fellowship evaluations

OK, I swore and oath that I would never do anything to embaras the university, but I'm just stating the facts, ma'am.
I'm on this committee to award fellowships to graduate students across the university to continue their studies.
One must evaluate their personal statement, their CV, and their instructor recommendations, and there is also an over-all recommendation.
1 - do not give this student a fellowship
2 - give this student a fellowship if there are available funds
3 - definitely give this student a fellowship
4 - consider this student for the highest level of funding.

I must confess, I'm a bit confused.
It may seem like there is a scale from 1 to 4, 1 being the lowest, 2 being next, 3 being next, and 4 being highest.
However, the descriptions of the rankings, to my mind, contradict this.
For example, I think it is saying more about a student if you should definitely give him or her a fellowship than to say you should consider him or her for the highest level of funding. Saying that you should consider a student for a certain level of funding really isn't saying much. It only takes a second to consider a student for a the most prestigious fellowship, and then decide that he or she won't get it. So, it seems to me that your assessment of a student must be much higher if you say he or she should definitely get some fellowship or other. Consideration is cheap.
But most importantly, it seems like any student that deserves a fellowship should be given no higher a ranking than 2. To say otherwise would be to say that a student should be given a fellowship even if funds aren't available. At the very least, that's fiscally irresponsible, or dishonest, and it might even be incoherent. I could not in good conscience say that a student should be awarded a fellowship if the funds are not available.