Jerome Joint School District No. 261

FINANCIAL MANAGEMENT 7450P1

Timely Obligation of Funds

When Obligations are Made

Obligations are orders placed for property and services, contracts, and subawards made, and similar transactions

during a given period that require payment by the District during the same or a future period.

Funds received under a federal grant shall be considered to be obligated according to the standards provided in 34C.F.R § 75.7078 or 34 C.F.R. § 76.707, as applicable. The following table illustrates when funds are determined to

be obligated under federal regulations:

Period of Performance of Federal Funds

All obligation must occur on or between the beginning and ending dates of the grant project. This period of time is

known as the period of performance. The period of performance is dictated by statute and will be indicated in the

Grant Adjustment Notice (GAN). Further, certain grants have specific requirements for carryover funds that must

be adhered to.

State Administered Grants

As a general rule, state-administered federal funds are available for obligation within the year that Congress

appropriated the funds for. However, given the unique nature of educational institutions, for many federal

education grants, the period of availability is 27 months. Federal education grant funds are typically awarded on

July 1 of each year. While the District will always plan to spend all current grant funds within the year the grant

was appropriated for, the period of obligation for any grant that is covered by the “Tydings Amendment” is 27

months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of

the second following fiscal year. This maximum period includes a 15-month period of initial availability, plus a 12-

month period for carryover. For example, funds awarded on July 1, 20XX would remain available for obligation

through September 30, 20XX.

Direct Grants

In general, the period of availability for federal funds authorized under direct grants is identified in the GAN.

For both state-administered and direct grants, regardless of the period of availability, the District must liquidate all

obligations incurred under the award not later than 120 days after the end of the funding period unless an

extension is authorized. Any funds no obligated within the period of availability or liquidated within the

appropriate timeframe are said to lapse and must be returned to the awarding agency. Consequently, the District

shall closely monitor grant spending through the grant cycle.

The District shall submit all financial, performance, and other reports required by the terms and conditions of the

federal award before the end of this 120-day period. Any such reports required to be submitted to a pass-through

entity shall be provided within 90 days of the end of the funding period, unless an extension is authorized.

Carryover

State-Administered Grants

As described above, the Tydings Amendment extends the period of availability for applicable state-administered

program funds. Essentially, it permits recipients to “carry over” any funds left over at the end of the initial 15

month period into the next year. These leftover funds are typically referred to as carryover funds and continue to

be available for obligation for an additional 12 months. Accordingly, the District may have multiple years of grant

funds available under the same program at the same time.

Any carryover in individual federal programs is determined in an annual audit performed each year according to

GAAP and State statutes. After carryover amounts are determined, they are reported and administered according

to specific federal award requirements as outlined in the individual program applications.

Policy History:

Adopted on: 05/28/2024

Revised on: