The U.S. Department of the Treasury published new frequently asked questions (FAQs) for the State and Local Fiscal Recovery Funds (SLFRF) program on the Interim Final Rule (the Obligation IFR). On November 29, 2023 Treasury held a Tribal consultation on the SLFRF program to further clarify the “obligation” requirement. After carefully considering Tribal leader feedback and written comments and pursuant to Executive Order 14112 (Reforming Federal Funding and Support for Tribal Nations to Better Embrace Our Trust Responsibilities and Promote the Next Era of Tribal Self-Determination), Treasury updated the FAQs on obligations in the newly-added Section 17.

A webinar for Tribal governments will be held on May 7, 2024 at 2:00 p.m. ET– register here.

Among other items of importance to Tribes, these FAQs, highlighted in the Tribal Factsheet contain important clarifications:

• Treasury considers an interagency agreement between a particular Tribal government’s units (including the Tribal Council), departments, agencies, or other instrumentalities of a Tribe to constitute an obligation for purposes of the SLFRF rule if the agreement satisfies certain conditions. A unit of a Tribal government includes an enterprise organized under Tribal law if the Tribe treats that enterprise as a unit, department, agency, or other instrumentality of the Tribe. In addition, a corporation formed under section 17 of the Indian Reorganization Act or section 3 of the Oklahoma Indian Welfare Act would be considered a unit, department, agency, or other instrumentality of the Tribe for purposes of the SLFRF regulations.
• For purposes of the SLFRF program, the procurement standards of 2 CFR Part 200 (the Uniform Guidance) do not apply to an agreement between units, departments, agencies, or other instrumentalities of a Tribe discussed above. The procurement requirements of the Uniform Guidance would need to be followed by the Tribal unit, department, agency, or other instrumentality of a Tribe with respect to the procurement of material, equipment, and supplies from outside vendors.
• The Obligation IFR clarified, and the FAQs confirm, that subrecipients are not subject to the December 31, 2024, obligation deadline. The obligation deadline applies to the recipient of SLFRF funds. Neither subrecipients nor contractors need to take additional steps to obligate SLFRF funds after entering into a subaward or contract with the recipient.
• 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.
• The Obligation IFR clarifies that Tribes that receive an approved indirect cost rate agreement from the National Business Center or the de minimis rate of 10 percent of modified total direct costs pursuant to 2 CFR 200.414(f) may continue to charge their negotiated indirect cost rate agreement, after December 31, 2024, through December 31, 2026.
• Treasury is clarifying how recipients may cover cost increases associated with contracts or subawards entered into by December 31, 2024.

Additional details about these and other clarifications can be found in the newly-added Section 17 of the FAQs and the attached Tribal Factsheet.

Resources:

• SLFRF FAQs
• Tribal Factsheet on the Obligation FAQs
• 2022 Final Rule
• Overview of the 2022 Final Rule
• 2023 Interim Final Rule
• Overview of the 2023 Interim Final Rule
• Obligation Interim Final Rule
• Obligation Interim Final Rule Quick Reference Guide
• Compliance and Reporting Guidance