Navigating the Obligation Interim Final Rule for Tribal Governments under SLFRF

Navigating the Obligation Interim Final Rule for Tribal Governments under SLFRF

April 8, 2024

The American Rescue Plan’s State and Local Fiscal Recovery Funds (SLFRF) provide pivotal financial assistance to Tribal governments to mitigate the adverse effects of the COVID-19 crisis. On March 29, 2024, after reviewing feedback from their consultations held with Tribes, the U.S. Department of the Treasury published new Frequently Asked Questions (FAQs) on the Obligation Interim Final Rule (Obligation IFR), along with a complementary Fact Sheet. These documents are essential for understanding the specific regulations for fund usage under SLFRF, supplying clarity to Tribal governments on the updated definitions of “obligation.”

Obligation and Expenditure Deadlines

The Obligation IFR maintains previously established deadlines. Tribal governments must commit their SLFRF funds by December 31, 2024, ensuring allocations are earmarked for specific uses. Subsequently, these funds should be fully expended by December 31, 2026. There are some categories, such as Surface Transportation projects, with alternative deadlines.

Post-2024, SLFRF funds can cover various legal and administrative costs, but estimates for these expenditures must be submitted to the Treasury. Covered costs include reporting, compliance, audit expenses, record retention, and civil rights requirements. Tribal governments allocated more than $30 million in SLFRF funds must report by July 31, 2024, while those with lesser allocations have until April 30, 2025.

Indirect Cost Rate

The Obligation IFR reaffirms that Tribal governments with an approved indirect cost rate may continue to apply it to their expenses through December 31, 2026.

Payroll Costs

Tribal government payroll expenses for positions established and filled before the end of 2024 are considered obligated until December 31, 2026. This secures funding for essential roles within Tribal operations.

Application to Subrecipients

The IFR clarifies that the obligation deadline does not apply to subrecipients, easing the administrative process for those managing funds at multiple levels.

Interagency Agreements

Interagency agreements among Tribal government units, provided they meet specific conditions, constitute an obligation for SLFRF funds. 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.

Procurement Considerations

The Obligation IFR stipulates that the procurement standards of the Uniform Guidance do not apply to interagency agreements within Tribal entities, but external procurements must adhere to these standards unless exempted under special circumstances.

Contract Amendments

Crucial for project adaptability, the updated provisions in the Obligation IFR grant Tribal governments the necessary flexibility to manage contract change orders, contingencies, and amendments effectively. Contracts signed before the December 31, 2024, deadline may expressly include terms for modifications and unforeseen circumstances, which allows SLFRF funds to address incremental costs arising from such conditions.

Specifically, recipients may apply SLFRF funds to cover costs related to change orders or contract contingencies anticipated within the initial contract framework. These incremental outlays are not deemed new obligations but rather are associated with preexisting commitments to accommodate changes or address contingencies.

The IFR also considers contract amendments permissible if the scope and purpose of the contract remain substantially unchanged from the original agreement that was obligated by the end of 2024. This insight into contract amendments ensures that Tribal governments can continue their projects without the risk of inadvertently incurring obligations after the deadline.


The Obligation IFR and updated FAQs offer essential guidance and increased flexibility for Tribal governments using SLFRF funds. For Tribal governmental operations seeking further assistance with SLFRF program compliance, REDW is committed to providing expert guidance and support. Contact us for individualized consultation to ensure proper fund management and compliance with these rules. For further information, visit the SLFRF website or contact the Treasury directly at

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