ID S1208

Repeals existing Section 67-3521 and replaces it with new provisions defining and regulating encumbrances of state appropriations.

Defines an encumbrance as a reservation of appropriation carried forward between fiscal years to fulfill legal obligations from signed contracts that cannot be completed until the next fiscal year.

Exempts purchase orders issued by the state purchasing agent from requiring administrator approval, but requires all other encumbrances to be approved by the division of financial management administrator.

Requires encumbering agencies to identify accrued costs and legal obligations covered by available, unobligated cash in the fiscal year of approval, and allows the administrator to reduce or cancel any encumbrance as necessary.

Effective July 1, 2020, encumbrances approved on or after that date are counted as expenditures against the following year's total appropriation and must be liquidated within one fiscal year or revert to the originating fund.