8300      GENERAL 
(Revised 3/87)

Allotment-expenditure accounting procedures provide fiscal control by presenting information regarding the status of the plan of operation. This information is available from the Allotment-Expenditure Ledger, which shows for each allotment: (1) the amount allotted, (2) unliquidated encumbrances, (3) expenditures, and (4) the unencumbered balance.

The Allotment-Expenditure Ledger is subsidiary to the following General Ledger Accounts: (1) Account No. 6150, Encumbrances; (2) Account No. 9000, Appropriation Expenditures (or other appropriate expenditure account); and (3) Account No. 8100, Reimbursements. The Allotment-Expenditure Ledger is reconcilable to the State Controller's appropriation and executive order accounts.

8301     ALLOTMENT-EXPENDITURE ACCOUNTS
(Revised 3/87)

Allotment-expenditure accounts ordinarily will be maintained in the same degree as shown in the Governor's Budget, except that salaries and wages will not be segregated by position classification. If it is necessary for the agency to exercise a greater degree of budgetary control, additional ledger cards may be maintained. For example, each district may be accounted as a sub-function in order to meet the agency's management needs even though the Governor's Budget does not show by district the amounts requested. If only expenditure data is needed in greater detail than the Governor's Budget, transactions will be coded in a single account. The additional analysis then can be obtained by reviewing the Allotment-Expenditure account at any time. Agencies may code allotments to facilitate posting. (See also Sections 6200 to 6227.)

8301.1     BUDGET ACT APPROPRIATION 
(Revised 3/87)

An Allotment-Expenditure Ledger card normally will be kept for each allotment shown below:

Field Operations*

Personal Services**
Salaries and Wages, 1st Quarter*** (A)
Salaries and Wages, 2nd Quarter*** (A)
Salaries and Wages, 3rd Quarter*** (A)
Salaries and Wages, 4th Quarter*** (A)
Temporary Help*** (A)
Overtime*** (A)
Retirement*** (A)
OASDI*** (A)
Health Benefits*** (A)
Workmen's Compensation*** (A) 
 
Operating Expenses and Equipment **

For each type of Operating Expense shown in Governor's Budget (such as General Expense, Printing, Communications, (etc.) and for Equipment*** (A)

For each function (and sub-function if such sub-function is shown in the Governor's Budget or if the further analysis by sub-function though not shown therein is necessary for proper budgetary control).

 *   This is a function. If function is further classified, such as by districts, each district would represent a sub-  function.
  **   These objects of expenditures are classed "categories" in the Budget Act.
 ***  These are allotments.

(A)  Balance of allotment column is a "plus".

Estimated Salary Savings*** (B)
Unallotted Appropriation*** (A)
(Identified as to category)
Budget Revisions Pending*** (B)
Allotments Promised*** (B)
For each appropriation
Estimated Reimbursements****
For each type shown in the Governor's Budget,
such as Services to Employees–Meals, Services
to Employees–Rental of Living Quarters, etc. *** (B)
Unscheduled Reimbursements*** (C)

8301.2     OTHER APPROPRIATIONS AND EXECUTIVE ORDERS
(Revised and Renumbered 2/65)

Allotment-expenditure accounts will be established also for appropriations not contained in the Budget Act and for Executive Orders not augmenting an appropriation. These allotments will be established in sufficient detail to meet the requirements of the agency. If the appropriation is by category, the allotments will be in at least that detail.

8301.3     BUDGETS NOT SPECIFICALLY APPROPRIATED
(Revised 3/87)

There are a number of other than Governmental Funds that are required to submit annual budgets for approval, and subsequent quarterly budget reports, but that operate out of their own operating funds and do not receive specific appropriations or executive orders. The budgets of these funds are shown in the appendix to the Governor's Budget but are not included in the Budget Act.

Allotment-expenditure accounting for these funds is the same as for Governmental Funds. Allotments will be established in the same detail as shown in the Governor's Budget. The only difference is in the documentation. There will be no Controller's Journal Entry officially establishing the budget, and some agencies may not be required to submit Budget Revisions or Transfers of Budget Allotment. In those cases, allotments will be recorded and adjusted by internal documents only.

1. The balance columns for Expenditures and Unliquidated Encumbrances must balance in total to control accounts in the General Ledger. The balance column for Unencumbered Balance must, together with Unliquidated Encumbrances, reconcile in total to appropriation and executive order account balances per the State Controller's Office records.
2. A summary card (not General Ledger card) will be maintained over the subsidiary Allotment-Expenditure Ledger. Entries should be made to the summary card by batch totals summarizing detail entries to individual cards. The detail cards will balance with the summary card. The expenditure balances shown on the summary card for all appropriations to an agency from a fund will balance with the related expenditure accounts for that fund in the General Ledger. The unliquidated encumbrances balances shown on the summary cards for all appropriations to an agency from a fund will agree with Account No. 6150, Encumbrances, for that fund. The unencumbered balance plus the unliquidated encumbrances balance shown on the summary card for each appropriation will be reconciled to the balance of the related appropriation account in the Controller's records.
3. Agencies that hand-post their Allotment-Expenditure Ledger will prove their postings by using an adding machine after each group of postings to a ledger card. The allotment balance always must equal the sum of the other three balances.
   Agencies will prove at the end of each month that the open estimates, including amounts encumbered for the lag, equal the amount shown by the Allotment-Expenditure Ledger as unliquidated encumbrances and the Encumbrances account in the General Ledger.
   

1. Requests to transfer allotments between appropriation categories.
2. Requests to allot amounts reserved in the Unallotted Appropriation accounts.
3. Requests to augment Estimated Reimbursements allotments and simultaneously augment expenditure allotments.

• Plus amounts in the allotment transaction column and will increase the balances of the allotment and unencumbered balance columns of the allotment being increased.
• Minus amounts in the allotment transaction column and will decrease the balance of the allotment and unencumbered balance columns of the allotment being decreased.

8340     ENCUMBRANCES
(Revised 12/05)

Encumbrances are commitments for expenditure and are estimated carefully to reserve the amount of the expected expenditures. Departments will consider the necessity for encumbering small transactions that comprise a small percentage of total expenditures. For example, individually encumbering small purchases can be time consuming; therefore, the average amount of small purchases outstanding may be included in "the lag." (See SAM Section 8342.1.)

Appropriations are encumbered by purchase estimates (provided the  Department of General Services (DGS) Purchase Order is dated prior to the date the appropriation encumbrance availability ceases), printing requisitions, payroll estimates, leases, standard agreements, Public Works Project Authorization and Transfer Requests, lag encumbrances, subpurchase orders, or  other documents.

The Victim Compensation and Government Claims Board Rule 610 provides that the issue date of an agreement determines the fiscal year appropriation to which the encumbrance/expenditure for goods or service is charged.  The issue date of an agreement is the date it is "made and entered into."  Any required control agency approvals are retroactive to that date.  However, departments must meet the deadlines for submitting procurement documents as specified by DGS.

For support and local assistance appropriations, encumbrances/expenditures are charged to the fiscal year in which the agreement was issued when the delivery date of the goods/service is in the same fiscal year or the delivery date is construed to mean as soon as possible.  As soon as possible includes a delivery date that is:

• Not identified or specific
• Specific but not a requested delay in delivery
• Specified as 10 days, 30 days, or the like

The following exceptions may apply:

• Encumbrances/expenditures are charged to the fiscal year that the goods/services are received when the purchase agreement stipulates that goods/services be delayed until requested or delayed until on or after a specific date (e.g., agreement issued in June for which the department requests equipment maintenance during the next fiscal year).
• Goods purchased and received in the months of May or June for use during the subsequent fiscal year may be paid from the appropriation for such subsequent fiscal year.  Invoices covering such purchases shall be marked as follows:  "Purchased in___F.Y. for use in___F.Y."  Payments for such invoices may not  be made until enactment of the subsequent fiscal year Budget.
• Multi-year Agreements - Agreements which span more than one fiscal year may be charged (1) totally to the first year of appropriation covered by the agreement, or (2) to more than one fiscal year's appropriation, depending on the:
  • Appropriation authority - Sufficient spending appropriation authority must exist.
  • Details of the agreement.

Department will determine the budgetary plan for charging the encumbrance and subsequent expenditure when issuing a multi-year agreement.  The budgeted amount will be reflected in the funding strip of the agreement.  Departments have discretion as to which fiscal year appropriation to charge; however, the budgetary plan is the predominant factor in making this determination.

The certificate of funds availability must be signed by the accounting officer or a delegate after such person has ensured that funds are available.

Encumbrances will be recorded individually in the Allotment Expenditure Ledger (AEL) or operating file (CALSTARS departments) for the appropriation. This entry will increase the unliquidated encumbrance amount and decrease the unencumbered balance.

As expenditures are recorded on claims, amounts will be posted to reduce the related encumbrance amount.  For partial orders, many automated systems will liquidate the encumbrance for the same amount as the expenditure.  However, if it is determined that encumbrance amounts are materially misstated, either over or underestimated, adjustments will be recorded to more accurately reflect the expected expenditure.  The encumbrance is fully liquidated when the order is fully satisfied.

Estimated decreases will be recorded as a minus amount.  This will decrease the unliquidated encumbrance amount and increase the unencumbered balance.

Encumbrances will be recorded in the General Ledger accounts as prescribed in SAM Section 10502.

1. Request for Purchase Order or Estimate Change, Std. Form 96, may be used, modified where necessary, with the appropriate explanation stated thereon. Agencies will prepare this form in original only, using it merely as an internal document. This form also may be used to adjust the lag, if necessary.
2. The lag at the beginning of the year may be reflected in the initial journal entry recording the annual budgetary allotments. The amounts allotted, amounts encumbered for the lag, and the unencumbered balances will be shown for each allotment concerned.

1. Traveling-in-state
   Specific encumbrance documents are not provided for traveling. Therefore, encumbrance will be necessary only for the amount for lag applicable. (See SAM Section 8342.1.) Agencies will encumber at the beginning of each year an amount equal to their best estimate of the amount of expenses actually incurred as of the end of a month but not reflected on the records because the traveling expense vouchers either have not been submitted or having been submitted have not been scheduled in claims for payments.
2. Printing, traveling-out-of-state, equipment and all other allotments where all commitments are made by individual estimate, authorization, or contract affecting only one fiscal year.
   
   Encumbrance will be by individual estimate, authorization, or other encumbrance document. The unencumbered balance, therefore, represents the amount available for placement of additional estimates.
3. Utilities and all other allotments, except traveling-in-state, where no encumbrance documents are prepared.
   
   Agencies will encumber at the beginning of each fiscal year an amount equal to their best estimate of the amount of expenses actually incurred as of the end of a month but not reflected on its records because the bills either have not been received or, having been received, have not been scheduled in claims for payment. (See SAM Section 8342.1.) No lag will be encumbered for Pro Rata General Administrative Charges.
4. General Expense and all other allotments where commitments are made both with encumbrance documents and without encumbrance documents.
   
   Encumbrance will be by individual estimates or other encumbrance documents. Agencies will encumber at the beginning of each fiscal year an estimate of the amount of expenses actually incurred at the end of the month for which specific encumbrance documents have been issued and which are not reflected, due to the delay in receiving invoices and scheduling claims for payment. (See SAM Section 8342.1)
5. Rent-building space
   Agencies will encumber at the beginning of each fiscal year an amount equal to commitments made that extend into that fiscal year, as shown on Standard Form for Leases, Std. Form 1 or Department of General Services Assignment of Space, Form G.S. 4091. Encumbrance also will be made to reserve funds for renewal of leases containing such an option if the agency intends to exercise this right of renewal. There is no standard form specifically devised for recording these encumbrances. Agencies will use Request for Purchase Order or Estimate Change, Std. Form 96, to itemize and summarize these commitments. This information will be scheduled on a work sheet to support the encumbrance document if items are numerous.