TN 30 (03-02)
DI 39506.200 The Reporting Process - Recording and Reporting Obligations
The following sections set forth standards and definitions for State agency use in recording and reporting obligations incurred for SSA disability program operations. Also presented are instructions for the preparation of fiscal reports: Forms SSA-4513 (State Agency Report of Obligations for SSA Disability Programs), and SSA-4514 (Time Report of Personnel Services for Disability Determination Services).
B. Definitions - obligations and disbursements
An obligation is a financial or related transaction that creates a legal liability to pay. In most cases, the actual disbursement of funds occurs after the obligation is made. An obligation can be made in a variety of ways, such as placing an order, awarding a contract, receiving a service, etc. which requires payment during a given period or in some future period.
Obligations must be based on a bona fide need for goods or services that exist within the Federal fiscal year (October 1 through September 30) and must be made no later than six months after the close of that fiscal year (March 30). The intent of this policy is to allow the DDS sufficient time to incur the fiscal year obligation through State purchasing procedures when funding is authorized late in the year.
Obligations represent liabilities against obligational authority and include payments for goods or services received and commitments to pay for goods or services ordered.
Obligations result from:
Employing individuals (compensation of personnel for time devoted to SSA disability programs);
Issuing travel authorizations (travel expenses incurred specifically for time devoted to SSA disability programs);
Ordering services (e.g., consultative examinations, contractual services);
Ordering materials; and
Ordering equipment and making other approved capital expenditures.
Valid obligations should be supported by documents/records that describe the nature of the obligations and support the amounts recorded.
2. Obligational estimates
Where an obligation is definite but the precise amount is not known, it may be estimated. The basis used in developing such estimates must be applied consistently from period to period.
3. Obligational authority
Obligational authority is the monetary limit approved for State agency obligations to be incurred for SSA disability program operations. The obligational authority--granted in the State agency budget approval (Form SSA-872)--places a cumulative limit on the amount of obligational authority available to the State agency. The obligational authority--which remains available for six months after the close of the Federal fiscal year--must not be exceeded for the Federal fiscal year without SSA regional office written approval.
4. Unliquidated obligations
Unliquidated obligations represent obligations for which payment has not yet been made. Unpaid obligations are considered unliquidated whether or not the goods or services have been received. Examples of unliquidated obligations include:
EXAMPLE 1 - Delivered Orders
Examples include the unpaid amounts of salaries and wages earned by personnel during the accounting period; consultative examination (CE) and medical evidence of record (MER) reports received for which the costs have not been paid; and equipment, supplies, and services received for which the costs have not been paid.
EXAMPLE 2 - Undelivered Orders
Examples include CE and MER ordered where the reports have not been received, and equipment, supplies, and maintenance services ordered but not received.
A disbursement is the liquidation of an obligation by the issuance of a check, warrant or cash payment.