Treasury Publishes Updated FAQ on Obligations
On March 29, the U.S. Treasury updated their frequently asked questions (FAQ) to further clarify the “obligation” requirement. This recent update is notable considering the November 2023 Interim Final Rule (IFR) issued on the definition of obligation. GFOA is still reviewing the materials but wanted to highlight a few points after an initial scan. First is that Treasury will be extending the reporting deadline (the new deadline for quarterly reporters is July 31, 2024, and April 30, 2025 for annual reporters) for estimated costs associated with certain administrative and legal requirements as described in the November 2023 IFR. Further, the updated FAQs contain several clarifications:
- Treasury considers an interagency agreement to constitute an obligation for purposes of the SLFRF rule if the agreement satisfies certain conditions.
- Treasury considers a recipient to have incurred an obligation with respect to personnel costs for an employee through December 31, 2026, to the extent the employee is serving in a position that was established and filled prior to December 31, 2024.
- In the update, Treasury is clarifying how recipients may cover cost increases associated with contracts or subawards entered into by December 31, 2024.
On May 8 and 9, 2024, Treasury plans to host recipient webinars to further explain the updates to the FAQs. SLFRF recipients are encouraged to attend either one, the same material will be presented on both. Click here to register for the May 8 (10:00am-11:30am ET) webinar, and click here for the May 9 (1:00pm – 2:30pm ET) webinar.