Isolating budget components so that one item does not affect the approval of other items is called:

• A. Budget segmentation
• B. Cost separation
• C. Line-item isolation
• D. Compartmentation

Answer: (D)

Compartmentation means dividing the budget into separate, independent sections so that approving one item doesn’t hinge on or delay others. This approach keeps each line item or component reviewable on its own merit, improving control, accountability, and the speed of approvals. While budget segmentation or cost separation describe breaking the budget into parts for planning or accounting purposes, they don’t specifically capture the idea of independent approval for each item. Line-item isolation conveys a similar idea but isn’t the standard term used; compartmentation is the established concept in FM budgeting for isolating components.