BUDGET FORMULATION QUESTIONS AND ANSWERS | BUDGET FORMULATION
STUDY GUIDE & PRACTICE TEST 2026/2027
The Strategic Planning Guidance provides guidance and priorities for military forces, modernization,
readiness and sustainability, and supporting business processes and infrastructure activities. - ✔✔False
The Current Year (CY) is currently being executed or has been executed, depending on the obligational
availability of the appropriation. - ✔✔False
The OASN (FM&C) FMB is the coordinator of the Budget Formulation process for the Secretary of the
Navy (SECNAV). - ✔✔True
It would be appropriate to budget for the procurement of a ship in the Operation and Maintenance,
Navy appropriation. - ✔✔False
The term "appropriation cognizance" refers to the fact that each appropriation has legal paramenters
provided in an appropriations act. - ✔✔True
Per full funding policy, if a future-year appropriation is required for delivery of the end items, the effort is
fully funded. - ✔✔False
Who is responsible for the preparation and submission of the budget in the budgeting element? -
✔✔The Comptroller community
Which office will price out the programs in the proposed POM for the DON? - ✔✔Budget Submitting
Office (BSO)
When does the DON budget review typically occur? - ✔✔Between July and August
Which of the following appropriation accounts is financed on an incremental basis? - ✔✔RDT&E
The indices may be adjusted only twice a year during the budget formulation cycle based on the
economic indicators or other relevant information. - ✔✔False
In most programs, unit costs increase with increases in quantities. - ✔✔False
Joint programs are usually managed by both military departments involved in the program. - ✔✔False
It is possible to move the Prior Year (PY) savings to another program (within reprogramming rules) to
reflect the lower PY baseline. - ✔✔True
Which of the following is not one of the budget pricing principles? - ✔✔Forward funding
, Cost estimating methods and tools are usually reserved for which of the following programs? -
✔✔Acquisition or Investment
Which of the following is not a major budget review technique? - ✔✔Priced contract options
The forward funding technique is applicable to which of the following appropriations? - ✔✔Multiple-
year appropriations
The budgeting ahead of need technique is predominantly used when reviewing which of the following
programs? - ✔✔Acquisition
What is the program growth amount in FY 2022 if the FY 2021 funded amount is $1,000, the price
growth from 2021 to 2022 is 3% and the FY 2022 funding level is $1,040? - ✔✔$10
Program elements (PEs) consist of eight digits followed by a letter designator indicating the applicable
military service. - ✔✔False
All budgets are formulated and reviewed using PEs. - ✔✔False
The R&D products should be funded only for two years, - ✔✔False
The R-5 (Termination Liability in Major Acquisition Program RDT&E Contracts) budget exhibit is required
only for acquisition category (or ACAT) 1 programs. - ✔✔True
While budgeted in the Military Construction (MILCON) budget, information on these projects is
forwarded to the Office of Management an Budget (OMB) for reference with the RDT&E budget. -
✔✔False
Which of the following is not a budget activity? - ✔✔Project Cost Analysis
Which of the following is not a budget exhibit? - ✔✔SDD System Development Demonstration
The R-2 and R-2a budget exhibits provide: - ✔✔a PE and project summary narrative justification
The R-4 and R-4a are useful in monitoring: - ✔✔Whether the program or project events are occurring
according to schedule.
Which of the following budget exhibits lists all RDT&E program elements for the BY under consideration?
- ✔✔R-1
Ship and aircraft depot maintenance costs would be budgeted in a procurement appropriation. -
✔✔False
Unit costs may fluctuate significantly from year to year, depending on whether any non-hardware-
related costs are included. It may be advisable to provide an explanatory footnote on the P-40 exhibit. -
✔✔True
STUDY GUIDE & PRACTICE TEST 2026/2027
The Strategic Planning Guidance provides guidance and priorities for military forces, modernization,
readiness and sustainability, and supporting business processes and infrastructure activities. - ✔✔False
The Current Year (CY) is currently being executed or has been executed, depending on the obligational
availability of the appropriation. - ✔✔False
The OASN (FM&C) FMB is the coordinator of the Budget Formulation process for the Secretary of the
Navy (SECNAV). - ✔✔True
It would be appropriate to budget for the procurement of a ship in the Operation and Maintenance,
Navy appropriation. - ✔✔False
The term "appropriation cognizance" refers to the fact that each appropriation has legal paramenters
provided in an appropriations act. - ✔✔True
Per full funding policy, if a future-year appropriation is required for delivery of the end items, the effort is
fully funded. - ✔✔False
Who is responsible for the preparation and submission of the budget in the budgeting element? -
✔✔The Comptroller community
Which office will price out the programs in the proposed POM for the DON? - ✔✔Budget Submitting
Office (BSO)
When does the DON budget review typically occur? - ✔✔Between July and August
Which of the following appropriation accounts is financed on an incremental basis? - ✔✔RDT&E
The indices may be adjusted only twice a year during the budget formulation cycle based on the
economic indicators or other relevant information. - ✔✔False
In most programs, unit costs increase with increases in quantities. - ✔✔False
Joint programs are usually managed by both military departments involved in the program. - ✔✔False
It is possible to move the Prior Year (PY) savings to another program (within reprogramming rules) to
reflect the lower PY baseline. - ✔✔True
Which of the following is not one of the budget pricing principles? - ✔✔Forward funding
, Cost estimating methods and tools are usually reserved for which of the following programs? -
✔✔Acquisition or Investment
Which of the following is not a major budget review technique? - ✔✔Priced contract options
The forward funding technique is applicable to which of the following appropriations? - ✔✔Multiple-
year appropriations
The budgeting ahead of need technique is predominantly used when reviewing which of the following
programs? - ✔✔Acquisition
What is the program growth amount in FY 2022 if the FY 2021 funded amount is $1,000, the price
growth from 2021 to 2022 is 3% and the FY 2022 funding level is $1,040? - ✔✔$10
Program elements (PEs) consist of eight digits followed by a letter designator indicating the applicable
military service. - ✔✔False
All budgets are formulated and reviewed using PEs. - ✔✔False
The R&D products should be funded only for two years, - ✔✔False
The R-5 (Termination Liability in Major Acquisition Program RDT&E Contracts) budget exhibit is required
only for acquisition category (or ACAT) 1 programs. - ✔✔True
While budgeted in the Military Construction (MILCON) budget, information on these projects is
forwarded to the Office of Management an Budget (OMB) for reference with the RDT&E budget. -
✔✔False
Which of the following is not a budget activity? - ✔✔Project Cost Analysis
Which of the following is not a budget exhibit? - ✔✔SDD System Development Demonstration
The R-2 and R-2a budget exhibits provide: - ✔✔a PE and project summary narrative justification
The R-4 and R-4a are useful in monitoring: - ✔✔Whether the program or project events are occurring
according to schedule.
Which of the following budget exhibits lists all RDT&E program elements for the BY under consideration?
- ✔✔R-1
Ship and aircraft depot maintenance costs would be budgeted in a procurement appropriation. -
✔✔False
Unit costs may fluctuate significantly from year to year, depending on whether any non-hardware-
related costs are included. It may be advisable to provide an explanatory footnote on the P-40 exhibit. -
✔✔True
