Encumbrance Reporting and Lapsing of Appropriations (APS 018)

USAS Requirements

USAS Encumbrance Funding Edit Control

Agencies reporting only to USAS record encumbrances into USAS when obligations are made. The ENC field on the Appropriation Number Profile (20) establishes the encumbrance funding edit control type indicator. The ENC field is set to 2 (Advisory – Warning message appears if the remaining encumbered basis budget or the appropriation encumbered cash available is exceeded) for all active appropriations.

Payable T-codes in USAS

Fiscal Year Considerations

Enter payables with an effective date of Aug. 31 or Aug. 32 to post to the prior fiscal year. Transactions backdated to the prior fiscal year during September may be entered with an effective date of either Aug. 31 or Aug. 32. Transactions backdated to the prior fiscal year after Sept. 30, when month 12 is closed, must be entered with an effective date of Aug. 32. When requesting year-end reports, remember to request period 13.

Vouchers payable transaction codes will generate T-codes that will post the cash transactions in the current fiscal year (see USAS Binding Encumbrances and Payables T-codes). In addition, any previous year payables that have accrued but are not ready to be paid should be entered with T-code 420 and an effective date of Aug. 31. T-code 420 will generate T-code 421 in the current fiscal year to reverse the payable.

Accrued Reimbursements for Institutions of Higher Education

Accrued reimbursements from appropriated funds to local funds (T-codes 246/903 for payroll, 247/904 for non-payroll and 264/905 for non-payroll, interest eligible) should be entered with an effective date of the reporting period’s last day. Any reimbursements that have accrued but are not ready to be paid until after the end of the period should be entered with T-code 420 and an effective date of the reporting period’s last day. T-code 420 will generate T-code 421 in the current fiscal year to reverse the payable.

Professional Fees and Services

The Professional Fees and Services Report (DAFR8960) needs to provide accurate information for annual financial reporting purposes. The payee identification number must be included on transactions entered with T-code 420, including any Comptroller Object Code Profile (D10) that rolls up to Generally Accepted Accounting Practices (GAAP) Source Group 0220 (Professional Fees and Services).

Encumbrance T-codes in USAS

If an agency does not record encumbrances into USAS when obligations are made, an entry must be made at the end of the first three quarters and year-end using T-code 207 to record the encumbrance amount. T-code 207 records the encumbrance in the previous period (the period’s ending date must be used for effective date) and reverses with the generated T-code 211 so the encumbrance is not reflected in the current period.

If an agency uses T-code 210 to record encumbrances throughout the year, no entry is necessary at the end of the first three quarters and year end. At time of payment, the agency uses T-code 231 to record a payable, liquidate the encumbrance and make payment. (T-code 217 is used to cancel an encumbrance.)

Binding Encumbrances and Payables Coding Block in USAS

Binding encumbrances and payables must be entered by appropriation number, appropriation year, fund, program cost account (PCA) and comptroller object (COBJ) for all appropriated funds. Agencies must ensure encumbrance and payable transactions post to PCAs that point to the correct program code in USAS and use the comptroller objects that roll up to the correct LBB object code for all expenditures required to be reported on the LBB’s ABEST system.

See USAS Summary Comptroller Objects Sorted by LBB Object for a list of comptroller objects that may be used as “summary” object codes for encumbrance and payable transactions. These comptroller objects are considered summary object codes only for reporting binding encumbrances and payables required by this document. See the following Comptroller object impact section below for a discussion of when the use of summary object codes is appropriate.

Comptroller Object Impact in USAS

Appropriations of Funds Held Inside the State Treasury

Agencies may enter summary comptroller objects for encumbrance transactions posting to appropriations of funds held in the state treasury. T-codes generating warrants must use specific detail object codes, while T-codes that accrue or reverse (i.e., T-code 420) may use summary object codes.

Funds Held Outside the State Treasury

Agencies with appropriations of funds held outside the state treasury may enter binding encumbrances and payables with summary comptroller objects but should consider how this affects their AFR. Comptroller objects used for these purposes must be correct with regard to LBB objects and GAAP source/objects.

Texas Public Educational Grants Programs and Skiles Act Revenue Bond Retirement must be entered with the appropriate PCA, T-code 642 and comptroller objects 7593 or 7591. Local funds should use T-codes that reverse, not T-codes that liquidate.

Note: Per Requirements for Local Operating Funds and Associated Local Funds (FPP S.009), local USAS operating and operating trust funds are not subject to the lapse and encumbrance provisions of APS 018. They are still subject to the Reporting Requirements for the Annual Financial Reports for payables and accruals.

Fund Cash Forward in USAS

Fund cash balances not required for payment of outstanding obligations from previous years should be moved to the current year (if authorized by statute or the GAA). Again, the balances may be moved forward to the current year, one year at a time (i.e., to move AY 2021 balances to AY 2023, move 2021 to 2022 then 2022 to 2023). Enter the coding block with Document Type J, Batch Type 2 or 8:

Note: * The comptroller object for the collected budget portion of the transactions above should be based on the type of funds transferred. Comptroller object 3974 is for federal funds and 3975 is for regular revenues. Comptroller object 3986 is for unexpended balance forward-operating transfers in and 7986 is for unexpended balance forward-operating transfers out.

Once the transfer out is completed, there should not be a negative balance on the USAS 62 screen.