Financial obligations means orders placed for property and services, contracts and subawards made, and similar transactions that require payment by a recipient under a Federal award that will result in expenditures by a recipient under a Federal award (2 CFR § 200.1). There is no authority for subawards, as defined in 2 CFR § 200.1, under the VR program, Supported Employment (SE) program and Client Assistance Program (CAP). Additionally, the future period in which obligations may be liquidated is limited by federal requirements and the terms and conditions applicable to the award. EDGAR requirements at 34 CFR § 76.707 provide additional guidance regarding when obligations are made.
For example, travel is considered obligated when the travel is taken, and personnel expenditures for State agency employees are considered obligated when the employee performs the services. In determining when an obligation is made, agencies must also follow their State laws, regulations, and policies and procedures, as applicable.
If the grantee has not met the requirements of Section 19 of the Rehabilitation Act to carry over federal funds for obligation and expenditure in the subsequent fiscal year, the grantee must incur all obligations, for which it has provided sufficient match funds, by the end of the FFY of appropriation (i.e., September 30). In this circumstance, the period of performance and the FFY of appropriation are the same. If the grantee has met the carryover requirements by the end of the FFY of appropriation, the period of performance will be extended to include the carryover period (subsequent FFY). This will enable the grantee to incur new obligations against federal award funds during the carryover period, as indicated by the revised period of performance on the Grant Award Notification (GAN). In other words, in this circumstance, the period of performance covers two FFYs – the FFY of appropriation plus the carryover year.