CDFM Defense Resource Management 4 — Questions and Answers
Question 1: Which of the following best describes 'working capital funds' (WCF) in the DoD financial management context?
- Supplemental appropriations used exclusively for overseas contingency operations
- Revolving funds that finance business-like operations by charging customers for goods and services provided (Correct answer)
- Emergency reserve funds held by each military department for unforeseen requirements
- Lump-sum appropriations that remain available until expended for major construction
Correct answer: Revolving funds that finance business-like operations by charging customers for goods and services provided
DoD Working Capital Funds are revolving funds that operate on a break-even basis, recovering costs from customer orders so that funding recycles without annual appropriations.
Question 2: Under the Goldwater-Nichols Act, how did resource management authority shift within the DoD?
- Resource authority moved from OSD to the individual military services
- The Chairman of the Joint Chiefs was given veto authority over the defense budget
- Joint duty and combatant command authority were strengthened, increasing the influence of joint requirements on resource decisions (Correct answer)
- The defense budget was consolidated into a single appropriation managed by the Joint Chiefs
Correct answer: Joint duty and combatant command authority were strengthened, increasing the influence of joint requirements on resource decisions
Goldwater-Nichols (1986) strengthened combatant commanders and the Chairman of the Joint Chiefs, shifting resource emphasis toward joint warfighting requirements over individual service priorities.
Question 3: When a defense program manager receives an 'issue paper' during the programming phase, what does this document typically represent?
- A congressional mandate to fund a specific program at a higher level
- A formal challenge to a service's POM submission identifying resource shortfalls or excesses (Correct answer)
- An audit finding requiring corrective action within 30 days
- A notification that a program has breached a Nunn-McCurdy cost threshold
Correct answer: A formal challenge to a service's POM submission identifying resource shortfalls or excesses
Issue papers (also called program issue papers or PIPs) are used by OSD and the Joint Staff to formally challenge or question service POM submissions during program review.
Question 4: What does 'full funding' policy require for major defense acquisition programs?
- All program costs across the entire life cycle must be included in the first year's budget
- Total procurement cost of a complete, usable end item must be funded in the year of obligation (Correct answer)
- Research and development funds must be expended before procurement funds are requested
- Programs must secure private financing before receiving appropriated funding
Correct answer: Total procurement cost of a complete, usable end item must be funded in the year of obligation
The full funding policy requires that procurement appropriations include the total cost of a complete and usable item, preventing incremental or partial funding of production units.
Question 5: In defense resource management, what is 'budget execution' primarily concerned with?
- Developing the five-year program plan submitted to Congress
- Managing and controlling the actual obligation and expenditure of appropriated funds during the fiscal year (Correct answer)
- Negotiating with Congress on authorization and appropriation levels
- Conducting long-range strategic planning for force structure
Correct answer: Managing and controlling the actual obligation and expenditure of appropriated funds during the fiscal year
Budget execution covers the period during which appropriated funds are actually obligated and expended, requiring managers to track spending against authorizations and report variances.
Question 6: Which report is the primary tool used by Congress to monitor DoD budget execution on a quarterly basis?
- The President's Budget Appendix
- The SF-133 Report on Budget Execution and Budgetary Resources (Correct answer)
- The DD Form 1414 Base for Reprogramming Actions
- The FYDP Summary Tables
Correct answer: The SF-133 Report on Budget Execution and Budgetary Resources
The SF-133 is the standard OMB/Treasury report on budget execution that tracks obligations, outlays, and unobligated balances, providing Congress and OMB with execution visibility.
Question 7: What is the purpose of the 'Nunn-McCurdy Act' in defense resource management?
- It requires annual independent audits of all defense working capital funds
- It mandates congressional notification and potential program termination when a major defense acquisition program exceeds specified unit cost growth thresholds (Correct answer)
- It establishes minimum reserve requirements for contingency operations funding
- It requires DoD to submit multiyear procurement proposals for all major weapon systems
Correct answer: It mandates congressional notification and potential program termination when a major defense acquisition program exceeds specified unit cost growth thresholds
The Nunn-McCurdy Act (10 U.S.C. § 2433) requires DoD to notify Congress and potentially restructure or terminate programs that breach cost growth thresholds of 15% (significant) or 25% (critical).
CDFM Defense Resource Management 4
Which of the following best describes 'working capital funds' (WCF) in the DoD financial management context?