Every position that is encumbered has an Encumbrance Definition (Enc Def) similar to the Department Budget Table (DBT) that tells the system what items to encumber and to which ChartString they should be encumbered. This includes certain earnings and certain labor related costs (taxes and deductions). To encumber salaries the system uses information in Job Data for filled positions and Position Data for vacant positions. Maintaining the Enc Def can be a significant effort so the Encumbrance Maintenance (Enc Maint) customization was developed to do that maintain for districts.

As part of the customization districts are now able to define which earnings codes are accrued and which are not. For example, most districts do not want to include retro pay (RRP) in calculating encumbrances. The HCM query M_ENCUMB_TAX_EARNINGS will list your district’s additional earnings that are to be encumbered. The Enc Maint runs after payroll expenses are distributed, and it updates the information in the Enc Def. This new Enc Def information is then used to recalculate and update the encumbrances.

Each July we run the Fiscal Year Baseline Encumbrances in HCM, this is an annual process to establish the fiscal year encumbrances for a district.

Several encumbrance processes are run in HCM after payroll confirm and expense distribution are complete. These processes include the following items:

1. Encumbrance Maintenance – updates the Encumbrance Definition with deduction and tax amounts and chart strings from the current payroll run. This process also updates the Encumbrance Definition with additional earnings amounts and chart strings that need to be encumbered (e.g. Auto Allowance, Café-Plan Cash, Expense Allowance, etc.) from the current payroll run.
   
   
2. Encumbrance Calculation – calculates encumbrances and pre-encumbrances based on changes in HCM and the current payroll run.
   
   
3. Encumbrance GL Interface – encumbrance amounts for pay groups xxM and xxE are sent to Finance Commitment Control Ledgers and updated on the HCM Review Budget Actual screen. This process is only run for pay groups xxM and xxE (where xx is the district).
    
4. Budget Check – in Finance these encumbrance transactions are budget checked which updates the Commitment Control Ledgers to update the encumbrance amounts seen on the Budgets Overview page and in queries that include encumbrances.