An example of a recurring obligation is a monthly rental. The same amount is obligated and paid for each month. An annual obligation is a type of recurring obligation and is established for goods and services being provided continually, but the monthly obligation amount is indefinite and may vary from month to month. Payments can exceed the monthly obligations, but not the annual obligation. Annual obligations are to be entered directly from the purchase order or contract and shall be reviewed by the CCM prior to each month-end and adjusted as appropriate.
Utilities are an example of an annual obligation.
The accruals established for future months are not automatically reduced when a monthly payment exceeds the monthly accrual. Therefore, the total payments plus the accruals may exceed the annual obligations. The OFM shall verify all procurement documents to ensure the accountclass, fund, sub- object, program, and amount are proper, and verify the CCM s validation of funds availability. Logs are not required to be maintained for documents entered into OBL2. Obligations are entered at face value rather than net of discount.