The appropriation to the State Library System (fiscal year starts July 1) for fi

Question

The appropriation to the State Library System (fiscal year starts July 1) for fiscal 2012 was $15,000,000. On December 31, 2011, its budget reports showed expenditures of $7,500,000 and encumbrances outstanding of $500,000. Quarterly allotments were as follows: Q1—$3,750,000; Q2—$4,500,000; Q3—$3,750,000; and Q4—$3,000,000. What was the status of system operations at that point?

a. Operation consistent with plan; half the year elapsed and half the money spent.

b. Over plan by $250,000.

c. Under plan by $750,000.

d. Under plan by $250,000.

Explanation / Answer

fiscal year starts from July 1st (July ,August and September) that is Q1 amount alloted of $3,750,000

Year Ends on December 31 st (October , November and December) that is Q2 amount alloted of $4,500,000

Quarterly amount to be considered = Q1 + Q2

= 3750000 + 4500000

= $8250000

Now, on December 31, Budget reports showed Expenditure of $7,500,000 and encumbrances of $500,000

Remaining Balance as of December,31 (after adjusting expenditure against Quarterly's alloted amount) = $8250000 - $7500000 = $750000

Taking Encumbrances into consideration, the status of Library system spending as of December 31

= $750000 - $500000

= $250000 Under plan or [short of $250000]

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