the original cost estimate
- A validated operational need that lacks sufficient budget authority to be addressed (Correct answer)
- A congressional add-on to the President's budget not requested by DoD
- A contract modification that increases the scope beyond the original agreement
Correct answer: A validated operational need that lacks sufficient budget authority to be addressed
An UFR is a validated requirement for which funding was not included in the approved program and budget, often submitted during budget execution to compete for available resources.
Question 3: Under the Bona Fide Need Rule, when must O&M funds be obligated?
- In the fiscal year before the need arises to ensure timely delivery
- During the fiscal year in which the bona fide need exists (Correct answer)
- Within three years of the appropriation to allow for long-term contracts
- Before the end of the calendar year regardless of fiscal year boundaries
Correct answer: During the fiscal year in which the bona fide need exists
The Bona Fide Need Rule requires that annual appropriations only be used to meet genuine needs that arise during the fiscal year in which those funds are available.
Question 4: What is the primary purpose of the Future Years Defense Program (FYDP)?
- To identify all unfunded requirements beyond the current year budget
- To display the DoD resource plan and force structure for the current year plus four additional years (Correct answer)
- To project mandatory defense spending beyond congressional appropriations control
- To forecast civilian personnel requirements for the next decade
Correct answer: To display the DoD resource plan and force structure for the current year plus four additional years
The FYDP is an automated database that presents DoD's programs, forces, and resources for the budget year plus four additional years, linking strategy to resources.
Question 5: What is a 'below-threshold reprogramming' in DoD budget execution?
- A fund shift requiring prior approval from the Secretary of Defense
- A fund shift within an appropriation that does not require prior congressional approval due to small dollar amount (Correct answer)
- A transfer between appropriation accounts approved only by OMB
- A reprogramming action initiated at the sub-command level without service-level approval
Correct answer: A fund shift within an appropriation that does not require prior congressional approval due to small dollar amount
Below-threshold reprogrammings are fund realignments that fall under congressional notification thresholds and can be executed with only notification rather than prior approval.
Question 6: In DoD, what is the purpose of the Mid-Year Review (MYR) during budget execution?
- To submit a revised President's Budget request if economic conditions change significantly
- To assess execution against the approved budget and identify adjustments needed for the remainder of the year (Correct answer)
- To conduct an independent audit of the first half of budget year expenditures
- To formally request congressional approval for all reprogramming actions accumulated since October 1
Correct answer: To assess execution against the approved budget and identify adjustments needed for the remainder of the year
The MYR assesses how well programs are executing against their approved funding levels at the midpoint of the fiscal year and identifies areas requiring corrective action.
Question 7: Which financial management term describes the process by which OMB divides a Congressional appropriation into amounts available for obligation by time period or project?
- Allotment
- Apportionment (Correct answer)
- Allocation
- Authorization
Correct answer: Apportionment
Apportionment is the OMB action that divides appropriated amounts into categories by time period, programs, projects, or activities to prevent premature obligation of all funds.
CDFM Budget Formulation and Execution 5
Which DoD financial management concept ensures that funds are used only for the purposes for which they were appropriated?