, CDFM Exam Study Guide
2026/2027 Questions and
Verified Answers With
Rationale
1. What article and section of the U.S. Constitution grants
Congress the "Power of the Purse"?
A. Article I, Section 8
B. Article I, Section 9
C. Article I, Section 7, Clause 1 and Article I, Section 9, Clause
7
D. Article II, Section 2
Correct Answer: C
Rationale: The U.S. Constitution establishes congressional
control over federal spending through the Origination Clause
and the Appropriations Clause, which states that no money shall
be drawn from the Treasury except via appropriations made by
law.
2. What federal statute prohibits federal employees from
obligating funds in advance of or exceeding
appropriations?
,A. The Economy Act
B. The Anti-Deficiency Act
C. The Prompt Payment Act
D. The Chief Financial Officers Act
Correct Answer: B
Rationale: The Anti-Deficiency Act is the primary fiscal law
statute that forbids federal personnel from creating financial
obligations or expending funds exceeding or preceding enacted
appropriations or apportionments.
3. During which phase of the federal budget lifecycle does the
Office of Management and Budget review agency budget
requests?
A. Budget Execution Phase
B. Budget Formulation Phase
C. Congressional Review Phase
D. Budget Audit Phase
Correct Answer: B
Rationale: Budget formulation occurs entirely within the
executive branch, where individual agencies compile budget
estimates and submit them to the Office of Management and
Budget for review prior to finalizing the President's Budget.
, 4. What type of budget authority permits federal agencies to
incur obligations that result in immediate or future outlays?
A. Appropriation
B. Borrowing Authority
C. Contract Authority
D. Monetary Waiver
Correct Answer: A
Rationale: An appropriation is the standard and most common
form of budget authority, granting statutory power to incur
obligations and make payments from the Treasury for
designated purposes.
5. Which act requires federal agencies to establish internal
accounting and administrative controls to safeguard assets?
A. The Federal Managers' Financial Integrity Act
B. The Inspector General Act
C. The Paperwork Reduction Act
D. The Economy Act
Correct Answer: A
Rationale: The Federal Managers' Financial Integrity Act
mandates that executive agencies evaluate and report annually
on the adequacy of their internal accounting and administrative
controls to prevent waste and fraud.
2026/2027 Questions and
Verified Answers With
Rationale
1. What article and section of the U.S. Constitution grants
Congress the "Power of the Purse"?
A. Article I, Section 8
B. Article I, Section 9
C. Article I, Section 7, Clause 1 and Article I, Section 9, Clause
7
D. Article II, Section 2
Correct Answer: C
Rationale: The U.S. Constitution establishes congressional
control over federal spending through the Origination Clause
and the Appropriations Clause, which states that no money shall
be drawn from the Treasury except via appropriations made by
law.
2. What federal statute prohibits federal employees from
obligating funds in advance of or exceeding
appropriations?
,A. The Economy Act
B. The Anti-Deficiency Act
C. The Prompt Payment Act
D. The Chief Financial Officers Act
Correct Answer: B
Rationale: The Anti-Deficiency Act is the primary fiscal law
statute that forbids federal personnel from creating financial
obligations or expending funds exceeding or preceding enacted
appropriations or apportionments.
3. During which phase of the federal budget lifecycle does the
Office of Management and Budget review agency budget
requests?
A. Budget Execution Phase
B. Budget Formulation Phase
C. Congressional Review Phase
D. Budget Audit Phase
Correct Answer: B
Rationale: Budget formulation occurs entirely within the
executive branch, where individual agencies compile budget
estimates and submit them to the Office of Management and
Budget for review prior to finalizing the President's Budget.
, 4. What type of budget authority permits federal agencies to
incur obligations that result in immediate or future outlays?
A. Appropriation
B. Borrowing Authority
C. Contract Authority
D. Monetary Waiver
Correct Answer: A
Rationale: An appropriation is the standard and most common
form of budget authority, granting statutory power to incur
obligations and make payments from the Treasury for
designated purposes.
5. Which act requires federal agencies to establish internal
accounting and administrative controls to safeguard assets?
A. The Federal Managers' Financial Integrity Act
B. The Inspector General Act
C. The Paperwork Reduction Act
D. The Economy Act
Correct Answer: A
Rationale: The Federal Managers' Financial Integrity Act
mandates that executive agencies evaluate and report annually
on the adequacy of their internal accounting and administrative
controls to prevent waste and fraud.
