A. An encumbrance document shall be processed in the state’s accounting system before a budget unit issues a purchase order or encumbrance document against appropriations to cover an obligation, actual or anticipated, except that encumbrance documents are not required for reimbursements to employees for travel or other expenses incurred, gross payrolls and related employee expenses of a budget unit, eligibility payments, required payments that are not discretionary, or, under procedures prescribed in the state accounting manual of the department of administration, for expenditures not exceeding five thousand dollars. Copies of these documents shall be submitted immediately to or entered into the state accounting system of the department of administration. The budget unit shall certify that the proposed expenditure is authorized by appropriation and allotment and that the amount involved does not exceed the unencumbered and unexpended balance of the appropriation as recorded in the state’s accounting system. If any proposed certified expenditure is found to exceed the unencumbered and unexpended balance or to be contrary to this chapter or any other law, the head of the budget unit or his designee shall disallow the proposed expenditure. If the encumbrance is found to be in order, it shall be immediately submitted or electronically transmitted to the department of administration central accounting system, which shall not accept an encumbrance in excess of the appropriation. The amount of the encumbrance shall be set aside to be used exclusively for payment of the claim when presented. If an adequate appropriation balance is not available, the accounting system shall reject the transaction.
Terms Used In Arizona Laws 35-151
- Allotment: means the allocation of an appropriation or other fund source over a full fiscal year within a budget program or expenditure class. See Arizona Laws 35-101
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Budget unit: means any department, commission, board, institution or other agency of this state receiving, expending or disbursing state monies or incurring obligations against this state. See Arizona Laws 35-101
- Claim: means a demand against the state for payment for either:
(a) Goods delivered or, in the case of highway construction, goods or facilities to be delivered by the federal government. See Arizona Laws 35-101
- Encumbrance: means an obligation in the form of any purchase order, contract or other commitment that is chargeable to an appropriation or any other authorized fund source and for which a part of the fund source is reserved. See Arizona Laws 35-101
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Purchase order: means a document that is signed by the appropriate agency authorized signatory, that requests a vendor to deliver described goods or services at a specific price and that on delivery and acceptance of the goods or services by this state becomes an obligation of this state. See Arizona Laws 35-101
B. The department of administration may require encumbrances for all funds of the state, except for the investment of public monies or permanent endowment funds, which are not appropriated but are held in custody by the state treasurer.
C. No encumbrance document may be approved by or for any budget unit that will involve an expenditure of any amount in excess of the unencumbered and unexpended balance of the appropriation or fund source to which the resulting expenditure will be chargeable.
D. Notwithstanding subsection A of this section, an expenditure under section 35-191 shall be encumbered regardless of the dollar amount of the expenditure.