The Program Management Office creates a(n) ______________ plan for each fiscal year of funding that is available for new obligations and a(n) ______________ plan for each fiscal year of funding that has not been completely expended.

The Program Management Office creates a(n) ______________ plan for each fiscal year of funding that is available for new obligations and a(n) ______________ plan for each fiscal year of funding that has not been completely expended.

• A. Expenditure / Obligation
• B. Obligation / expenditure
• C. Acquisition / Disbursement
• D. Budget / Expenditure

Answer: (B)

Understanding the distinction between commitments and actual payments in budgeting is key. When funds are available for new commitments, the PMO creates an obligation plan to outline which contracts or orders will be entered into, ensuring those commitments stay within the appropriation and timing limits. For funds that have not been completely expended, the PMO uses an expenditure plan to schedule and manage the actual cash outlays, tracking disbursements and making sure the remaining funds are spent as intended. This separation reflects how money moves from being committed to being paid, and it explains why the correct pairing is obligation for new commitments and expenditure for remaining disbursements.

Understanding the distinction between commitments and actual payments in budgeting is key. When funds are available for new commitments, the PMO creates an obligation plan to outline which contracts or orders will be entered into, ensuring those commitments stay within the appropriation and timing limits. For funds that have not been completely expended, the PMO uses an expenditure plan to schedule and manage the actual cash outlays, tracking disbursements and making sure the remaining funds are spent as intended. This separation reflects how money moves from being committed to being paid, and it explains why the correct pairing is obligation for new commitments and expenditure for remaining disbursements.