10 Financial regulation 4.1 grants authorization to the Director General to incur contractual obligations (encumbrances) and make payments for the purposes for which the budget was approved and up to the amount so approved, subject to available funding.
20 In accordance with Financial Regulation 4.2, once the budget has been approved, commitments can be made subject to available funding. Commitments must be implemented in the financial period (biennium) for which delivery of goods or services is expected to be completed (i.e. before the award end date or end of the biennium, whichever is sooner). In the event that commitments are made for implementation and delivery in a future financial period, these should be entered against the future period budget, once it is approved. In the event that the future budget (and workplan) is not yet approved or available, and a contractual commitment is expected to continue beyond the current financial period, the committed value should be limited to that part expected to be delivered in the current biennium.
30 To ensure that all payments can be made for deliveries in the financial/award period, encumbrances may remain open for 3 months following the end of the financial period/award end date. After this time, any remaining encumbrances must be closed, and funds returned to the relevant award. For voluntary awards, any funds not spent or committed are to be reported to the donor. For assessed contributions, uncommitted funds are returned to the assessed contribution balance, and reported to Member States. For other core funding (including core voluntary contributions and administrative support funds), funds are returned to the fund balance, for use in the new financial period.
40 These provisions are designed to ensure that there is alignment between the budget and financial reporting for the period in which results are reported, and funds are implemented.
