The director of finance shall establish and maintain an accrual system of accounting which shall reveal at all times not only the cash position of the city, by funds, but also the revenue and income anticipated and the encumbrances and obligations outstanding and unpaid. No city official or employee shall have authority to create an obligation against the city by oral agreement. Purchases shall be made by written purchase order signed by the purchasing agent, agreements for construction work shall be made by written contract, and agreements for personal services by written contract or appointment signed by the city manager or an administrative official of the city designated by him. No purchase order or contract shall be valid as an obligation of the city unless it bears a certificate signed by the director of finance that the estimated amount thereof has been entered as an encumbrance in the city accounts against an allotment based on a valid appropriation.