Which of the following best describes how a funding variance is resolved?

• A. Difference between forecasted revenue and actual revenue; resolved by budget cuts.
• B. Difference between budgeted and actual funds; resolved via schedule changes.
• C. Difference between forecasted revenue and actual revenue; resolved by budget cuts.
• D. Difference between budgeted and actual funds; resolved via transfers, reprogramming, or reallocation.

Answer: (D)

Funding variance arises when the amount budgeted for a program differs from the actual funds available. The way to resolve this is to rebalance the resources within the current financial plan by moving money where it’s needed: transfers between accounts, reprogramming funds to different purposes, or reallocating funds to higher-priority needs. This approach keeps the overall budget intact while aligning spending with what resources are actually on hand.

Other options don’t fit as well because they describe differences between forecasted and actual revenue or rely on actions like scheduling changes or broad budget cuts, which don’t directly address realigning existing funds to match the budgeted framework.