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Encumbrance Accounting Policy

An encumbrance is a transaction designed to set money aside (accrued) for a specific future use. Funds can be encumbered by a DEPARTMENT PURCHASE ORDER or salary contract. 

Accruals must be made prior to the end of the fiscal year for all outstanding bills that are unpaid or are expected to be unpaid by May 31 for services rendered prior to May 31. If an accrual paid in the subsequent fiscal year is more than what was originally accrued, the difference will be charged to the department in the current fiscal year.