PMP · Question #942
A project manager is leading a multiyear project. Near the end of the first year, the project manager checks to see if the whole budget allocated for the year will be used. Some features utilizing…
The correct answer is D. Provide an update to the financial department regarding the status of the time line of the project. When project features funded for the current year will not be completed by year-end, leading to unspent budget, the project manager should inform the financial department about the project's timeline status.
Question
A project manager is leading a multiyear project. Near the end of the first year, the project manager checks to see if the whole budget allocated for the year will be used. Some features utilizing this year's budget were added later in the year as change requests, but these features will not be ready by the end of the first year. What should the project manager do?
Options
- AAsk the team to test partially ready features and check if payment can be authorized with a
- BAuthorize payment for the features ready this year and for the features planned for the following
- CApproach the product owner and the financial department to create a new nonbinding contract
- DProvide an update to the financial department regarding the status of the time line of the project.
How the community answered
(17 responses)- B12% (2)
- C6% (1)
- D82% (14)
Why each option
When project features funded for the current year will not be completed by year-end, leading to unspent budget, the project manager should inform the financial department about the project's timeline status.
Authorizing payment for partially ready features is poor financial practice and could lead to paying for incomplete work without actual value delivery or proper acceptance.
Authorizing payment for features planned for the following year using the current year's budget is financially imprudent and likely violates accounting principles, as the work has not yet been performed or delivered.
Creating a non-binding contract for future work doesn't directly address the immediate issue of the current year's budget not being fully utilized due to delays and may unnecessarily complicate financial reporting or commitments.
Transparency and proactive communication with the financial department are crucial when project timelines impact budget utilization, especially regarding funds that may not be spent as originally planned by the year's end. This allows for proper financial forecasting and potential reallocation or carryover of funds.
Concept tested: Project financial communication and forecasting
Source: https://learn.microsoft.com/en-us/project/manage-financial-resources
Topics
Community Discussion
4
Ingrid P.Nov 28, 2025D is correct. The financial department needs visibility into the schedule shift so they can adjust their budget expectations, and this is exactly the kind of stakeholder communication that belongs on a flashcard. Pair it with a recall card on earned value versus planned value if you want to reinforce why schedule status matters to the budget.
Lena V.Dec 17, 2025D is correct. The change requests shifted the timeline so the PM needs to inform finance about the revised schedule rather than trying to push payments through for incomplete work. Anyone know whether the exam expects a formal change request update to finance or if a status communication is sufficient in this scenario?
Mei-Ling H.Dec 5, 2025Confirmed D on my exam attempt last month. The key word in the stem is "checks" which points to monitoring and communicating status rather than taking payment action. Option A and B both assume the PM can authorize payment, which makes me wonder: is payment authorization typically outside the PM authority on PMP questions, or does it depend on the contract type?
Dervla O.Nov 22, 2025D. Notify finance so funds can roll forward correctly. Is this a fixed-price or cost-reimbursable setup?