For which types of items do governments typically not use encumbrance accounting?

Encumbrance accounting is a method used by governments to reserve funds for future expenditures, primarily to ensure that budgeted resources are available when obligations are incurred. Governments use encumbrance accounting to track commitments related to capital expenditures, routine items, emergency expenses, and luxury purchases, as these can all represent future financial obligations.

Routine items are generally those that are expected and recurring in nature, such as standard supplies and predictable maintenance expenses. These costs are usually managed with a straightforward budgeting approach, without the need for encumbrance accounting, which is more suited for larger, less predictable, or one-time commitments. By not applying encumbrance accounting to routine items, governments can streamline their budgeting and accounting processes, focusing on more complex or significant expenses that require tracking and reservation of funds.

In contrast, capital expenditures, emergency expenses, and luxury purchases are often significant and might require the government to commit funds in advance to ensure that resources are available when needed.