8362

ENCUMBRANCES

8362

Encumbrances represent purchase orders or other commitments for goods which have not been provided or for services that have not been rendered. Encumbrances become expenditures and liabilities only if goods are actually provided or services are actually rendered.

Encumbrances shall be recorded as they occur for budgetary control purposes. The issuance of a purchase order or the signing of a contract creates an encumbrance in the amount required to be paid during the current year. This amount shall no longer be available for obligation or expenditure unless the purchase order or contract is cancelled, thus voiding the encumbrance.

Outstanding encumbrances at year-end shall be cancelled except for encumbrances related to capital improvement projects and individual school activity funds. Upon approval of the associate superintendent for administrative services, certain other outstanding encumbrances may be carried forward to the subsequent fiscal year. These encumbrances shall be reported as a reservation of fund balance, and the subsequent year's appropriations shall provide the authority to complete these transactions.

Adopted: January 21, 1992