A commitment is when an agency sets aside money for something it plans to buy or spend on later. It's not a legal promise to pay yet, just an internal note that says "we're probably going to use this money for this purpose, so don't spend it on something else." Sometimes this is called a reservation of funds.
Official Definition
According to the GAO's Federal Budget Glossary, a Commitment is defined as:
“An administrative reservation of allotted funds, or of other funds, in anticipation of their obligation. For federal proprietary accounting, a commitment may also manifest an intent to expend assets.”
470000 - Commitments - Programs Subject to Apportionment
Normal Balance: Credit Definition: This account is used to record the amount of allotment or lower-level authority committed in anticipation of obligation for programs subject to apportionment
472000 - Commitments - Programs Exempt From Apportionment
Normal Balance: Credit Definition: This account is used to record the amount of allotment or lower-level authority committed in anticipation of obligation for programs exempt from apportionment.
What This Means in Practice
In day-to-day federal work, commitments usually come up when you start the procurement process and reserve funds for a future purchase. Budget analysts often use them during funds certification
Simple Example
Here's a typical scenario:
Your agency identifies a need for new equipment. Before issuing a purchase order (which creates an obligation), you might record a commitment to reserve those funds. This prevents another office from obligating that same money and ensures you have adequate budget authority when you're ready to move forward.
The commitment doesn't create a legal liability to pay. It's purely an internal control mechanism. Once you issue the purchase order or sign the contract, you then record an obligation and typically reduce or eliminate the commitment.
Common Mistakes or Confusion
Commitment vs. Obligation
Commitment: An administrative reservation with no legal liability
Obligation: A legally binding action that requires the government to pay now or later.
Not all agencies use commitments. Some proceed directly to obligation.
Where You’ll See This Term Used
You’ll most commonly see commitments in internal budget execution/funds-control reports and in systems that do funds certification (and in the USSGL trial balance). You may also see the term discussed in budget execution guidance (for example, OMB A-11) in the context of funds control.
