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Ail "continuing contraCts'' automatically encuinber the appropriation!; for the new budget yc.a~' on Ju:ly 1. o[' that budget year, to the e×tent that thc Cm%tr~C'.t Can legally be fulfilled in the l%ew year by th,: oLher contracEing party. There are two options for handling purchase orders and other contracts out:~tanding at the end of the fi:ncal year. TI%ese 1. Continue to encumber the appropriation and pay the 2. Cancel open purchase orders as of June 30 as the follow.lng day - July 1. The first of the two options listed above will be followed for all out the previous ye,Ir. The following procedur~ will 1. The purchase order or contract will be held as an outstanding encumbrance until Augu~:t 15th. 2. On August 15th, all purchase orders that are outstanding from tho previous year will be voided. 3. For prior year merchandise received after August 15th, a now purcha&:e order will be required along with a budget Covl~;lon form specifying how tho ctc. partmont pl[lns to pay approved Delete the invoice will be paid. These procedures are designed to encourage departments to either be certain tight orders pl,]cod befoYe 0une :~0th will be uec~.,ived prior to August 15th or to budget these year-e~d items in tho apl)uopriatc Dudqet to insure that funds are available when the order is received. The latter can be accompli~:hod by using the wording listed racier the "continuing contract:? section above on the Eace of the purchase order. This clause will allow an order to be placed prior to Jun~ 30th but charged to tho new budgnt year. To implement thin system the ~'inance Department will consldar ail p~rchase orders markod in this manner as "continuing contracts" a~d will encumber thrum appropriately. 14 /0