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 of the highway program. Some of the more important points are:
 * Apportionments and allocations are now available for obligation for a total of 4 years. Interstate apportionments are made 1 year in advance of the beginning of the fiscal year for which they are authorized and remain available until 2 years after that fiscal year ends. Non- Interstate apportionments are made on the first day of the fiscal year for which authorized and remain available until 3 years after that fiscal year ends.
 * In the future there will be greater flexibility in the expenditure of highway funds, such as substitution of programs and transfer of funds.
 * Some highway programs were consolidated, but instead of reducing the number of separate fund- ing accounts, several new ones were added.

In summary, the legal and financial management cycle can be considered to begin with the authorizing legislation. These acts set the upper limits on Federal commitments which can be incurred for Federal-aid highways. Deductions from the authorized levels are then made for administration of the program and urban transportation planning, with additional amounts earmarked for other planning and research activities. These normally amount to about 4 or 5 percent of the authorizations.

The remaining amounts are then apportioned or allocated (divided) among the States. Apportionments and allocations are considered “new obligational authority” and, when added to the unobligated balances of previous apportionments and allocations, constitute the total amount of obligational authority available to the States. This is not money, but authority to incur obligations.

Apportionments are available for obligation for a total period of 4 years.

The States may obligate funds subject to the availability of apportionments and allocations and to any limitations on obligations which may have been imposed for that fiscal year. These limitations regulate the rate of obligations by imposing a maximum amount on obligations which can be incurred during a given fiscal year.

Once funds are obligated and a project is underway, progress payments may be made to the States for completed work. This liquidating cash is appropriated annually by Congress and is derived from revenues accruing to the Highway Trust Fund.

The final step in the legal and financial administration of the Federal-aid highway program is reimbursement to the States for the Federal share of the cost of approved projects or programs.

Initially the States, or their local governmental subdivisions, finance the costs of Federal-aid projects. After authorization by the Division Administrator, work can proceed on a Federal-aid project. Once the Project Agreement has been executed between the State and FHWA, the State can submit progress vouchers claiming reimbursement for the Federal share of costs of work satisfactorily completed and for materials stockpiled for use on the project.



After the project has been completed and final FHWA acceptance has been issued by the Division Administrator, the State submits a final voucher for the project. The final voucher summarizes the final 231