what does "encumbered expense" mean in a contract?

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I see a contract for $686K total

The amount spent to date around $74K and the "encumbered amount" is $147K. Is that simply money held aside for the next payment?

thanks
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Jaime Weisberg

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Posted 7 years ago

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Yes. Encumbered amounts are the amounts committed to pay for goods and services a government contracted for but did not yet receive. Encumbrances outstanding at year-end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitment will be honored during the subsequent year.