CDFM Defense Resource Management 5 — Questions and Answers
Question 1: What is the primary distinction between 'budget authority' and 'outlays' in federal financial management?
- Budget authority is provided by OMB; outlays are authorized by Congress
- Budget authority is the legal authority to obligate funds; outlays are the actual cash payments made (Correct answer)
- Outlays are always equal to budget authority in the same fiscal year
- Budget authority refers to supplemental funding; outlays refer to base appropriations
Correct answer: Budget authority is the legal authority to obligate funds; outlays are the actual cash payments made
Budget authority (BA) is the legal power to enter into obligations, while outlays represent actual cash disbursements that may occur in the same or future fiscal years after obligations are incurred.
Question 2: Under the DoD financial management framework, what are 'unobligated balances' subject to after an appropriation's period of availability expires?
- They are immediately transferred to the working capital fund
- They enter a five-year expired account period during which they can still pay previously incurred obligations but cannot fund new ones (Correct answer)
- They revert to the Treasury on the last day of the fiscal year
- They are automatically rescinded by OMB at year-end
Correct answer: They enter a five-year expired account period during which they can still pay previously incurred obligations but cannot fund new ones
After an appropriation expires, unobligated balances enter a five-year expired account where they remain available to liquidate valid prior obligations but cannot support new obligations.
Question 3: Which of the following is a key feature of 'multiyear procurement' authority in defense acquisitions?
- It allows DoD to obligate funds from multiple fiscal years in a single contract action without annual appropriations
- It authorizes contracts for more than one year but requires appropriated funding annually, with cancellation ceilings limiting termination liability (Correct answer)
- It permanently exempts weapon system costs from Nunn-McCurdy unit cost reporting
- It requires that all production options be exercised within the original period of performance
Correct answer: It authorizes contracts for more than one year but requires appropriated funding annually, with cancellation ceilings limiting termination liability
Multiyear procurement allows DoD to contract for multiple years of production while still requiring annual appropriations, but it includes a cancellation ceiling that limits the government's termination liability.
Question 4: In the context of DoD resource management, what is a 'program budget decision' (PBD)?
- A congressional committee markup of the defense authorization bill
- An OSD document that directs changes to service or agency programs during the program and budget review process (Correct answer)
- A DFAS notification of a budget execution variance requiring corrective action
- A CAPE cost estimate that differs from the service-sponsored estimate
Correct answer: An OSD document that directs changes to service or agency programs during the program and budget review process
A PBD is issued by OSD during the program and budget review to direct adjustments to service or agency programs, reflecting decisions made by senior DoD leadership.
Question 5: What is the primary purpose of the Defense Acquisition Board (DAB) in the resource management context?
- To audit the financial statements of major defense contractors
- To review and recommend milestone decisions for major defense acquisition programs, ensuring cost and schedule are aligned with resources (Correct answer)
- To approve all reprogramming actions above established thresholds
- To oversee the execution of overseas contingency operations funding
Correct answer: To review and recommend milestone decisions for major defense acquisition programs, ensuring cost and schedule are aligned with resources
The DAB reviews major defense acquisition programs at key milestones, ensuring that program requirements, cost estimates, and funding plans are realistic and aligned before committing additional resources.
Question 6: Which principle governs the use of Operation and Maintenance (O&M) funds for minor construction projects in the DoD?
- O&M funds may be used for any construction project costing less than $2 million
- O&M funds may be used for unspecified minor military construction up to the statutory threshold, typically around $1–2 million per project (Correct answer)
- O&M funds are prohibited from any construction use and must use MILCON appropriations
- O&M funds can be pooled across multiple years to fund construction projects exceeding $750,000
Correct answer: O&M funds may be used for unspecified minor military construction up to the statutory threshold, typically around $1–2 million per project
DoD policy and statute allow O&M funds to be used for minor construction projects below a statutory threshold (generally around $1–2 million), above which Military Construction (MILCON) appropriations are required.
Question 7: What does the term 'crosswalk' mean in defense budget and resource management?
- A formal agreement between two combatant commands to share budget resources
- A mapping that translates programs and resources between different classification structures, such as from appropriation accounts to mission areas or FYDP program elements (Correct answer)
- An OMB directive to shift funds from defense to non-defense accounts
- A congressional floor amendment that adds unfunded requirements to the defense budget
Correct answer: A mapping that translates programs and resources between different classification structures, such as from appropriation accounts to mission areas or FYDP program elements
A crosswalk is an analytical tool that maps resource data across different organizational or functional structures, enabling comparisons between appropriation accounts, program elements, and mission categories.
CDFM Defense Resource Management 5
What is the primary distinction between 'budget authority' and 'outlays' in federal financial management?