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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 Purchase Order. It is a commitment to expenditures for supplies, service or equipment. The lien amount appears at the Fund-DPA level in the Lien column in the WebLinks GL Transaction Detail report. An encumbrance/lien is established at the time the Purchase Order is issued in PeopleSoft.
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
P2P Purchase Order
UCSF P2P Requisition/purchases
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) - Speedchart
UCSF Department
No
Agreement Vendor Purchase Order
UCSF Department
No
Independent Consultant Agreement (ICA)
UCSF Campus Purchasing
No
Vendor Contract
UCSF Campus Purchasing
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 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 non-P2P PO voucher is on payment hold awaiting departmental signature approval for amounts greater than $2,500.
How do I remove the remaining balance of an encumbrance/lien?
A. Lien Removal Request Form
Effective February 25, 2008, any lien removal requests can be submitted via email directly to CPBC at LienRemoval@ucsf.edu. Complete the PO Lien Removal Request Form. The PO should be reviewed with the requester of the goods/services and the Buyer to ensure there is nothing pending on the order. After department review submit your request for lien removal. Your request will be processed within 7 business days from receipt. Any questions regarding this lien removal process should be directed to Vanessa Wong, CPBC Director of Operations, at (415) 502-3002 or vanessa.wong@ucsf.edu.
B. Informing AP that an invoice is “Final” to remove lien balance
Effective April 15, 2009, departments can indicate Final Invoice directly on the invoice (in large letters at the top of the invoice) whenever it’s determined that the invoice is the final payment to be made against the lien and that the PO remaining amounts are not needed for both goods and services. A signature is required indicating that the department has verified the Ledger and determined that the invoice is final. Accounts Payable will then process the invoice as “final” which will automatically close the PO and liquidate the remaining lien balance.
To request AP to denote an invoice as “Final” after the invoice payment has been made and is reflected in the ledger, follow these steps:
- Email A/P at invoiceapproval@ucsf.edu
- Include the following information in the email:
- Voucher ID
- Vendor name
- PO number
- State if the referenced final invoice is for an entire PO or for specific PO lines; if the latter, reference the specific lines affected
How do I transfer the lien balance to any fund?
- For P2P PO that belongs to department buyer, review section IV 4.0 of the Manage PO Manual.
- For PO for which CPBC buyer is the buyer of record, please complete the Change Order Request Form and submit to purchasing@ucsf.edu.
Policy - Disbursement: Encumbrance Accounting http://www.ucop.edu/ucophome/policies/acctman/d-371-21.html
This page last updated on: Saturday August 29 2009