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Unobligated Balance: Key Insights into Its Legal Meaning and Importance
Definition & meaning
The term "unobligated balance" refers to the portion of federal funds that a grantee has received but has not yet committed to specific projects or expenditures. This amount is calculated by subtracting the total obligations (the funds that have been legally committed) from the total funds authorized by the federal agency. Understanding unobligated balance is crucial for managing grant funds effectively and ensuring compliance with federal regulations.
Table of content
Legal use & context
Unobligated balance is primarily used in the context of federal grants and cooperative agreements. It plays a significant role in financial management and reporting for state and local governments. This term is relevant in various legal areas, including administrative law and public finance. Users can manage their obligations and funding more effectively using legal templates provided by US Legal Forms, which can help ensure compliance with federal requirements.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A local government receives a $1 million federal grant for infrastructure projects. If they have spent $600,000 on various projects, their unobligated balance would be $400,000.
Example 2: A nonprofit organization is awarded $500,000 for community services. If they have only obligated $200,000, their unobligated balance stands at $300,000. (hypothetical example)
Relevant laws & statutes
Pursuant to 49 CFR 18.3, the definition and management of unobligated balances are outlined in the Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments. This regulation establishes the framework for managing federal funds effectively.
Comparison with related terms
Term
Definition
Difference
Obligated Balance
Funds that have been legally committed to specific projects.
Unobligated balance refers to funds not yet committed, while obligated balance is already designated.
Grant Funds
Money awarded to an organization for a specific purpose.
Unobligated balance is a subset of grant funds that remain uncommitted.
Common misunderstandings
What to do if this term applies to you
If you are managing a grant and need to assess your unobligated balance, start by reviewing your financial records to determine your total obligations. If you find that you have an unobligated balance, consider how to allocate these funds effectively within the grant's guidelines. For assistance, explore US Legal Forms for templates that can help you manage grant-related documentation. If the situation is complex, consulting a legal professional may be beneficial.
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