This publication provides clarification on the need to seek prior approval for carryover of unobligated funds. Grantees will find this information helpful if they have unobligated balances and have a need to address programmatic goals and objectives. Prior approval is necessary for written request for notice of award, offset of the current award or subsequent award, and expanded authority.

The following is an excerpt from the HHS Grants Policy Statement.

Recipients should be aware of the difference between unliquidated obligations and unobligated balances. Unliquidated obligations are commitments of the recipient and are considered to be obligations and, therefore, should not be reported as unobligated balances.

To ensure the timely use of unobligated balances, recipients must use the “first-in/first-out” principle for recognizing and recording obligations and expenditures of those funds. Upon receipt of the annual FSR, the GMO will compare the total of any unobligated balance shown and the funds awarded for the current budget period with the OPDIV share of the approved budget for the current budget period. If the funds available exceed the OPDIV share of the approved budget for the current budget period, the GMO may select one of the following options:

• In response to a written request from the recipient, revise the current NoA to authorize the recipient to spend the excess funds for additional approved purposes (approval is intended to cover only prospective costs, not costs already incurred by the recipient)
• Offset the current award or a subsequent award by an amount representing some or all of the excess
• For awards subject to expanded authorities, restrict the recipient’s authority to automatically carry over unobligated balances in the future, use the balance to reduce or offset OPDIV funding for a subsequent budget period, or use a combination of these actions

Last Updated: June 4, 2024