How does the carryover policy impact spending authority?

The carryover policy plays a crucial role in determining how spending authority is managed across fiscal periods. When a carryover policy allows for changes based on justifications, it provides the necessary flexibility for entities to adapt to changing circumstances while ensuring accountability.

For instance, if a specific project or program did not utilize its entire budget in a given fiscal year, the carryover policy may permit that unspent amount to be used in the following year, assuming there are valid justifications for its continued expenditure. This mechanism helps organizations manage their budget more effectively by allowing them to respond to ongoing project needs or unforeseen changes without completely starting from scratch in the new budget cycle.

In essence, the correct answer reflects the practicality and adaptability of financial management, where justifiable adjustments to spending authority are not only permitted but encouraged, facilitating smoother transitions between fiscal periods and enhancing operational efficiency.