Lease Payment Information
Non-Purchasing Agreement (NPA) documents are no longer created for real estate lease agreements/contracts. The payments of these leases are made on a Direct Charge document.
Elimination of the NPA results in the removal of all liens associated with these agreements/contracts. For those departments who wish to maintain encumbrances for these agreements, we have included information below.
Payment Procedures
Follow these steps to initiate a lease rental payment:
- Initiate a Direct Charge (DC) document
- The lease agreement number must be entered in both the Payment Purpose Text and the Tracking Num field
- Use object code 5121 on the accounting line
- Once the DC is complete, record the document number on either a hard copy invoice or the Request for Document Action form
- Send the original invoice or document action form to Capital Asset Accounting
Capital Asset Accounting will be approving all lease rental payment documents. (
Note: DC documents for lease payments that do not meet the above criteria will be disapproved.)
Encumbrance Procedures
Departments may now create liens for real estate lease agreements/contracts by using the Departmental Encumbrance (DE) document.
- A DE can be created for any period of the lease (current fiscal year, partial year, multiple years).
- When a Direct Charge document is initiated for the lease rental payment, a DE should also be initiated at the departmental level to reduce the existing lien for the lease agreement by the amount of the DC payment.
- The DE lien reductions can be completed monthly, quarterly, or according to any schedule determined useful by the individual department.
- If the account or accounts to be used for the lease payments change, the department will initiate a DE document to completely remove the remaining lien on existing account(s) and will initiate a new DE document to establish the lien on the new account(s).
For more on using the Departmental Encumbrance (DE) see the
online reference manual.
For further information about this process, contact Capital Asset Accounting or General Accounting. Questions related to encumbrance issues should be directed to Alyse DeFazio, General Accounting.