§ 106.414. Encumbrances.

(a)

An appropriation shall be obligated for expenses properly chargeable against it as soon as the expense, or the liability therefor, is incurred. The Director of Finance and Administration shall establish an encumbrance system where appropriate that will accomplish this obligation and shall prescribe methods of documentation so that an adequate audit trail is available to the Accounting Division and to the Council Auditor as to the placing, modification and satisfaction or release of encumbrances. Once encumbered, appropriated funds shall be considered obligated and unavailable for expenditures (except to satisfy the encumbrance), transfer or reappropriation, and obligated balances of appropriations, remaining undisbursed at the close of the fiscal year, shall be treated as provided in subsection (b) of this Section. An encumbrance may be modified either to increase or to decrease the amount of funds encumbered by it, but no increase in an encumbrance shall be larger than the amount of unobligated funds then remaining in the appropriation account. An encumbrance may be released, in whole or in part, to the extent that the funds so released are not needed to pay the expense for which they were encumbered, and the funds thus released shall become unobligated funds in the appropriation account, except funds released from an encumbrance which is carried over from a prior fiscal year, which shall be treated as provided in subsection (b) of this Section.

(b)

The encumbered balance of an appropriation account at the end of the fiscal year shall be carried over to and become a part of the appropriation account for the ensuing fiscal year; provided, that the encumbrances outstanding at year end represent the estimated amount of the expenditures ultimately to result if unperformed obligations in process at year end are completed. The carryover of an encumbered balance shall not release or discharge the encumbrances, but it shall be subject to the provisions of subsection (a) of this Section in the ensuing fiscal year; provided, that funds released from an encumbrance which is carried over shall become unappropriated funds in the beginning fund balance for the ensuing fiscal year. Encumbered balances carried over to the ensuing fiscal year shall not be reported as expenditures for the previous fiscal year, but as reservations of fund balance for subsequent fiscal year expenditures.

(Ord. 79-1227-657, § 2; Ord. 83-591-400, § 1; Ord. 2016-140-E , § 16)

Editor's note— Ordinance 2007-839-E, § 18, authorized updated department/division names pursuant to reorganization.

Note— Former § 126.414.