When to Obligate Funds?

Funds and projects included in the capital improvement and general fund budgets of local government agencies should be reported as obligated once the grantee's decision maker approves the budget, provided that the capital improvement is permitted by local statutes, rules, and procedures.

What does it mean to obligate funds?

Obligating funds to an Activity means to commit funds to an Activity in accordance with programmatic requirements for a grant appropriation. Once obligated, funds are then available for drawdown, that is, disbursement of the funds.

Who can obligate federal funds?

Congress passes 12 annual appropriation acts, as well as supplemental appropriation acts, each year. These appropriation acts provide budget authority to obligate and expend funds from the U.S. Treasury for specific purposes.