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Tennessee Housing Development Agency 2025 LIHEAP Policy Manual for Regular and Crisis Assistance 51

Definition of “Obligated” • Obligated funds are those that the subgrantee has legally committed to spend within the grant period. • This commitment is usually documented by an approved LIHEAP application that results in a benefit being certified and payment initiated (e.g., a vendor payment authorization in SmartSimple or a check request submitted). • Once the benefit is committed to a household (or for approved admin/Assurance 16 costs), the funds are considered obligated — even if the vendor has not yet cashed the payment or the utility has not yet posted it.

Examples of Obligated Funds 脥 � An application is processed, eligibility is confirmed, and a $500 benefit is authorized to the electric company. (Obligated) 脥 � An agency encumbers $2,000 for salaries in their approved budget and has payroll documentation tying the cost to LIHEAP administration. (Obligated) 脥 � A fuel vendor invoice for crisis delivery is approved and entered in SmartSimple. (Obligated)

Examples of Funds NOT Yet Obligated  Funds sitting in the agency’s account with no client assignment.  Budget lines for Assurance 16 or Outreach that have not been tied to an invoice or expenditure.  Estimated benefits not yet approved in an application system. 3. FY 2026 Start Date • The official program start date for FY 2026 is November 1, 2025 (instead of the traditional October 1 start date). • Spend-down benchmarks are tied to the staged disbursement schedule described above. 4. Sample Spend Down Calendar One-Third Distribution Example (33/33/24): • By February 28, 2026 – At least 30% obligated • By May 31, 2026 – At least 60% obligated • By August 31, 2026 – At least 85% obligated • By September 30, 2026 – 90% obligated (Year 1 requirement)