While PS 3390 defines contractual obligations within the Government, it is further clarified that a “subject to funding” clause does not exclude a contractual obligation from being reported. Contracts with subject to funding clauses (i.e. funding by government appropriations) are considered irrevocable contractual obligations, as all contractual obligations of the Government are subject to funding, according to the Financial Administration Act, Section 40(1).
Departments and agencies should provide details of significant contractual obligations in their departmental financial statements. Significance is assessed based on the departmental materiality policy without consideration for Public Accounts materiality levels.