What is the relationship between obligations and appropriations?

Appropriations are the legal authority to incur obligations for government spending. The relationship between obligations and appropriations is fundamental in ensuring that public funds are spent within the limits set by lawmakers. Each appropriation creates a ceiling on how much can be obligated for a specific purpose.

When obligations are incurred, they cannot surpass the amount that has been appropriated. This requirement is essential for fiscal responsibility as it prevents overspending and ensures that the government operates within its budget constraints. By adhering to the amounts allocated through appropriations, the integrity of financial management is maintained, and the potential for deficits is minimized.

This principle reinforces accountability in government spending, as obligations must be backed by available appropriations to ensure that funds are used appropriately and legally.