What types of encumbrances are used at the university?

There are four encumbrance types used at the university.

1. Commitment: Funds are encumbered as commitments when a Requisition is approved.

2. Obligation: When a Purchase Order (PO) is created from an approved Requisition, the commitment encumbrance is released and an obligation encumbrance is created.

3. Travel Authorization: Funds are encumbered when a Travel Authorization (TA) is approved.

4. F&A / Burden: Burden is an encumbrance of indirect costs also called Facilities & Administrative Costs (F&A). F&A costs are general operating costs incurred by the University in support of research, instruction, and other sponsored activities and are managed by the Office of Sponsored Programs. For support or questions specific to this encumbrance type, email osp@boisestate.edu.

What is the process to clear out (reverse) an encumbrance?

Encumbrance reversal is dependent on the type of encumbrance.

1. Commitments are reversed and changed to obligations when a Purchase Order (PO) is created for an approved requisition OR when a Requisition is withdrawn by the Requisition submitter or requester.

2. Obligations are released through the process of issuing payments against the PO. This process is initiated through Purchase Order Payment Approval (Ok to Pay) Smartsheet. Obligations can also be released if the Buyer completes a status change to “Finally closed” to the line or PO.

3. Travel Authorization (TA) encumbrances are reversed in one of three ways:

   1. An Expense Report (ER) is created with the TA number included. The amount of the TA request (encumbered funds) is released when the ER is paid.

   2. The TA is cancelled or ‘Reverse Encumbrance’ is selected in the TA module of Bronco Hub.

   3. Department requests an encumbrance reversal by emailing if unable to resolve by completing steps 3.1 or 3.2 P2PReimbursements@boisestate.edu.

What are the steps to research and troubleshoot an encumbrance?

1. Determine the type of encumbrance

Best practice is to run the Budget vs Actuals report to identify any encumbrances. Encumbered amounts are listed under the Encumbrance column of the BvA output.

After running the BvA, click the encumbered amount hyperlink and click Drill to Encumbrance Detail to view more information.

Open

Determine the encumbrance type using the Journal Category column of the BvA Encumbrance Detailed Transaction output.

Open

What are the steps for each type of Encumbrance?

Journal Category is Requisition (commitment)

If the Journal Category is Requisition AND a Purchase Order (PO) has not been created, the encumbrance is a commitment.

• If the PO Number field of the BvA is blank, a PO has not been created.

  • If your department continues with the purchase, the commitment will be released and the amount will be encumbered as an obligation after the buyer creates a PO.

  • If your department needs to cancel the purchase, the submitter/requester should withdraw the Requisition and email the buyer listed on the Requisition to let them know the procurement request has been withdrawn.

Journal Category is Purchase Order (obligation)

If the Journal Category is Purchase Order a PO has been created, the encumbrance is an obligation.

• Copy the PO Number from the BvA and the Requisition Lifecycle Campus Transaction Dashboard to view the PO Line Status and the Currently Encumbered Amount.

• If the PO Line Status displays FINALLY CLOSED and $0.00 encumbered, the encumbered funds are likely related to a journal entry or a system error. Submit an OCI service request to reverse the encumbrance. Provide the encumbrance amount from BvA, charge string and PO number in the OCI service request.

• If the PO Line Status displays OPEN and the PO has been paid, email the Buyer to request the PO status be updated to FINALLY CLOSED. Once the status is updated, the encumbrance will be released. Include the PO number in the email to the buyer.

• If your department received the items related to the PO but it has not yet been paid, request payment via the Purchase Order Payment Approval (Ok to Pay) Smartsheet to release the encumbered funds.

• If your department used another payment method (P-Card or submitted an Invoice Payment not using the Smartsheet form), email the buyer listed on the approved requisition in Bronco Hub to request support with reversing the encumbrance. Include the PO number in the email to the buyer.

Journal Category is Travel Encumbrance

Travel encumbrance: If the employee travel has occurred, submit an Expense Report (ER) with the TA number included. The original amount of the TA will be reversed and the ER will post for the actual amount.

• If the TA number was not included in the Expense Report take one of two actions:

  • If the ER is pending approval, the requester should withdraw and edit the transaction to include the TA number. The ER will need to be submitted through Approval Workflow (AWF) again.

  • If the ER has been approved and paid, the department Business Manager must select Reverse Encumbrance on the TA application.

• If the employee travel will not occur, the TA creator should cancel the TA to reverse the encumbrance OR the staff with Business Manager access can Cancel or Select Reverse Encumbrance on TA’s submitted for their department.

If needed, request encumbrance reversal by emailing P2P_EmployeeReimbursements@boisestate.edu.

Journal Category is not Purchase Order, Requisition or Travel Authorization

If you notice an encumbrance not related to Requisition, Purchase Order or Travel Authorization, the encumbrance is likely tied to a journal entry.

Journal entries typically have the term “spreadsheet” in the description on an AAR or BVA.

• Open a service request with OCI to reverse encumbrances that are not tied to Purchase Orders, Requisitions or Travel Authorizations.