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 “encumbrances.”

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What is an “encumbrance?”  

An encumbrance is a financial commitment to reserve funds for future expenses, typically when a purchase order is issued or a contract is signed. In state government, encumbrances are essential for keeping budgets on track by ensuring money is set aside for future needs, preventing overspending, and maintaining healthy cash flow. They also support long-term planning and ensure compliance, making it vital to track encumbered funds to stay transparent and responsible with taxpayer dollars.  

About LaDonna Rabun

LaDonna brings a decade of comprehensive accounting experience to her current role as the Functional Manager for the EFS Project. Specializing in accounting information systems, LaDonna holds a Master of Professional Accounting from Colorado State University and a Bachelor of Science in Business Administration and Accounting from the University of Colorado. Before serving on the EFS Project, LaDonna worked for the Department of Transportation, Harbors Division, where she supervised the Accounting Unit and gained valuable insight into the State of Hawaii’s current financial processes.