Apportionment of Appropriated Funds
DAU GLOSSARY DEFINITION
A distribution made by the Office of Management and Budget (OMB) of amounts available for obligation in an appropriation or fund accounts of the Executive Branch. The distribution makes amounts available on the basis off specified time periods, programs, activities, projects, objects, or any combinations of these. The apportionment system is intended to achieve an effective and orderly use of funds, and the apportioned amount limits the obligations that may be incurred. An apportionment may be further subdivided by an agency into allocations, sub-allocations, allotments, and suballotments.
The primary purposes of the apportionment process are to (1) achieve the most effective and economical use of amounts made available, and (2) prevent agencies from obligating funds in a manner that would result in a deficiency or require a supplemental appropriation. Just as the Executive Branch (specifically, the Office of Management and Budget - OMB) consolidates all budget requests from all federal government activities and submits a total federal budget request to Congress for enactment of appropriations, the Executive Branch also initiates action to start the budget execution process. After the President signs the various appropriation bills into appropriation laws, two separate but related actions occur that start this broad process. The first action is the issuance of a Treasury Warrant, for which the Secretary of Treasury is responsible. The Secretary of Treasury is responsible for payment of all federal monies. By law (U.S. Code, Title 31, Section 3323), the Secretary of Treasury “may pay out those monies only against a warrant”. The U.S. Code further states the warrant shall be “authorized by law, signed by Secretary of Treasury and countersigned by the Comptroller General”. The warrant is based on the appropriation law by which a federal agency receives its budget authority and it sets up the Treasury account from which monies may be legally paid. A very loose analogy is that the warrant “opens the agency’s checking account”. The warrant provides the agency’s outlay authority. The second action is the actual apportionment process, for which the Director of OMB is responsible. Each federal agency (e.g., the Department of Defense) is required to submit a formal request to OMB for the apportionment (i.e., release) of budget authority provided by appropriation laws applicable to that agency. OMB is then to apportion (i.e., distribute) that budget authority (commonly referred to as funds) in a timely manner so the agency can actually start using the funds appropriated for the purposes specified in the appropriation law.
OMB apportions funds to federal government agencies and departments on a quarterly, annual or other periodic basis. A “periodic” distribution helps ensure accomplishment of the primary purposes of the apportionment process. Investment appropriations (e.g., procurement and military construction) are usually apportioned on an annual basis, while expense appropriations (e.g., operations & maintenance and military personnel) are usually apportioned quarterly. The RDT&E appropriations contain some elements of investment and some of expense; hence, most RDT&E is apportioned on an annual basis. To assist in the apportionment process, DoD provides OMB planned obligations and expenditures for the various Defense appropriation accounts (based on obligation and expenditure plans from the Services and Defense Agencies).