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3.2 Period of Availability of Funds

Expenditure of Funds

An expenditure is a payment or disbursement. The expenditure may be for the purchase of an asset, the reduction of a liability, or a distribution to the owners. It may or may not be considered an expense. For instance, an expenditure to eliminate a liability is not an expense, while expenditures for advertising, salaries, etc., will likely be recorded immediately as expenses.

To illustrate the difference between an expenditure and an expense from an accounting perspective, we provide the following example:


A recipient purchases a $50,000 police car with award funds. The cost of the car is an expenditure of award funds, and all $50,000 is deducted from the available award funds for purposes of accounting for the award fund balance. However, for purposes of an entity’s financial statements, the car will be capitalized as an asset and depreciationed over the life of the car.

Expenditure of funds may occur during the award liquidation period, which is no later than 90 days after the end date of the award. If your award has been properly obligated, you will have the full liquidation period for remaining expenditures. Any funds not liquidated at the end of the 90-day period will revert to the awarding agency.

The liquidation period exists to allow projects time to receive ordered goods and make final payments. No new obligations may be made during the liquidation period.

Example of Obligation, Expenditure, and Liquidation Periods
Period Example
Obligation Period
(Recipient’s Books)
Award period = 10/01/09–9/30/11
Award Date = 12/01/09 (Federal books)
Expenditure Period 10/01/09–12/29/11
Liquidation Period
(90 days after end of award)
(90 days after end of award)
line chart of expenditure, award, and liquidation periods

information iconFinancial Management Tip

The Grant Payment Request System automatically freezes funds 90 days after the end of the award!