Understanding Encumbrance Rollover
The Encumbrance Rollover program (R4317) provides an automated batch process to enable the carryover of prior year's encumbrances into the current year. This must be done to ensure correct budgeting because any monies that are left over from the prior year must be rolled over into the current year or be lost. This program displays an accurate audit trail of these rolled-over amounts, as well as providing a report that displays the previous and new relevant information. The rollover reduces the manual effort that is required of employees who work in environments with a high volume of transactions.
The Encumbrance Rollover program:
Updates lines in the Purchase Order Detail table (F4311).
Cancel committed lines on a purchase order or subcontract to ensure that no further payment processing can be made against those lines.
For subcontracts, the purge code must be R. For purchase orders, the system updates the next status to 999 (closed).
Decommits (current year) and recommits (new year) accounts in the Account Balances table (F0902).
These lines are assigned to a new account that is created especially for this rollover. This account is controlled through the distribution automatic accounting instruction (AAI) 4430.
Creates an Audit Trail report (R4317).
Creates a history record in the P.O. Detail Ledger table (F43199).
Many industries use the term decommit to relieve commitments. When you relieve or decommit commitments and encumbrances, the system creates an RO ledger type record. You should not purge the RO records because they must be used to create or rebuild commitments.
Encumbrance rollover will be run as a batch program at year's end. Encumbrances at year-end represent the estimated amount of expenditures ultimately to result if unperformed subcontracts and open purchase orders in process are completed.
Typically, local governments and municipalities have the authority to expend their funds only for one fiscal year. As a result, purchase order and subcontract open balances are often canceled at fiscal year end. However, other approaches commonly used involve the recognition of these open balances and rolling them forward to the new fiscal year.