Revised Encumbrance Policy

Updated March 2013

The current University Carry Forward Policy allows a Unit/Organization to carry forward its Budget Balance Available/Variance up to a maximum of 2.5% of its Annual/Current Budget of University Supported accounts (Ledger 2).

The current Encumbrance Policy permits a Unit/Organization to carry forward its year-end, non-payroll encumbered Purchase Orders (P.O.s) into the new fiscal year. This holds true for all accounts. In addition, this policy allows University Supported accounts (Ledger 2) to carry forward the budget for these encumbered P.O.s into the new fiscal year.

A revision has been made to the current policy. This revision affects University Supported accounts (Ledger 2) only.

Effective immediately, a Unit/Organization will be allowed to carry forward the equivalent budget for carried forward P.O.s only to the extent the entire carry forward budget (Encumbrance and Budget Balance Available/Variance) is under the 2.5% carry forward cap.

If the University Supported encumbrances exceed 2.5% of a Unit/Organization’s Annual/Current Budget, the Unit/Organization will be limited to carry forward an encumbrance budget of only 2.5% of its Annual/Current Budget regardless of the total encumbrance being carried forward. In addition, no Budget Balance Available/Variance carry forward will be allowed.

Encumbrance carry forward budget will be provided in the same manner as in the past. However, if the Unit/Organization’s encumbrances exceed the 2.5% cap, the excess will be taken away from the carry forward account.

If you believe that you have a valid reason to carry forward encumbrance budget above the 2.5% cap, please send a request for additional encumbrance budget carry forward with justification to your budget analyst and the Provost’s Office or the office of the Executive Vice President for Administration & Chief Financial Officer.