 |
Reserve for Encumbrance |
•Reserves for encumbrances represent funds allocated for outstanding purchase orders as of June 30. The orders have been placed but NOT RECEIVED, and funds are available for the purchase.
• If the order is RECEIVED but not yet paid, an accounts payable should be accrued. This is handled through the Office of Business Affairs. The difference in the accounts payable and the reserve for encumbrance is the receipt of the goods. If received, the entry is accounts payable. If an order has been made, has not been received, and funds are available, the entry is reserve for encumbrance.
•In order to reserve funds for encumbrances and guarantee that funds will be carried forward, the department head/director should submit the Reserve for Encumbrance Form to the Office of Finance and Administration. The request requires proof of purchase to be provided and should identify the vendor, amount, commitment item, department name, account number, and a description of the goods purchased.
All Reserve for Encumbrance Forms are due to the Office of Finance and Administration by July 8.
|