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ENCUMBRANCE/LIEN
What is an encumbrance or lien?An encumbrance or lien is an obligation incurred in the form of a specific Purchase Order. It is a commitment to expenditures for supplies, service or equipment and is ordinarily entered as a lien in the Encumbrance Ledger. An encumbrance/lien is established at the time the Purchase Order is originated by UCSF Campus Purchasing Department. The department Fund and DPA is debited and the Encumbrance Control account is credited.
An encumbrance or lien is established by the following types of purchase orders:
TYPES OF PURCHASE ORDERS
PO ISSUED BY
LIEN
Specific Purchase Order
UCSF Campus Purchasing Department
YES
Equipment Order = $2,500, specific purchase order issued
UCSF Campus Purchasing Department
YES
An Encumbrance/lien is not established from the following types of purchase orders:
TYPES OF PURCHASE ORDERS
PO ISSUED BY
LIEN
Low Value Purchase Order (LVPO)
UCSF Department
No
Agreement Vendor Purchase Order
UCSF Department
No
Library Material Order
UCSF Department
No
Equipment Repair Order
UCSF Department
No
Vendor Contract/ Blanket Order
UCSF Campus Purchasing Department
No
Equipment Order < $2,500
UCSF Department
No
Independent Consultant Agreement
UCSF Campus Purchasing Department
No
Travel Expense
N/A
No
How is an encumbrance/lien liquidated?
A voucher created in the PeopleSoft AP System from a vendor invoice against a specific Purchase Order reduces the amount of the lien on each Purchase Order line. When all the Purchase Order lines have been paid by vouchers, the entire encumbrance/lien on the specific Purchase Order will be liquidated. In PeopleSoft, lien liquidation is a result of a voucher created against the corresponding specific Purchase Order regardless if a check has been paid to the vendor. Thus, the liquidation of the lien does not represent payment to the vendor under the circumstance that the voucher is on payment hold awaiting departmental signature approval for amounts =$2,500.
How do I remove the remaining balance of an encumbrance/lien?
"...PO Lien Removal Effective February 25, 2008, any PO Lien Removal Request Form should be submitted via email directly to the CPBC Purchasing Mailbox at Purchasing@finance.ucsf.edu. The PO Buyer of Record or designee will review and remove the requested PO Lien by updating the purchase order accordingly within 7 calendar days from receipt of request. Any questions regarding these process changes should be directed to Hung Truong, Purchasing Manager, at (415) 502-3043 or htruong@finance.ucsf.edu..." (CPBC Announcement, February 14, 2008)
Policy - Disbursement: Encumbrance Accounting http://www.ucop.edu/ucophome/policies/acctman/d-371-21.html
This page last updated on: Wednesday June 04 2008