3710.05.02  OBLIGATIONS

The guidelines of State accounting require that budget allotments be 
encumbered for the estimated amount of future expenditures.  The purchase 
document normally is used as the source document for recording 
encumbrances.  At June 30, any open encumbrances for which goods and 
services have been received by June 30 must be identified as obligations prior 
to recording expenditure accruals by fund.

In General Fund, all open commitments are accrued as expenditures 
regardless of whether they are encumbrances or obligations.  Agencies 
reporting accruals are required to note the amount of encumbrances included 
as accruals on the Accrual Worksheet and Report of Accruals (FAS Report 
SAM02).  The balance of the accruals are obligations.

In the Public Enterprise Funds, Trust and Lottery Funds, only obligations are 
accrued as expenditures at June 30.