Program Management Professional Program Financial Management 2

Question 1

When a program's Estimate at Completion (EAC) significantly exceeds the original Budget at Completion (BAC), the program manager should:

Accepted Answer

Analyze cost drivers, implement corrective actions, and communicate the revised forecast to stakeholders

Answer

A significant EAC overrun requires root cause analysis, corrective actions to improve cost performance, and transparent communication of the revised financial outlook.

Question 2

Program financial reporting to executives should typically focus on:

Accepted Answer

High-level cost performance, forecast accuracy, and key financial decisions needed

Answer

Executive financial reporting should be concise, highlighting overall cost performance trends, forecast accuracy, and decisions that require executive attention.

Question 3

In program financial management, 'funding authorization' refers to:

Accepted Answer

The formal approval of program funds aligned to program phases or milestones

Answer

Funding authorization is the formal release of program funds, often tied to phase completions or milestone achievements to maintain financial control.

Question 4

Cost aggregation in program management means:

Accepted Answer

Rolling up individual project costs to create a total program cost view

Answer

Cost aggregation consolidates individual component project costs into a unified program cost baseline, enabling program-level financial monitoring.

Question 5

A program manager discovers a component project is significantly over budget. What is the appropriate program-level response?

Accepted Answer

Assess the impact on the program budget baseline and benefits, then decide on corrective action or re-forecasting

Answer

Program-level response requires assessing the overrun's impact on the overall program budget and benefit delivery before determining appropriate corrective action.

Program Management Professional Practice Test

Program Management Professional Practice Test

Program Management Professional Program Financial Management 2