CDFM Fiscal Law Principles 2

Question 1

Under the Antideficiency Act, which action is PROHIBITED when an appropriation is exhausted?

Accepted Answer

Continuing to obligate funds beyond the appropriated amount

Answer

The Antideficiency Act (31 U.S.C. § 1341) prohibits incurring obligations or expenditures in excess of amounts available in an appropriation.

Question 2

Which doctrine governs whether a particular expenditure is a proper charge against a specific appropriation?

Accepted Answer

Necessary Expense Doctrine

Answer

The Necessary Expense Doctrine (3-part test) determines whether an expenditure is a proper use of a given appropriation by evaluating purpose, time, and amount.

Question 3

A DoD agency uses O&M funds to purchase furniture worth $45,000 for a new administrative office. This likely violates which fiscal law principle?

Accepted Answer

The threshold for investment items requiring procurement appropriations

Answer

Items with a unit cost at or above the investment threshold ($250,000 for most DoD items) must be funded with procurement appropriations, not O&M.

Question 4

What is the primary legal authority that prohibits federal agencies from spending money for purposes not authorized by Congress?

Accepted Answer

31 U.S.C. § 1301 (Purpose Statute)

Answer

31 U.S.C. § 1301 states that appropriations shall be applied only to the objects for which they were made.

Question 5

A contracting officer signs a contract in September of FY2026 for services to be delivered entirely in FY2027. Which rule is most likely violated?

Accepted Answer

Bona Fide Needs Rule, because the need does not exist in the current fiscal year

Answer

The Bona Fide Needs Rule (31 U.S.C. § 1502) requires that an appropriation only be used for the genuine needs of the fiscal year for which it was appropriated.

CDFM - Certified Defense Financial Manager Practice Test

CDFM - Certified Defense Financial Manager Practice Test

CDFM Fiscal Law Principles 2