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HHS Reference Tool for Contract Funding, Formation and Appropriations Law Compliance

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Appropriation Types

Congress finances federal programs and activities by providing "budget authority." Budget authority is a general term referring to various forms of authority provided by law to enter into financial obligations that will result in immediate or future outlays of government funds. Appropriations are the most common form of budget authority.

The term "appropriation" may be defined as an authorization by an act of Congress that permits federal agencies to incur obligations and to make payments from the Treasury for specified purposes. Appropriations do not represent cash actually set aside in the Treasury. They represent legal authority granted by Congress to incur obligations and to make disbursements for the purposes, during the time periods, and up to the amount limitations specified in the appropriation acts.

Classified on the basis of duration, there are three types of appropriations:

  1. Annual
  2. Multiple-Year
  3. No-Year

In addition to the above appropriation types, Congress passes continuing resolutions to provide budget authority to keep existing federal programs functioning after the expiration of previous budget authority and until regular appropriation acts can be enacted.