Which option correctly states the Bona fide needs rule?

• A. Funds are available for any purpose during the fiscal year
• B. Funds are available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period
• C. Funds may be diverted to other accounts with manager approval
• D. Funds must be used within 30 days of appropriation

Answer: (B)

The Bona fide needs rule centers on using appropriated funds only for actual, current needs within the period of availability. The correct statement reflects that funds may be used to pay for expenses properly incurred during the period of availability or to complete contracts properly made within that period. This ensures the money funds real, legitimate needs that exist now and were legally obligated within the allowed time frame; it also allows finishing contracts that were entered into during that period, even if some work continues after the period ends. It prevents funding future year needs or speculative obligations outside the current window.

The other ideas don’t fit because they imply unrestricted use within the year, allow shifting funds to other accounts with only managerial approval, or impose a fixed 30-day deadline. None of those align with the idea that obligations must be for bona fide needs and tied to the period of availability.