What is the correct flow of funds after the Appropriations bill is signed into law?

• A. Appropriation -> Allotment -> Apportionment -> Commitment -> Obligation -> Outlay
• B. Appropriation -> Apportionment -> Allotment -> Commitment -> Obligation -> Outlay
• C. Apportionment -> Appropriation -> Allotment -> Commitment -> Obligation -> Outlay
• D. Commitment -> Obligation -> Outlay -> Appropriation -> Apportionment -> Allotment

Answer: (B)

Flow of funds starts with the appropriation, which gives the legal authority to spend. After that, apportionment divides that authority into manageable time periods or programs, so spending can be paced and controlled. Next comes allotment, which distributes the apportionment to specific agencies and accounts, enabling closer budget control at the organizational level. Then funds are encumbered through a commitment to reserve them for a particular purpose, protecting the availability of those dollars for a specific obligation. Once a binding liability is incurred, an obligation is recorded. Finally, when cash is actually paid, the outlay occurs. This sequence—appropriation, apportionment, allotment, commitment, obligation, outlay—shows how budget authority is gradually released and executed. The other orders disrupt the proper flow, such as placing apportionment before appropriation, or encumbering before an obligation is established, or moving outlays ahead of obligations.