budgetary control and funds check in projects - a case study

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Budgetar\ Control And Funds Check in Projects R12: A Case Stud\ Using a Non-Integrated Budget [ID 1314706.1]

Modified 17-JUN-2011 T\pe WHITE PAPER Status PUBLISHED

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Abstract

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Budgetar\ Control And Funds Check in Projects R12: A Case Stud\ Using a Non-Integrated Budget

1. Define Common Projects Configurations

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2. Required Setups in Other Applications

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Setup > Financials > Accounting Setup Manager > Accounting SetupsQuer\ for the ledger:Click "Update Accounting Options"Select the ledger (then "Update") or directl\ click the update icon for the option "Define and update the journal processing options for\our ledger."

Under "Advanced Options" verif\ that the budgetar\ control option is enabled:



Note, \ou must also provide a value for the Reserve for Encumbrance Account.

b. Enable encumbrance accounting in Oracle Pa\ables and Oracle PurchasingIn Pa\ables navigate to: Setup > Options > Financial OptionsSelect the correct operating unitIn the "Encumbrance" tab - enable 'Use PO Encumbrance' to enable encumbrances for PO's and Supplier invoices.



Optionall\ enable "Use Requisition Encumbrance" to encumber requisitions also.

NoWe: In Purchasing the same form can be reached via Setup > Organi]ations > Financial Options. The setting in either locationapplies to both applications.

c. Ensure that Purchasing (PO) and Pa\ables (AP) SubLedger Accounting (SLA) setups allow for encumbrance accounting.

In the Subledger Accounting Method (SLAM) definition, this requires that \ou have assigned Application Accounting Definitions (AAD) to boththe Purchasing and Pa\ables applications which include the necessar\ burden cost event t\pes, and encumbrance journal line t\pes.

For Purchasing \ou can assign the seeded "Purchasing Encumbrance Application Accounting Definition"For Pa\ables \ou can use "Encumbrance Accrual" or "Encumbrance Cash" depending on the accounting method.Alternativel\ \ou can use these as models for \our own custom application accounting definitions.

The seeded SLAM "Encumbrance Accrual" comes with these assignments:



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3. Profile Option Settings

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4. Define Project Budgetar\ Control and Integration Options

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We are also using the amount t\pe "Project to Date" and boundar\ code "Project" which means that funds will be checked using project totals forbudget, actual, and commitment amounts, not period specific balances.

Navigation: Projects: Budgetar\ Control

Please refer to Note 1315336.1 for additional details on these concepts and setting \our budgetar\ control and integration options.

5. Define or Select a Budget Entr\ Method

Your budget entr\ method controls how \our enter \our budgets. It controls at what kind of budget amounts \ou can enter, the level of \our workbreakdown structure at which \ou enter budget amounts, whether those amounts are time-phased, and whether the\ are broken down b\ resource. These choices interact with the budgetar\ control and integration features in a variet\ of wa\s. See Note 1315850.1 for additional details on how thesesettings impact \our usage of budgetar\ control and integration functionalit\.

Navigation: Setup > Budgets > Entr\ Methods



In our case we have decided to enter amounts onl\ at the project level, and we will be entering budgeting amounts for the life of the project, notindividual periods. Amounts will be categori]ed and assigned to specific resources and resource groups. Because budgetar\ control is onl\applicable for cost budgets, we have enabled entr\ of the cost budget fields, but not revenue fields.

NoWe: Even if \our project does not allow burdening, \ou must enable entr\ of burdened amounts if \ou are using budgetar\ controls.

6. Define oU SelecW a ReVoXUce LiVW

If \our budget entr\ method has enabled the "Categori]e b\ Resources" option (as ours has), \ou will be required to assign a resource list to \ourbudget.



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The conWUol leYelV foU WheVe UeVoXUceV ZeUe defined on Whe UeVoXUce liVW aV "AbVolXWe' foU Whe UeVoXUce "MaWeUial" and Whe UeVoXUce gUoXp "SXpplieV" and"AdYiVoU\" foU Whe UeVoXUce "ChemicalV".



NoWe: Our budget entr\ method allows entr\ of both raw and burdened costs. The burdened cost amount we enter are the ones that will be usedin our funds available calculations.

8. SXbmiW and BaVeline Whe BXdgeW

When entr\ of budget amounts is complete, \ou click the "Submit" button to submit \our budget.

If \our budget t\pe has the "Use Workflow for Budget Status changes" option enabled, then when \ou submit \our budget, the PA Budget Workflowwill be kicked off. When the budget submission is approved via the workflow, baselining of the budget will continue automaticall\.

In our case, our budget t\pe does not use workflow for budget status changes, so when we click "Submit" the budget status is changed immediatel\to "Submitted". From this point we can either "Baseline" the budget, or click "Rework" if we wish to continue updating the budget.

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After our budget is submitted, we must baseline the budget. For integrated/controlled budgets the baselining process will kick off the "PA BudgetIntegration Workflow". Until this workflow completes the draft budget status will remain "In Progress".



The PA Budget Integration Workflow is a deferred workflow, so \ou will need to run the "Workflow Background Process" concurrent process in orderfor it to complete. Be sure to run this process with parameters:

Process Deferred = YesProcess Timeout = Yes

Once this process completes, the budget version should be baselined. In the budgets form the "Histor\" button should now be enabled for \ou to viewthe baselined budget version



ImpoUWanW: The baseline process also creates \our initial default budgetar\ controls, based on \ourproject and resource list setups, and establishes \our initial budgetar\ control balances.

9. AdjXVW IndiYidXal ConWUol LeYelV aV Needed.

When \ou initiall\ baseline \our original budget, the default budgetar\ controls are established based on \our settings in the project's budgetar\control options and optionall\ \our resource list level settings.

Once the baseline is complete; however, \ou have the abilit\ to adjust the individual control levels as required within the budgets form.

Navigation: Budgets: Tools > Budgetar\ Controls



The initial screen displa\s \our project and task level control settings. In our case, because we are not budgeting at the task level, there are nocontrols displa\ed at that level. Our project level control is absolute.

To view the resource and resource group level controls, click the "Resources" button:



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10. Enter E[pense Commitment Transactions (Purchasing: PO)

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NaYigaWion: PXUchaVing: PXUchaVe OUdeUV > PXUchaVe OUdeUV



Once Whe pXUchaVe oUdeU iV cUeaWed, \oX can manXall\ check Whe fXndV foU Whe oUdeU, oU foU a paUWicXlaU line oU diVWUibXWion b\ clicking in a paUWicXlaUline, diVWUibXWion oU in Whe PO HeadeU and VelecWing "Check FXndV" fUom Whe "ToolV" menX. ThiV Zill noW affecW Whe balanceV in PUojecWV bXW Zill onl\YeUif\ if VXfficienW fXndV e[iVW foU Whe pXUchaVe oUdeU oU line. If Whe check VXcceedV, aV Ze e[pecW iW Wo, \oX VhoXld Vee Whe folloZing meVVage:

If \oX click Whe "VieZ ReVXlWV" bXWWon, \oX Zill be pUeVenWed ZiWh a UepoUW VhoZing Whe UeVXlWV of Whe fXndV check like Whe folloZing:



When \ou approve the PO funds will be checked again, and if successful, records will be created in Projects which will update the balancesavailable. When \ou run the PRC: Update Budgetar\ Control Balances process these records will be reflected in the "Budget Funds Check Results"screen of the budgets form as seen below. Here \ou can view balances at the various budget levels.

Navigation: Budgets: Histor\ > (Select Baseline Version) > Tools > View Funds Check Results



To YieZ Whe UeVoXUce leYel balanceV click on Whe ReVoXUce Wab:

Note: Line 1 of Whe PO haV UeVXlWed in a fXndV UedXcWion of $110 UaWheU Whan $100 becaXVe Whe bXUden coVW applied Wo WhaW line iV $10. The Vecondline of Whe PO haV noW had an\ bXUden coVW added becaXVe Whe e[pendiWXUe W\pe of line 2 iV noW inclXded in Whe bXUden VWUXcWXUe and Vo Zill noW bebXUdened.

11. Enter E[pense Commitment Transactions (Pa\ables: Supplier Invoice)

In Pa\ableV Ze aUe going Wo aWWempW Wo enWeU a VXpplieU inYoice WhaW Ze e[pecW Wo e[ceed oXU aYailable fXndV and fail fXndV check.

We Zill enWeU an inYoice ZiWh a Vingle line and diVWUibXWion foU e[pendiWXUe W\pe "Lab SXpplieV".We do noW haYe an\ conWUol Vpecified foU WhiV Vpecific UeVoXUce; hoZeYeU, WhiV e[pendiWXUe W\pe UollV Xp Wo Whe UeVoXUce gUoXp "SXpplieV" Zhich Ze haYeaVVigned a fXndV conWUol leYel of "AbVolXWe".

We haYe bXdgeWed $3750 aW Whe UeVoXUce gUoXp leYel foU VXpplieV, Vo Ze Zill enWeU oXU VXpplieU inYoice foU $3800. The e[pendiWXUe W\pe "LabSXpplieV" iV noW paUW of Whe bXUden VWUXcWXUe foU oXU pUojecW, Vo WheUe VhoXld be no addiWional bXUden amoXnW and Whe acWXal amoXnW XVed in Whe fXndVcheck VhoXld be $3800.

Navigation: Pa\ables: Invoices > Entr\ > Invoices



AV in pXUchaVing, \oX can manXall\ check fXndV foU Whe inYoice oU a paUWicXlaU diVWUibXWion, b\ naYigaWing eiWheU Wo Whe inYoice headeU oU Whe diVWUibXWionand VelecWing "Check FXndV" fUom Whe AcWion menX. ThiV Zill YeUif\ aYailable fXndV, and UepoUW Whe UeVXlWV, bXW WhiV Zill noW affecW fXndV balanceV inPUojecWV. FXndV balanceV Zill onl\ be affecWed Zhen Whe inYoice iV YalidaWed. When Ze peUfoUm WhiV acWion, aV e[pecWed Ze UeceiYe a noWificaWion offailXUe:

Clicking Whe "VieZ ReVXlWV" bXWWon openV Whe folloZing UepoUW ZiWh Whe deWailV of Whe fXndV check opeUaWion:



The invoice validation process also performs a funds check. If successful, the invoice will proceed with validation, and the funds available balances inProjects will be updated. If not as in this case, the validation will fail and a hold will be placed on the invoice as seen below:

In order to release this hold and successfull\ validate the invoice, we would need to either:

a. Increase the budget amount for the "Supplies" resource group to some value greater than $3,800 and rebaseline our budget or

b. Reduce the invoice and distribution amount to something below $3750.

In our case, we will go with option (a) assuming that the invoice amount cannot be changed and we need to adjust our budget to accept this cost. InProjects we modif\ the budget amount for resource group "Supplies" to $4,000 raw cost and $5,000 burdened cost. We submit and baseline thebudget as before and run the Workflow Background Process to complete the baseline.

The baselined budget amount is as shown below.



Navigation: Budgets: Histor\ > Details

NoZ Zhen Ze aWWempW Wo Ue-YalidaWe Whe inYoice in Pa\ableV Ze aUe VXcceVVfXl and Whe hold WhaW ZaV placed on Whe inYoice iV aXWomaWicall\ UeleaVed.

Since Whe inYoice iV noZ YalidaWed, Ze VhoXld e[pecW Wo Vee Whe impacW on oXU aYailable fXndV in pUojecWV.

Navigation: Budgets: Histor\ > (Select Baseline Version) > Tools > View Funds Check Results



12. Troubleshooting Tips

See Note 1317340.1 for some technical detail on the data created in PA_BC_PACKETS, PA_BC_BALANCES and other related tables when weperform the various budgetar\ control processes outlined in this case stud\. This can also assist in interpretation of the outputs from the diagnosticscripts mentioned below.

The following notes contain details on commonl\ asked questions and various troubleshooting tips:

Note 842624.1, FAQ: Budgetar\ Control / Funds Check / GbL IntegrationNote 848274.1, Troubleshooting Fund Check/Budgetar\ Control Guide

Oracle provides a Diagnostic framework that includes Diagnostics that can help \ou review and identif\ \our funds check and budgetar\ controlissues. Please review the R12 Diagnostics Catalog, identif\ \our point release and locate the diagnostics under Oracle Projects: Funds Check

For Release 12.0.6 and above,

Note 732309.1 Funds Check Data Collection: this collects information budgetar\ control options, budgets, and funds check data for a specificproject and transaction.Note 732310.1 Funds Check Diagnostics: collects setup and file version information, and checks for some common data inconsistencies.

To access diagnostics in the application in Release 12.0.6 or above, the access path is as follows:

PleaVe noWe WhaW each diagnoVWic WeVW noWe inclXdeV WhiV infoUmaWion in Whe UVage VecWion.

Responsibilit\: Application DiagnosticsNavigation: Application Diagnostics > Diagnose

Click button Select Application and select Application "Projects"Scroll down to group "Funds Check"Select Test: Funds Check Data Collection or Funds Check Diagnostics.



13. SWill HaYe QXeVWionV?

To diVcXVV WhiV infoUmaWion fXUWheU ZiWh OUacle e[peUWV and indXVWU\ peeUV, Ze encoXUage \oX Wo UeYieZ, join oU VWaUW a diVcXVVion in Whe M\ OUacleSXppoUW PUojecWV CommXniW\.

We hope \oX find WhiV infoUmaWion XVefXl. OXU deViUe iV Wo pUoYide Whe UighW infoUmaWion Zhen \oX need iW. PleaVe leW XV knoZ hoZ Ze aUe doing. WeZelcome \oXU feedback.

RefeUenceV

NOTE:1315103.1 - SeWWing Up PUofile OpWionV foU BXdgeWaU\ ConWUol and InWegUaWion in OUacle PUojecWVNOTE:1315336.1 - ConfigXUing BXdgeWaU\ ConWUol and InWegUaWion OpWionV foU a PUojecWNOTE:1315850.1 - UVe of BXdgeW EnWU\ MeWhodV foU BXdgeWaU\ ConWUol and InWegUaWionNOTE:1316123.1 - UVing ReVoXUce LiVWV in BXdgeWaU\ ConWUol and InWegUaWionNOTE:1317340.1 - UndeUVWanding BXdgeWaU\ ConWUol DaWa in PUojecWVNOTE:842624.1 - FAQ: BXdgeWaU\ ConWUol / FXndV Check / GL InWegUaWionNOTE:848274.1 - TUoXbleVhooWing FXnd Check/BXdgeWaU\ ConWUol GXide

RelaWed

PUodXcWV

OUacle E-BXVineVV SXiWe > PUojecWV > PUojecWV > OUacle PUojecW CoVWing



Oracle E-Business Suite > Projects > Projects > Oracle Project CostingOracle E-Business Suite > Projects > Projects > Oracle Project Management

Ke\words

BUDGETARY CONTROL; CHECK; CONTROL; ENCUMBRANCE; FUNDS CHECK; INTEGRATION; SUBLEDGER ACCOUNTING

Errors

ERROR 1; ERROR 2

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budgetary control and funds check in projects - a case study

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