1. Pre-Encumbrances, Encumbrances & Expenses

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

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

4. Basics of Pre-Encumbrances What are Pre-Encumbrances? –Entry & Approval of Requisitions –Budget Checking –Canceling a Requisition

5. Basics of Encumbrances What are Encumbrances? –Purchase orders –Purchase order numbering Health eShop VS Special Order Reqs

6. 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

7. Basics of Pre-Encumbrances, Encumbrances & Expenses Basic terms Pre-Encumbered=Requisition Encumbered= Purchase Order Expended= Voucher/Journal Expense

8. Requisition is Created (make sure that all required fields are entered and have valid codes) 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. 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. *Any Edit or Budget checking errors will be referred back to the department for resolution. Pre-Encumbrance Process Start Continue Requisition Keyed Continue

9. 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.

10. * Budget checking errors will be referred back to the department for resolution. Expense Process PO Ready For Payment Continue Voucher Keyed Check is Printed Invoice is received by Accounts Payable with Purchase Order number listed on Invoice. Purchase Order is Required to continue! 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. 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! Journal generate is run and vouchers are posted to the Journal Lines 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!

11. How Can I see these Entries? Budget Transaction Detail Report Comprehensive Financial Report Open Encumbrance Report (just shows outstanding encumbrances)

12. Budget Transaction Detail

13. 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

14. 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

15. Helpful Websites Supply Chain/Purchasing –Go to the A to Z index and click on the M and Materials Management > Purchasing > Purchasing Home > Buyers Commodity Listing Controller’s Division > Contacts – –Go to the A to Z index and click on C and the Controller’s Division > Contact Us

16. Questions ?