Committing money for a specific purchase or service before payment is actually made, such as a Purchase Order, Requisition, GSU Services Request, etc. Encumbered funds are not available for use by the organization.

Commitments related to unperformed (executory) contracts for goods or services.

The recording of a commitment made against project funds to purchase material or services for which actual payment will not be made until materials are delivered or service rendered. Encumbrances are recorded when purchase orders, contracts, subcontracts, or other forms of purchase agreements are issued to the vendor.

Commitments incurred whereby the goods and services have not yet been received. These commitments are expressed by purchase orders, contracts, future salary, etc. It ceases to be an encumbrance when the commitment is paid or otherwise canceled.

A budgetary tool used to help prevent accounts from overspending by reserving funds for anticipated future expenses. Encumbrances, also referred to as open commitments, are established using transaction code 05x.

An obligation incurred in the form of a purchase order or contract for goods or services ordered but not yet received; sometimes referred to as a commitment.

An entry into Oracle Grants Accounting made to record anticipated expenditures of any type.

An amount committed by Purchase Order or Travel Authorization to be spent that has not yet been paid.

An obligation in the form of a purchase order, contract or other commitment which is chargeable to an appropriation subaccount and for which a part of that appropriation is reserved prior to incurring the liability and prior to the actual expenditure of funds.

An obligation in the form of purchase orders or contracts that are chargeable to an allotment or appropriation and for which a part of the allotment or appropriation is thereby reserved. Encumbrances are not considered elements of expenditures for reporting of allotments, budgets or statewide financial activities.

A financial transaction which reserves funds for a specifically identified purpose. For example, a requisition submitted to the Purchasing Department will generate an encumbrance until the goods or services are actually paid for at which time the encumbrance will be decreased and the actual expenditure component increased. Encumbrances are key components from a planning perspective since it allows managers to quickly determine how much money is actually available for spending versus monies already committed for future spending such as payroll encumbrances. The allocation (budget authority and a positive figure) minus encumbrances and actual expenditures result in the available balance which can be positive or negative. In summation, encumbrances represent expenditures that are going to happen and impact cash but have not occurred as of yet.

An obligation in the form of a purchase order, contract, or other commitment which is chargeable to an appropriation. Available appropriations are reduced by the amount of outstanding encumbrances. Encumbrances are not expenditures or liabilities.

An amount of the available balance of an appropriation earmarked for paying anticipated or known obligations.

The recorded reservation of appropriated funds to provide for payment of County contract obligations, which reduces remaining spending authority under an appropriation by that amount. A certification of funds constitutes sufficient evidence from the Department of Finance that there is a sufficient unencumbered balance in an appropriation to cover the amount of a specified contract, or the first term amount of a multi-term contract, as required by Chapter 11B, Montgomery County Code.

Prospective expenditures, such as Purchase Orders or executory contracts, to be recognized at the time the Purchase Order or executory contract is issued.

The commitment of appropriated funds to purchase an item or service.

All monies committed to the purchase or payment of an item or service; these funds have not actually been liquidated yet, however, they cannot be spent, these funds become expenditures when commitments have been fulfilled (i.e. invoices, etc.)

(see also Dis-Encumbrance) The encumbrance is a preliminary charge to the project. It represents the funds oblidged through a Purchase Order, but not yet spent. It commits project funds at the time of the order and makes them unavailable for other expenditures. It is a vital tool to control expenditures and avoid overages. Purchase Order - Encumbrance - Obligation (Locking) of Funds Facilities & Administrative Costs (F&A) also called Indirect Cost (IDC) Costs that are incurred for common of joint objectives, and therfore , cannot be identified readily and specifically with a particular sponsored project.

funds specifically set aside (i.e., "encumbered") for future costs prior to their actual expenditure.

An encumbrance is an expenditure that is going to happen at a later date. The journal is not an actual transaction, but rather records an amount authorized to be spent. This typically occurs when a contract or purchase order is created.

Funds that have been set aside or "claimed" for projected expenses pending actual expenditure of the funds.

(1) Funds from an appropriation are set aside for a specific purpose ( Such as SCS, PD, PG, etc.). (2) A reservation/commitment (by a Purchase order) of budgeted Moneys into the campus accounting system. The PD, SCS and Orders are all encumbered before processing for payment.

See Commitments

Funds not yet expended and are delegated or set aside in anticipation of an expenditure in the form of a purchase order, contract, or other commitment, chargeable to an appropriation. These funds cease to be an encumbrance when paid.

Commits unspent balances due to a firm obligation for future payment. Typically generated by purchase orders and appointment forms. Included in "Total Commitments"

A firm commitment or obligation placed against funds of a department, in the form of purchase orders or agreements, to cover a later expenditure required when goods are delivered or services are rendered.

The setting aside of a specific sum of money for a specific purpose prior to its expenditure.