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1. Encumbrance accounting allows you to reserve funds for an anticipated expense.  Budget checking records encumbrances, or the reservation of funds, in the commitment control budget and then reverses the encumbrances when actual expenses are recorded. Budget checking journal expense reports will reflect changes made to posted accounting distributions in the commitment control budget.  Commitment control options supported in Expenses include the ability to cancel or close unused travel authorizations and reverse the associated encumbrances. Budget checking exceptions are transactions that fail budget checking validations. These exceptions may be errors or warnings. Errors prevent the system from recording the transaction. Warnings allow the system to record the transaction but inform you of the exception conditions.  You may view these exceptions to determine the cause of the failure through Expenses or through the Commitment Control menu. Navbar > Navigator > Commitment Control > Review Budget Check Exceptions > Travel and Expenses.
2. Expense transactions may fail budget checking for a variety of reasons and they may fail against one or more budget ledgers. They may fail because:
   • The ChartFields in the accounting distributions are incorrect;
   • There are insufficient funds to support the expense;
   • The budget is permanently or temporarily closed.
   • The project dates are out of bounds.
3. You are required to budget check travel authorizations and expense reports.  If there are multiple approvers, only the first approver is required to budget check successfully prior to approval. If a subsequent approver modifies any of the accounting details, budget checking is required again to reflect the changes.
4. If you do not enable the options on the Expenses Options page (only available to ERP Support) to enforce budget checking during approvals, you can approve transactions prior to budget checking and you can perform budget checking at any time during the approval process. However, Expenses requires you to budget check these transactions prior to Posting liabilities and Staging for Payment. The system will not create or post accounting entries until the budget checking status is Valid. You can budget check expense transactions individually online (during approvals) or in batch through the Batch Budget checking process. Only approvers can budget check online through the approval page(s).
5. The budget date determines the budget period that you record or liquidate encumbrances. Expenses uses the following rules to determine which budget date to use for travel authorizations and expense reports:
   • Budget date in the travel authorization defaults to the accounting date, which you typically set to the system date;
   • Budget date in the expense report defaults to expense report accounting date.
6. The accounting date determines the fiscal year and accounting period that the system records or liquidates encumbrances. When you liquidate travel authorizations through the expense report budget checking process, the system records the liquidations in the fiscal year and accounting period derived from the accounting date of the expense report.  When you cancel travel authorizations, the system records the encumbrance reversal in the current open period. You must select ‘Change Accounting Date’ and update the accounting date to the current open period, in order to process the Cancel Travel Authorizations.
7. The rule for determining when a travel authorization, expense report, or journal expense report, is eligible for budget checking is based on several factors. Transactions are eligible for budget checking if:
   • The transaction was previously budget checked but is now being cancelled or denied;
   • The amounts or distribution information were previously budget checked but were modified;
   • The transaction was previously budget checked but is now being returned to the originator for revisions;
   • The payment for an expense report is cancelled and voided (not to be reissued).
8. You may individually budget check travel authorizations and expense reports online through the Expenses Classic Approvals navigation. Navigation: Travel & Expenses > Approve Transactions > Approve Expense Transactions.
9. Online liquidation of travel authorization encumbrances occurs when you associate a travel authorization to an expense report. The following rules apply to online liquidation of travel authorizations.
   • If you create an expense report by copying from a travel authorization and accept all of the expense transaction lines, then the system liquidates the entire amount of the travel authorization.
   • If you create an expense report by copying from a travel authorization and delete some of the lines, the system liquidates the lines that are matched in the expense report; however, the system does not liquidate lines that you deleted before the expense report was budget checked. In this case, the system will fully liquidate the remaining encumbrances during the next batch budget check.
   • The system liquidates amounts based on the original travel authorization encumbrance amount. If you add new lines on an expense report, it will not have any effect on the liquidation of travel authorization encumbrances.
10. If an approver, project manager, or auditor denies an expense report at any point in the approval process, the system restores encumbrances for the associated travel authorization. If you delete an expense report, Expenses restores the travel authorization and makes it available for another expense report. (If you need to Close an Expense report, make sure you remove the linked Travel Authorization first, or it will not be eligible to be linked to a new Expense Report).
11. Some transactions in Expenses automatically perform budget checking under certain conditions and only if the transaction was previously budget checked. The budget checking process automatically executes to reverse the amounts when:
    • An approver or auditor returns a travel authorization or expense report to the employee for revisions.
    • An approver or auditor denies a travel authorization or expense report.
    • You cancel a travel authorization through the Cancel Approved Travel Authorization page using the Employee Self-Service navigation.
    • An administrator or authorized user uses the Rollover Travel Authorization process to move encumbrances from one fiscal year to a new fiscal year. Budget checking under these conditions reverses amounts originally recorded and removes any previous budget checking activity from the processing logs.
12. You can configure your expense system with multiple approvers and auditors. When there are multiple approvers, only the first approver needs to budget check the expense transactions. Subsequent approvers do not need to budget check the expense transactions unless they make a change to a distribution line, or delete or add expense transaction lines.
13. When an approver makes changes to a distribution or expense transaction line, Expenses tracks the change activity and displays the Budget Options link when budget checking is required. If you enable the option to require budget checking during approvals, the system inactivates the Approve button until the transaction is successfully budget checked.
14. When an approver denies a travel authorization or expense report, the system automatically budget checks the transactions to reverse the recorded ledger amounts. When there are multiple approvers and one approver denies the transaction, the other approvers cannot reverse the denied status by approving it. When an approver denies an expense report that the employee created from a travel authorization, the system reinstates the encumbrances for the travel authorization. The system reinstates the travel authorization, making it available for the employee to use on a different expense report. In order to liquidate the encumbrances, you must cancel the travel authorization.
15. When an approver or prepayment auditor encounters a budget exception that requires changes to distribution ChartFields or transaction line amounts, they may have access to the accounting distribution lines to make the change, if not, they will need to use the Send Back approval action to send the document back to the submitter to be modified.
16. Organizations may need to modify the distribution ChartFields or transaction line amounts that have already been recorded in the commitment control budget ledgers. An approver can have the authority to change the accounting distributions or amounts that have already been budget checked. If they make any changes, the transaction must be budget checked again to reflect those changes. If they are not successfully budget checked, Expenses does not allow you to post the liabilities for these transactions.
17. The Modify Approved Transactions functionality enables authorized approvers to approve or deny an expense report. However, the system may allow approvers to make changes that may require budget checking.
18. Use journal expense reports to make changes to accounting distributions for expense transactions that you have already posted. If you make a change through this feature, you must budget check the changes that you have made.  
19. Process complete.