In project controls, how do a forecast and a budget differ?

In project controls, how do a forecast and a budget differ?

• A. A budget is an approved financial plan; a forecast updates expected results based on actuals to manage risk and guide decisions.
• B. A forecast is an approved plan; a budget is updated with actual results.
• C. The budget and forecast are the same and interchangeable.
• D. A forecast replaces the budget whenever the project scope changes.

Answer: (A)

Budgeting provides the approved financial plan that sets the baseline for costs, resources, and performance targets. A forecast is a rolling projection updated with actuals to show what the final cost and completion date are likely to be, based on current performance. Because the forecast reflects current trends and actual data, it helps manage risk and guide decisions without changing the approved baseline. A forecast does not replace the budget; changes in scope or assumptions may trigger updates to both, but they are not interchangeable. When actuals diverge from plan, the forecast is updated to reflect revised expectations and inform corrective actions.

Budgeting provides the approved financial plan that sets the baseline for costs, resources, and performance targets. A forecast is a rolling projection updated with actuals to show what the final cost and completion date are likely to be, based on current performance. Because the forecast reflects current trends and actual data, it helps manage risk and guide decisions without changing the approved baseline. A forecast does not replace the budget; changes in scope or assumptions may trigger updates to both, but they are not interchangeable. When actuals diverge from plan, the forecast is updated to reflect revised expectations and inform corrective actions.