ENCUMBERED definition in the Cambridge English Dictionary

Reappropriations extend the originally specified period of availability for unused budget authority that has expired or that would otherwise expire. Generally, that reappropriated budget authority is for the originally stated purpose, but sometimes it can be used for a different purpose. Budget authority, obligations, and outlays are related terms that describe the funds provided, committed, and used for a program or activity. In Hong Kong, for example, the seller of a property is legally required to inform the real estate agent about any encumbrances against the property in order to avoid any problems later on in the sales process. The real estate agent will provide the buyer with a land search document that will have a list of any encumbrances. In some cases, unencumbered assets do not have a predetermined owner if the assets are liquidated in bankruptcy.

In general, the fair-value cost that private institutions would assign to credit assistance on the basis of market prices is greater than the cost reported in the federal budget under FCRA procedures. When those programs’ collections exceed their spending, the Treasury uses the surplus cash flows to fund other federal activities, and the trust funds are credited with a corresponding amount of Treasury securities. Offsetting collections are used for specific spending programs and are credited to the accounts that record outlays for such programs. Fish and Wildlife Service issues permits to import or export some species of game animals. The fees for the permits are considered offsetting collections because they cover program costs.

Sponsor Payments

For Purchase Order and Travel Authorization encumbrances, when the vendor or employee is paid, part or all of the encumbrance is released in accordance with that payment. The department will see a transaction that will appear under their Actuals (AC), separate from their Encumbrance (EX/IE/CE) debit/credit transactions. An Encumbrance is a type of transaction created on the General Ledger when a Purchase Order (PO), Travel Authorization (TA), or Pre-Encumbrance (PE) document is finalized. When an encumbrance is established, the organization’s financial manager should ensure funds will be available for payment of the transaction, in accordance with the overall life-cycle of the contract. As a share of all federal outlays, discretionary spending has dropped from 60 percent in the early 1970s to 30 percent in recent years. Almost all defense spending is discretionary, and about 15 percent of pandemic-related spending was classified as discretionary.

• Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology.
• The lender, generally a bank, retains an interest in the title to a house until the mortgage is paid off.
• Cost-of-living adjustments for Social Security and other programs, for example, are set on a calendar year basis.
• While the title does not change hands, what the owner can do with the asset or proceeds from the sale of the asset is limited by the extent of the lien on the assets.
• Offsetting collections are used for specific spending programs and are credited to the accounts that record outlays for such programs.
• The creditor can then sell the property to recoup at least a portion of their loan.

Report users can use this encumbrance indicator to evaluate their available balances and solvency concerns, at budget or fiscal year end. The Congress can also supplement regular appropriations that have already been enacted. In 2020, for example, lawmakers enacted four laws that provided supplemental appropriations in response to the coronavirus pandemic to give financial assistance to individuals, businesses, and other entities. A lease is an agreement to rent a property for an agreed-upon rate and period of time.

Prepare Fiscal Reports

Recent research conducted by GASB shows a lack of
consistency among governments in reporting the components of fund
balance and that the components are often misunderstood by financial
statement users. It is often unclear if any of the reserved or
designated fund balances are available to help balance encumbrance accounting a
government’s budget. Many
state and local governments are experiencing revenue shortfalls and
are facing difficult decisions in balancing their budgets. One
option some governments have is to use a portion of fund balance to
offset revenue declines and balance the current-year budget.