Which statement about ADA and obligation is correct?

Which statement about ADA and obligation is correct?

• A. An over-obligation can result in an ADA
• B. An over-obligation cannot result in ADA
• C. Only under-obligation results in ADA
• D. ADA is unrelated to obligations

Answer: (A)

The key idea is how the Antideficiency Act (ADA) governs spending commitments. An obligation is a binding commitment to spend money. The ADA prohibits incurring obligations (and expenditures) that exceed the funds available or the authorized budget authority. So when you have an over-obligation—committing to spend more than what is currently available—you’re directly running afoul of the ADA. Under-obligation doesn’t violate the ADA because it involves spending less than the available authority, not exceeding it. The ADA is specifically about keeping obligations within the approved funds, not about being unrelated to obligations. That’s why the statement that an over-obligation can result in an ADA is the correct one.

The key idea is how the Antideficiency Act (ADA) governs spending commitments. An obligation is a binding commitment to spend money. The ADA prohibits incurring obligations (and expenditures) that exceed the funds available or the authorized budget authority. So when you have an over-obligation—committing to spend more than what is currently available—you’re directly running afoul of the ADA. Under-obligation doesn’t violate the ADA because it involves spending less than the available authority, not exceeding it. The ADA is specifically about keeping obligations within the approved funds, not about being unrelated to obligations. That’s why the statement that an over-obligation can result in an ADA is the correct one.