State of Hawaii Enterprise Financial System

Money Talks is a recurring series that breaks down the basics of public sector accounting, finance, and their real-world impact on the EFS Project and the State of Hawaii. In this session, we’ll discuss “purchase orders.”

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What is a Purchase Order?

Before exploring “purchase orders,” the topic of encumbrances will be revisited, followed by a discussion of how they’re connected.

To quickly recap, an “encumbrance” is a financial commitment to reserve funds for future expenses, typically when a purchase order is issued or a contract is signed. At the State of Hawaii, departments are required to follow statutory and administrative procurement procedures and regulations to obtain necessary goods and services. State departments must also ensure funds have been appropriated, allotted, and are available for use. 

Regarding the State’s procurement procedures, once an award or final approval is granted to purchase goods or services from a selected vendor, funds are encumbered, typically through a purchase order (P.O.) or an executed contract. The awarding department then provides the vendor with the P.O. or contract, which serves as authorization for the vendor to proceed with the delivery of goods and services.

About Alan Visitacion

With more than 30 years of experience in public and private accounting across the healthcare, nonprofit, and government sectors, Alan brings extensive knowledge and experience to his current role as the Accounting System Manager of the Pre-Audit Branch for DAGS’ Accounting Division. Prior to joining DAGS, Alan had a brief stint with the County of Maui then later continued his career in public service with the Hawaiʻi State Judiciary, where he was part of the centralized financial services division that oversaw the daily operations of the Judiciary’s accounting system, which included payroll, accounts payable and receivable, reporting, and the annual audit and reporting for the State’s Annual Comprehensive Financial Report (ACFR).   

Originally from “The Valley Isle,” Alan is a graduate of H.P. Baldwin High School and holds a Bachelor of Arts in Business Administration from the University of Puget Sound and a Master of Business Administration from Hawaii Pacific University.