Establish and Maintain Encumbrances (30.2)

Business Process Overview

The Establish and Maintain Encumbrances business process is within the Disbursement Management (DM) business process grouping. DM includes a collection of business processes that:

• Manage Supplier information, including demographic and payment information for tax withholding and reporting purposes.
• Support the disbursement process for State obligations from encumbrance through payment request, payment creation, and Escheatment; and
• Perform month-end and year-end closing activities.

Encumbrances are used to obligate Agency Appropriationss for goods or services ordered and subsequently are unobligated when the goods or services are received and approved for payment.

The business subprocess included are:

• 30.2.1 – Create and Maintain Encumbrances
• 30.2.2 – Monitor Encumbrances
• 30.2.3 – Establish Enterprise Encumbrances

State procurement activity, including the creation of Purchase Orders, is handled through procurement systems outside Florida PALM. These POs, are generated primarily from MFMP, are used to communicate to Supplier an order for goods or services. All procurement activities including the creation of POs and the approval of goods and services received occur outside Florida PALM. Florida PALM uses interfaces from MFMP (and other Agency Business System, as applicable) to obtain the necessary data to create and update encumbrances. The basic information needed to establish an encumbrance in Florida PALM includes the supplier ID, a valid ChartField String, and an amount. A Grant, Contract, or Project number may also be included to associate the encumbrance to a grant, contract, or project.

Creating a manual encumbrance requires the Agency Encumbrance Processor to enter the same information that is provided by MFMP and the agency business system for adding an encumbrance. A Budget Check is required for all encumbrances.

In Florida PALM several actions can be taken on a PO/encumbrance: approve, unapproved, cancel, close, dispatch, and delete. Only POs that are approved or pending cancel can be dispatched. Budget Checking a PO creates the encumbrance and dispatching in Florida PALM makes the PO available for vouchering. Closing a PO makes it unavailable for future processing. 

PO/Encumbrance Statuses available:

• Open: PO is created and saved but not submitted for approval.
• Pending Approval: The PO is submitted for approval and has not been approved yet.
• Approved: The PO has been approved by all levels of approvals defined within the PO Workflow.
• Dispatched: The PO dispatch process has been run and the PO is ready for Vouchering.
• Canceled: The PO has been canceled.
• Pending Cancel: The PO has been canceled, but the dispatch process still needs to be run to complete the cancellation.
• Closed: The PO Close process has been run to close the PO as it is no longer needed. If it has an encumbrance balance, it is liquidated to zero when the PO is closed. 

PO Hold:

A PO/encumbrance can be put on hold by selecting the "Hold From Further Processing" check box on a PO/encumbrance. After you place a PO/encumbrance on hold, the system prevents you from performing the following actions:

• Approving a purchase order.
• Dispatching a purchase order.
• Canceling a purchase order.
• Closing a purchase order.
• Deleting a purchase order (at header level).

Dependencies and Constraints

Dependencies and Constraints describe any conditions or criteria that impact how or when the business process should be executed. These could be set within Florida PALM or from external sources (i.e., Law or Rule).

• An encumbrance must be interfaced from a PO created in MFMP or an agency business system, loaded using an encumbrance spreadsheet upload, or manually created in Florida PALM.
• A valid supplier ID must exist to create an encumbrance.
• An encumbrance requires sufficient budget authority to be created.
• An encumbrance manually created in Florida PALM is subject to the approval process.
• Errors are reported to the source system or online when manually entering the transaction.
• Agencies may request that an encumbrance be created through an interface or Spreadsheet Upload be subject to the approval process.
• A valid budget check consumes budget and adds the encumbrance to the Encumbrance Ledger, within the Commitment Control Module.

Agency Configurations

The table below identifies the Agency Configurations related to this Business Process. These items are not included within the Business Flow Diagrams; however, these items are important elements of each Business Process.

Conversions

The table below identifies the Conversions related to this Business Process. These items are not included within the Business Flow Diagrams; however, these items are important elements of each Business Process.

Note: A complete list of conversions may be found in the Conversions Catalog.

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