According to the bona fide needs rule, when must agencies obligate funds for supplies?

The bona fide needs rule is a fundamental principle in federal financial management that stipulates agencies must obligate funds to meet their actual needs within the time frame of their fiscal rules. Under this rule, funds should be obligated during the fiscal year in which the need for the supplies arises. This ensures that federal funds are used efficiently and appropriately within the timeframe for which they were appropriated.

When supply procurement is planned, agencies are required to assess their needs based on current demands. The allocation of funds in the same fiscal year aligns with the expectation that the supplies will be used within that period, reinforcing accountability and preventing the unnecessary carryover of funds to future years. This requirement helps to maintain the integrity of the budgeting process and supports sound fiscal management practices.

In contrast, options referring to current market price evaluation, advance fiscal years, or post-inventory assessments do not align with the recognized timing requirements of the bona fide needs rule. These alternatives do not emphasize the necessity for timely obligation of funds in alignment with actual fiscal year needs, which is central to the rule's purpose.