If a budget shows negative funds available for obligation, which outcome occurs?

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Prepare for the 4A051 CDC URE Exam. Test your knowledge with multiple-choice questions featuring detailed explanations and hints. Score your best and excel in your exam!

Multiple Choice

If a budget shows negative funds available for obligation, which outcome occurs?

Explanation:
When funds are available for obligation, there is remaining budget authority to enter into new financial commitments. If a budget shows negative funds available for obligation, it means the total obligations already recorded exceed the budget authority that's been approved. In other words, the government has over-obligated — it has committed more funds than are actually available. The fix involves corrective actions like deobligating or canceling obligations or seeking additional budget authority, but the key idea is that spending authority has been exceeded.

When funds are available for obligation, there is remaining budget authority to enter into new financial commitments. If a budget shows negative funds available for obligation, it means the total obligations already recorded exceed the budget authority that's been approved. In other words, the government has over-obligated — it has committed more funds than are actually available. The fix involves corrective actions like deobligating or canceling obligations or seeking additional budget authority, but the key idea is that spending authority has been exceeded.

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