Pre-Encumbrances, Encumbrances

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Pre-Encumbrances, Encumbrances Expenses
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Purpose

• This session is designed to explain what
  pre-encumbrances, encumbrances expenses are and
  how to monitor them.

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Agenda

• 1. Basics of Pre-Encumbrances, Encumbrances and
  Expenses
• 2. Review the Processes
• 3. Monitoring Pre-Encumbrances and Encumbrances

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Basics of Pre-Encumbrances

• What are Pre-Encumbrances?
• Entry Approval of Requisitions
• Budget Checking
• Canceling a Requisition

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Basics of Encumbrances

• What are Encumbrances?
• Purchase orders
• Purchase order numbering
• Health eShop VS Special Order Reqs

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Basics of Expenses

• What are Expenses?
• Accounts Payable Vouchers
• PO vouchers
• Check Requests
• Travel
• Transactions that hit the Journal lines
• PCard
• Phone Bill / Mail Charges / Copy Charges
• IDRs Cost Transfers
• Payroll expenses

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Basics of Pre-Encumbrances, Encumbrances
Expenses

• Basic terms

Pre-Encumbered Requisition
Encumbered Purchase Order
Expended Voucher/Journal Expense
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Pre-Encumbrance Process
Requisition is Created (make sure that all
required fields are entered and have valid codes)
Start
Requisition Keyed
Requisition is Budget Checked (makes sure that
the commitments expenditures will not exceed
the total Budget) Req is approved by the
Dept. Must pass Budget Check to continue! When
the Budget check is Valid, then the
Pre-Encumbrance is made.
Continue
Approved requisitions are marked to be processed
into a Purchase Order by the Purchasing
Department after review for non-Health eShop
Orders. Health eShop orders less than 2,999 are
automatically processed by the system to a
Purchase Order.
Continue
Any Edit or Budget checking errors will be
referred back to the department for resolution.
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Encumbrance Process
Reqs are assigned Purchase Orders and Purchase
Orders are generated by the Buyer or the system.
Purchase Order is Budget Checked (makes sure that
the commitments expenditures will not exceed
the total Budget) Must pass Budget Check to
continue! When it is Budget Checked to Valid,
then the Pre-encumbrance is reversed, and the PO
amount is Encumbered.
Requisition Marked for PO
Purchase Orders are then dispatched to the Vendor
to fulfill the good or service.
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Expense Process
Invoice is received by Accounts Payable with
Purchase Order number listed on Invoice. Purchase
Order is Required to continue!
If the Purchase Order is set up for 3-way match
then the lines must be received in PeopleSoft by
Receiving or the Department. Must be received to
continue!
PO Ready For Payment
Voucher Keyed
Voucher is Budget Checked (makes sure that the
commitments expenditures will not exceed the
total Budget) Must pass Budget Checking to
continue! When Budget Check is Valid, then the
Encumbrance is reversed, and the Voucher Amount
is expended.
Journal generate is run and vouchers are posted
to the Journal Lines
Continue
Check printing assigns each voucher with a check
number. Check is remitted to vendor for payment.
Funds were Pre-Encumbered, Encumbered Expended.
All Steps are Complete!
Check is Printed
Budget checking errors will be referred back to
the department for resolution .
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How Can I see these Entries?

• Budget Transaction Detail Report
• Comprehensive Financial Report
• Open Encumbrance Report (just shows outstanding
  encumbrances)

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Budget Transaction Detail
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Monitoring Pre-Encumbrances, Encumbrances
Expenses

• Why?
• Use it or lose it
• Errors
• Who?
• Your Department
• How?
• Budget Transaction Detail Report
• Comprehensive Financial Report
• Open Encumbrance Report

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Monitoring Pre-Encumbrances, Encumbrances
Expenses

• If it is Encumbered and received, but not
  Expended
• Take action
• Who to contact
• Expensed (Payment) Amount vs. Encumbered amount
  Differences
• Cancellations

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Helpful Websites

• Supply Chain/Purchasing
• Go to the A to Z index and click on the M and
  Materials Management gt Purchasing gt Purchasing
  Home gt Buyers Commodity Listing
• Controllers Division gt Contacts
• Go to the A to Z index and click on C and the
  Controllers Division gt Contact Us

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Questions ?