Found this in another post by a forum member.
http://dosfan.lib.uic.edu/ERC/visa_bulletin/2000-07bulletin.html
THE OPERATION OF THE IMMIGRANT NUMERICAL CONTROL SYSTEM
The Department of State is responsible for administering the provisions of the Immigration and Nationality Act (INA) relating to the numerical limitations on immigrant visa issuances. The following information provides a brief explanation of the operation of the immigrant number allotment and control system.
DEFINITION OF SOME TERMS
Allotment
The allocation of an immigrant number to a consular office or to INS. This number may be used for visa issuance or adjustment of status, or may be returned unused to the Visa Office (VO) for reincorporating into the pool of numbers available for later allocation during the fiscal year.
Foreign State Chargeability
Ordinarily an immigrant is chargeable for visa purposes to the numerical limitation for the foreign state or dependent area in which the immigrant's place of birth is located. Exceptions are provided for a child (unmarried and under 21 years of age) or spouse accompanying or following to join a principal to prevent the separation of family members, as well as for an applicant born in the U.S. or in a foreign state of which neither parent was a native or resident. Alternate chargeability is desirable when the visa cut-off date for the foreign state of a parent or spouse is more advantageous than that of the applicant's foreign state.
Priority Date
The priority date of a preference visa applicant is the filing date of the petition that accorded preference status.
Documentarily Qualified
The applicant has informed the consular processing office that they have obtained (after being requested to do so) all of the documents which are required to meet the formal visa application requirements.
HOW THE SYSTEM OPERATES
At the beginning of each month, the Visa Office receives a report from each immigrant visa processing post listing totals of documentarily qualified immigrant visa applicants in categories subject to numerical limitation.
Cases are grouped by foreign state chargeability/preference/priority date. No names are reported. During the first week of each month, this documentarily qualified demand is tabulated.
VO subdivides the annual preference and foreign state limitations which are specified by the Immigration and Nationality Act (INA) into twelve monthly allotments. The totals of documentarily qualified applicants reported to VO, and the expected INS demand for numbers, are compared each month with the numbers available for the next regular allotment. This allows for the determination of the monthly cut-off dates, and the allotment of numbers for reported applicants who have priority dates within the newly established cut-off dates.
If there are sufficient numbers in a particular category to satisfy all reported documentarily qualified demand, the category is considered "current."
Whenever the total of documentarily qualified applicants in a category exceeds the supply of numbers available for allotment for the particular month, the category is considered to be "oversubscribed" and a visa availability cut-off date is established. The cut-off date is the priority date of the first documentarily qualified applicant who could not be accommodated for a visa number. Only persons with a priority date earlier than a cut-off date are entitled to allotment of a visa number. The cut-off dates are ordinarily the 1st, 8th, 15th, and 22nd of a month, since VO groups demand for numbers under these dates. (Priority dates of the first through seventh of a month are grouped under the 1st, the eighth through the fourteenth under the 8th, etc.)
VO attempts to establish the cut-off dates for the following month on or about the 8th of each month. The dates, along with visa allotments for use during that month, are immediately transmitted to consular posts, and also published in the Visa Bulletin.
BACKGROUND INFORMATION ON THE SYSTEM AND CLARIFICATION OF SOME FREQUENTLY MISUNDERSTOOD POINTS
Applicants entitled to immigrant status become documentarily qualified at their own initiative and convenience. By no means has every applicant with a priority date earlier than a prevailing cut-off date been processed for final visa action. On the contrary, visa allotments are made only on the basis of the total applicants reported documentarily qualified each month, and the expected INS number use. Demand for visa numbers can fluctuate from one month to another, with the inevitable impact on cut-off dates.
If an applicant is reported documentarily qualified but allocation of a visa number is not possible because of a visa availability cut-off date, the demand is recorded at VO and an allocation is made as soon as the applicable cut-off date advances beyond the applicant's priority date. Visa numbers are always allotted for all documentarily qualified applicants with a priority date before the relevant cut-off date, as long as the case had been reported to VO in time to be included in the monthly calculation of visa availability. There is no exception to this principle.
Allocations outside the regular monthly cycle are possible only in emergency or exceptional cases, and only at the request of the office processing the case. Note that should retrogression of a cut-off date be announced, VO can honor extraordinary requests for additional numbers only if the applicant's priority date is earlier than the retrogressed cut-off date.
Not all numbers allocated are actually used for visa issuance; some are returned to VO and are reincorporated into the pool of numbers available for later allocation during the fiscal year. The rate of return of unused numbers may fluctuate from month to month, just as demand may fluctuate. Lower returns mean fewer numbers available for subsequent reallocation. Fluctuations can cause cut-off date movement to slow, stop, or even retrogress. Retrogression is particularly possible near the end of the fiscal year as visa issuance approaches the annual limitations.
The annual per-country limitation is a cap which visa issuances to any single country may not exceed. Applicants compete for visas primarily on a worldwide basis. The country limitation serves to avoid monopolization of virtually all the annual limitation by applicants from only a few countries. This limitation is not a quota to which any particular country is entitled, however. Clearly all countries could not receive up to their numerical limit since the worldwide annual limitation would not permit visa issuances anywhere close to such a total.
Applicability of Section 202(e): When visa demand by documentarily qualified applicants from a particular country exceeds the amount of numbers available under the annual numerical limitation that country is considered to be oversubscribed. This oversubscription may require the establishment of a cut-off date, which is earlier than that which applies to a particular visa category on a worldwide basis. The prorating of numbers for an oversubscribed country follows the same percentages specified for the division of the worldwide annual limitation among the preferences. (Note that visa availability cut-off dates for oversubscribed areas cannot be later than worldwide cut-off dates, if any, for the respective preferences.)
http://dosfan.lib.uic.edu/ERC/visa_bulletin/2000-07bulletin.html
THE OPERATION OF THE IMMIGRANT NUMERICAL CONTROL SYSTEM
The Department of State is responsible for administering the provisions of the Immigration and Nationality Act (INA) relating to the numerical limitations on immigrant visa issuances. The following information provides a brief explanation of the operation of the immigrant number allotment and control system.
DEFINITION OF SOME TERMS
Allotment
The allocation of an immigrant number to a consular office or to INS. This number may be used for visa issuance or adjustment of status, or may be returned unused to the Visa Office (VO) for reincorporating into the pool of numbers available for later allocation during the fiscal year.
Foreign State Chargeability
Ordinarily an immigrant is chargeable for visa purposes to the numerical limitation for the foreign state or dependent area in which the immigrant's place of birth is located. Exceptions are provided for a child (unmarried and under 21 years of age) or spouse accompanying or following to join a principal to prevent the separation of family members, as well as for an applicant born in the U.S. or in a foreign state of which neither parent was a native or resident. Alternate chargeability is desirable when the visa cut-off date for the foreign state of a parent or spouse is more advantageous than that of the applicant's foreign state.
Priority Date
The priority date of a preference visa applicant is the filing date of the petition that accorded preference status.
Documentarily Qualified
The applicant has informed the consular processing office that they have obtained (after being requested to do so) all of the documents which are required to meet the formal visa application requirements.
HOW THE SYSTEM OPERATES
At the beginning of each month, the Visa Office receives a report from each immigrant visa processing post listing totals of documentarily qualified immigrant visa applicants in categories subject to numerical limitation.
Cases are grouped by foreign state chargeability/preference/priority date. No names are reported. During the first week of each month, this documentarily qualified demand is tabulated.
VO subdivides the annual preference and foreign state limitations which are specified by the Immigration and Nationality Act (INA) into twelve monthly allotments. The totals of documentarily qualified applicants reported to VO, and the expected INS demand for numbers, are compared each month with the numbers available for the next regular allotment. This allows for the determination of the monthly cut-off dates, and the allotment of numbers for reported applicants who have priority dates within the newly established cut-off dates.
If there are sufficient numbers in a particular category to satisfy all reported documentarily qualified demand, the category is considered "current."
Whenever the total of documentarily qualified applicants in a category exceeds the supply of numbers available for allotment for the particular month, the category is considered to be "oversubscribed" and a visa availability cut-off date is established. The cut-off date is the priority date of the first documentarily qualified applicant who could not be accommodated for a visa number. Only persons with a priority date earlier than a cut-off date are entitled to allotment of a visa number. The cut-off dates are ordinarily the 1st, 8th, 15th, and 22nd of a month, since VO groups demand for numbers under these dates. (Priority dates of the first through seventh of a month are grouped under the 1st, the eighth through the fourteenth under the 8th, etc.)
VO attempts to establish the cut-off dates for the following month on or about the 8th of each month. The dates, along with visa allotments for use during that month, are immediately transmitted to consular posts, and also published in the Visa Bulletin.
BACKGROUND INFORMATION ON THE SYSTEM AND CLARIFICATION OF SOME FREQUENTLY MISUNDERSTOOD POINTS
Applicants entitled to immigrant status become documentarily qualified at their own initiative and convenience. By no means has every applicant with a priority date earlier than a prevailing cut-off date been processed for final visa action. On the contrary, visa allotments are made only on the basis of the total applicants reported documentarily qualified each month, and the expected INS number use. Demand for visa numbers can fluctuate from one month to another, with the inevitable impact on cut-off dates.
If an applicant is reported documentarily qualified but allocation of a visa number is not possible because of a visa availability cut-off date, the demand is recorded at VO and an allocation is made as soon as the applicable cut-off date advances beyond the applicant's priority date. Visa numbers are always allotted for all documentarily qualified applicants with a priority date before the relevant cut-off date, as long as the case had been reported to VO in time to be included in the monthly calculation of visa availability. There is no exception to this principle.
Allocations outside the regular monthly cycle are possible only in emergency or exceptional cases, and only at the request of the office processing the case. Note that should retrogression of a cut-off date be announced, VO can honor extraordinary requests for additional numbers only if the applicant's priority date is earlier than the retrogressed cut-off date.
Not all numbers allocated are actually used for visa issuance; some are returned to VO and are reincorporated into the pool of numbers available for later allocation during the fiscal year. The rate of return of unused numbers may fluctuate from month to month, just as demand may fluctuate. Lower returns mean fewer numbers available for subsequent reallocation. Fluctuations can cause cut-off date movement to slow, stop, or even retrogress. Retrogression is particularly possible near the end of the fiscal year as visa issuance approaches the annual limitations.
The annual per-country limitation is a cap which visa issuances to any single country may not exceed. Applicants compete for visas primarily on a worldwide basis. The country limitation serves to avoid monopolization of virtually all the annual limitation by applicants from only a few countries. This limitation is not a quota to which any particular country is entitled, however. Clearly all countries could not receive up to their numerical limit since the worldwide annual limitation would not permit visa issuances anywhere close to such a total.
Applicability of Section 202(e): When visa demand by documentarily qualified applicants from a particular country exceeds the amount of numbers available under the annual numerical limitation that country is considered to be oversubscribed. This oversubscription may require the establishment of a cut-off date, which is earlier than that which applies to a particular visa category on a worldwide basis. The prorating of numbers for an oversubscribed country follows the same percentages specified for the division of the worldwide annual limitation among the preferences. (Note that visa availability cut-off dates for oversubscribed areas cannot be later than worldwide cut-off dates, if any, for the respective preferences.)