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Last updated: Nov 12, 2008

Funds Management – Budget Availability and Control: Work Orders

FI-FM-004

November 13, 2008

Funds Management Funds Management – – Budget Budget Availability and Control: Work Availability and Control: Work Orders Orders

FI FI-

• FM

FM-

• 004

004

November 13, 2008 November 13, 2008

LaGOV LaGOV

2

Agenda

• Logistics, Ground Rules & Introduction
• Project Timeline
• Workshop Objectives
• Business Process Review

– Process overview – AS-IS process flow – Current system alignment – Process improvement opportunities – SAP terms Glossary – SAP concepts & functionality – Business process flow – Leading practices – Enterprise readiness challenges

• Next Steps – Action items
• Questions

3

Before we get started ... Logistics

4

Ground Rules

• Has everybody signed in?
• Everybody participates – Blueprint is not a spectator sport
• Silence means agreement
• Focus is key – please turn off cell phones and close laptops
• Challenge existing processes and mindsets
• Offer suggestions and ideas
• Think Enterprise & Integration
• Ask questions at any time
• One person at a time please
• Timeliness – returning from break
• Creativity, Cooperation and Compromise

5

Introduction

• Roles
• Process Analyst and Functional Consultant – lead and facilitate

the discussions, and drive design decisions

• Documenter – take detailed notes to support formal meeting minutes

to be sent by the Process Analyst to all participants for review and feedback

• Team Members – provide additional support for process discussions,

address key integration touch points

• Subject Matter Experts – advise project team members on the

detailed business processes and participate in the decisions required to design the future business process of the State

Round the Room Introductions Name Position Agency

6

Project Phases

 Five Key Phases

• Strategy & Approach Defined
• Project Team Training
• Business Process Definition
• Development Requirements
• Development & Unit Testing
• Integration Testing
• End-User Training Materials
• User Acceptance
• Technical Testing
• End-User Training
• Conversion
• Go-Live Support
• Performance Tuning

Project Preparation Business Blueprint Realization Go Live and Support Final Preparation

7

Finance Leads Beverly Hodges – Finance Lead Drew Thigpen – Finance Lead Mary Ramsrud – Consulting Lead Logistics Leads Belinda Rogers – Logistics Lead Jack Ladhur – Logistics Lead Brad Denham – Consulting Lead Linear Assets Leads Mark Suarez – Agile Assets Lead Charles Pilson – Consulting Lead General Ledger Accts Receivable Cost Accounting Grants Mgt Asset Accounting Real Estate Mgt Accounts Payable Cash Management Funds Management Project Systems Budget Prep

Project Organization - Functional Teams

Grantor

Fernando Figueroa Lucie Hidalgo Richard Lozano

8

Blueprint Objectives

• Review and discuss the Current or AS-IS business processes
• Which helps to drive out the Business requirements

Business requirements

• As well as the integration points

integration points with other processes

• Define Master Data
• Address key integration points
• Support organizational requirements
• Consistent and appropriate use of data fields
• Define Future or TO-BE business processes based on:
• Best Practices inherent in SAP
• Intellectual capital from other SAP implementations
• State business requirements
• Identify development requirements
• Which could result in the need for a Form, Report, Interface, Conversion, Enhancement, or Workflow

(FRICE-W)

• Understand and communicate any organizational impacts /

Enterprise Readiness challenges

• Gather system security authorizations and district-wide training

requirements

9

Work Session Objectives

• Review As is budget control for DOTD and Non-DOTD maintenance

work orders in scope

• Define posting, budget and budget control addresses in FM for work
• rders
• Review expense types and reach budget control decision for each,

including exemptions from budget control

• Describe the timing of budget consumption and control for work
• rders

10

FM Sessions

Session # No of days Schedul e Session Description/Major Business Process Group Overview of major Session Topics FI-FM-001 1 days 7-Aug FM Master Data FM master data fields will be introduced. The use, mapping to legacy, naming convention and maintenance process will be determined. FI-FM-002 2 days 17-18 Sep Budget Preparation, Amendments and Integration Need to coordinate Budget Prep design with FM, GM, GTR and PS in ECC 6.0 for budget preparation and budget amendments. Define FM budgeting characteristics including Budget Versions, Budget Types/processes (Original, Carry Forward, Supplementary, Transfers & Returns), Budget & Posting address (Budget Structures), Budget Doc types. Discuss options for Budget Amendments/Adjustments (AS-IS & TO-BE). Determine the frequency of “Plan” Retraction to SAP R3 (FM, GM, PS, HR-PBC) and update frequency of “Actual” data into BW cubes, from ECC and other systems FI-FM-003 2 days 22-23 Oct Budget Availability and Control - General Define budget control level (AVC addresses) in FM for departments/agencies, capital projects and grant budgets (by FM Master Data) by fund and expense type. Define exceptions for budget control. Define the FM standard and budget tolerance profiles used by SBBC. Review

• ther FM functionality which may be useful in budget control

FI-FM-004 1 day 13-Nov Budget Availability and Control - Work Orders Define budget control address for work orders from PM and Agile Assets. Determine use of automatic reservations at time of order creation. Determine the process for creating related FM master data and coordination with PM/Agile assets master data. FI-FM-005 1 day 1-Oct FM Budget Consumption - Expenses and Encumbrances Process by which FM gets updated for actual expenditures (posting address) Pre-encumbrances and encumbrances from MM FM Earmarked funds – type, use and liquidation process Use of non-consumable budget types for reservations FI-FM-006 1.0 days 8-Oct FM Period End Processing Review FM Month End Activities including Opening / Closing FM Periods and Transferring Commitments to FI-GL. Review Additional FM Year End Activities including Commitment and associated budget balance carry-forwards, Residual Budget Carry-Forwards and Fund Balance Carry-Forwards. FI-FM-007 1 day 18-Nov Budgetary Basis Reporting Review requirements for budget basis reporting Review current reports Determine To Be reports framework

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SAP Glossary – FM module

FM BUDGET AVAILABILITY CONTROL (AFS / DOTD Budget Control) - Component in FM which controls budget according to FM dimensions of fund, fund center, commitment item, funded program, functional area and grant. FUND (FUND, MOF (TBD)) - A fiscal and accounting entity with a self-balancing set of accounts which are segregated for specific activities or attaining certain

• bjectives in accordance with

special regulations, restrictions, or

• limitations. Represent the lowest

level of funding used for tracking, controlling and reporting on available financial resources. FUND CENTER (AGENCY, APPROP EXPENSE PROGRAM, AFS DIV/SECTION, DOTD DISTRICT or SECTION/DIV/GANG) - lowest level areas of responsibility for budgetary monitoring and control. COMMITMENT ITEMS (BAL.SHEET ACCOUNT, OBJECT, SUB-OBJECT, REVENUE SOURCE)– represent balance sheet, revenue and expenses accounts in FM. FUNDED PROGRAM (CAPITAL PROJECTS, GRANT PROGRAMS) - lower level internal programs or initiatives, such as capital projects, grant funded programs, grantor programs, expense projects or maintenance

• rders, used for budgetary control &

reporting in FM.

12

SAP Glossary – FM module

FUNCTIONAL AREA (ACTIVITIES, FUNCTIONS)– Cross-organization FM object used to divide

• rganizational costs according to

functional aspects, activities or programs to meet legal or internal reporting requirements GRANT (REPORTING CATEGORY) – Lower-level funding instruments used to document, control and report on the results of an agreement between a sponsor and an

• rganization. Represents

externally funded grants.

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As Is: Budget Control – DOTD Work Orders

• Work Orders are entered into SAP HR and interfaced to DOTD

accounting system:

– Salaries/Benefits: Recorded against home organization and are not allocated or charged to the organization where the work order is being performed. – Equipment usage: Cost of equipment usage is charged to the work order but no budget is checked at work order. The equipment expense is charged to the

• rganization that purchased it at the time purchase.

– Inventory/materials: Like equipment, inventory is charged to work orders but is not budget checked. Inventory is budget checked when it is purchased. There is no budget check when inventory is consumed except when the consumption is by another district or section than the issuing district.

14

As Is: Budget Control – DPS Work Orders

• Actual costs are recorded in AFS as follows:

– Salaries/Benefits: Recorded against Facilities Management

• rganization and are not allocated or charged to the organization where

the work order is being performed. – Equipment usage: Like salaries, cost of equipment usage is not charged to the work order. The equipment expense is charged to the

• rganization that purchased it at the time purchase.

– Inventory/Materials: May be charged directly to the organization specifically for that work order. In some cases, inventory may be issued from a central warehouse and charged to the work order organization at that time, if different.

15

As Is: Budget Control – DPS Work Orders

• Work is often performed and material issued even if

there is no sufficient budget at the program and object category level. Budget transfers is done before expenses post.

• May have some Capital Project related work orders

(although rare).

16

As Is: Budget Control – OSB Work Orders

• Actual costs are recorded in AFS as follows:

– Salaries/Benefits: Recorded against home organization and are not allocated or charged to the organization/ reporting category (building) where the work order is being performed, unless the salaries & benefits is part of that organization (i. e. superintendents salaries for each building) – Equipment usage: Like salaries, cost of equipment usage is not charged to the work order. The equipment expense is charged to the

• rganization that purchased it at the time purchase.

– Inventory/Materials: May be charged directly to the organization specifically for that work order. In some cases, inventory may be issued from a central warehouse and charged to the work order organization at that time, if different

17

As Is: Budget Control – OSB Work Orders

• Reporting Category is used to track actual expenses for

individual buildings.

• Capital project related maintenance work orders are not

applicable.

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As Is Availability Control – Work Orders DOTD, Dept of Public Safety and OSB

• No tracking of actual costs by individual work orders in

AFS

• The following expenses are not subject to budget control

for work order activities:

– Salaries and Benefits – Inventory issues/usage from a central warehouse that is within the same program and object category – Usage of equipment (i.e. 5 hours x rate)

• The following expenses are subject to budget control for

work order activities against the appropriated program and object category:

– Inventory (usage) issued from an organization in a different program (from a central warehouse). – Direct purchases of inventory, materials or equipment to support work

• rders.

19

SAP PM Work Order Process - Overview

• Plant Maintenance Work Order Current Scope: DOTD, DPS and

OSB, including Fleet Maintenance

• Individual PM work orders will be used to track labor, equipment

usage and materials (both stock and non-stock) at the individual work order level within the one system – SAP will support both operational and financial details – Costs may be coded directly to the work order or may be allocated to it through CO allocations (e.g. equipment usage)

• Four types of work orders will be defined in PM with different

number ranges: – Internally assigned numeric number

• Preventative
• Repair
• Capital Project

– Externally assigned number

• Agile
• Upon completion of the work order, costs will be settled or closed
• ut the responsible cost center (organization) or Capital Projects

through the use of Secondary Cost Elements

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Agile Assets / SAP DOTD Work Order Process - Overview

Agile Projects Inserts and Updates Of WBS elements (Full List of relevant,

• pen Projects)

SAP PS Agile Work Orders SAP PM Inserts and Updates Of Agile Work Orders (Full list of relevant,

• pen WOs)

Agile Day Cards SAP CAT Inserts

• f Agile

Day Cards (with attached WO To connect with PM WO) SAP PM actuals SAP PM Goods Issues SAP ECC Labor Daycards Equipment Materials Final costed transactions IN

Agile Assets Scope: DOTD (both Capital and non-Capital)

21

Funds Management

FM FM

Fund Accounting Budgetary Controls Budget Execution Budgetary Basis Reporting Commitment Accounting

22

FM Master Data

• The following master data is created in FM for the

purposes of budgeting, budgetary accounting, statutory reporting, and/or budgetary control: – Fund – Fund Center – Functional Area – Funded Program – Commitment Item

• In addition, the Grant field created in Grants

Management (GM) is also available in FM

23

24

Draft Funds - Numbering Convention

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Operating Funds: (1)-(4) = CAFR Classifications (Fund Group / Fund Type / Fund Class) (5)-(7) = CAFR / Agency Fund (8)-(10) = MOF or zero filled Capital Funds: (1)-(4) = CAFR Classifications (Fund Group / Fund Type / Fund Class) (5)-(7) = Capital Outlay Fund Number (8)-(10) = Funding Source (LOC, Bond Series, Other)

25

25 25

Cost Centers: DOTD Proposed Numbering Scheme

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

(1) – (3) Agency = Business Area (4) – (5) Program (9) – (10) Crew (8) Unit

Notes: 1. Crew (Old Gang #’s) will be renumbered (from 3 digits to 2); will be left as old where ever possible. 2. At this time, Digit # 8 (Unit) is not used. Will be populated with “0” for now. Can be used in future.

(6) – (7) DOTD District

• r Section

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26 26

Cost Centers: Non-DOTD Proposed Numbering Scheme

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

(1) – (3) Agency = Business Area (4) – (5) Program (6) – (7) Division

(10) Unit

(8) – (9) Section

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Standard SAP Numbering Convention

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Common Public Sector Presentation:

• Assets:

1000000-1999999

• Liabilities:

2000000-2999999

• Fund Balance:

3000000-3999999

• Revenues:

4000000-4999999

• Expenses:

5000000-5999999

• Secondary Costs:

9000000-9999999

Commitment Items will have a 1:1 relationship with GL accounts and cost elements, with some possible exceptions (assets and inventory)

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Draft Funded Program Proposal (1)

• The funded program will be used where budget control

for discrete, non-organizational activities

• Funded Program will be have a 1:1 relationship at the

level where discrete budget is entered for:

– Capital Project Phases (WBS elements) – Grant Funded Programs (WBS elements), if necessary – Discrete Temporary Expenditures (CO Internal Orders)

• Funded Program may be created at a roll-up level for

groups of maintenance orders (Agile and SAP PM)

29

Functional Area - Numbering Convention

(1) (2) (3) (4) (5) (6) -

• (16)

(1)-(2) = CAFR Level Function/Program (3)-(5) = AFS Activity (RITA, KATR, TECH) or DOTD function (6)-(16) = Zero Filled (future use if required)

30

FM Budget Addresses

Three addresses* exist in Funds Management: 1. Budget Address

• FM account assignment on which budget and budget entries

are entered or can be entered in FM. May be at same level or higher than posting address. 2. Posting Address

• FM account assignment on which actual / commitment postings

are received and allowed in FM.

• Typically is the lowest or most detailed level of the FM account

assignments 3. Availability Control Address

• FM account assignment on which budget control takes place.
• Typically takes place at higher roll-up level than budget

address to prevent unnecessary budget transfers (highest possible legal level) *Addresses refer to combinations of FM account assignments or dimensions, either

individually or at roll-up levels

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Deriving and Updating AVC Data

Posting address Budget address Control address

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Proposal: Posting Address – Preventative, Regular & Agile Work Orders

• FUND (1) – The fund from the posting will be used.
• FUND CENTER (2) – When posting to a work order, a cost center will not be entered

however the related FM fund center will be derived from the work order master record. – The cost center (fund center) in the work order will be cost center where the work

• rder is being performed
• COMMITMENT ITEM (3) – The commitment item will be derived from the GL expense

account used to record the work order expense

• FUNCTIONAL AREA (1) – Will be transferred from the actual posting. The functional

area used in the posting should match the functional area in the work order master.

• FUNDED PROGRAM (2) – One high level, roll-up funded program by agency will be

derived in FM for all work orders to summarize actual costs for all work orders to segregate these costs from regular operating fund center costs. – The individual work order number will also be recorded in FM

• GRANT (1) – Will default to “Not Relevant” value

(1): Value may be inferred during posting, where possible (2): Value will be derived in FM only. Work order will be entered by user. (3) Will be entered by user.

33

Proposal: Budget Address – Preventative, Regular & Agile Work Orders

• FUND – The operating fund used to record the work order expense
• FUND CENTER – A higher level fund center where the work order is being performed.

– For AFS Agencies, the budget will be entered in a fund center represent agency, program, division and section (no unit). – For DOTD, the budget will be entered in a higher level fund center representing agency, program, DOTD district or section (no unit or gang)

• COMMITMENT ITEM – The individual commitment items that will incur the expense
• FUNCTIONAL AREA – “Not Relevant” value (TBD)
• FUNDED PROGRAM – “Not Relevant” value since work order and non-work expenses

share the same budget at the appropriated program level. Any expenses subject to budget control coded directly to work orders will consume the responsible fund center

• budget. Question: Do we want to separate work order relevant budget in total from non-

work relevant budget for the appropriated program and organization?

• GRANT (1) – “Not Relevant” value

In summary, similar to the current practice, the budget to support work orders will reside at the operating fund, fund center (appropriation program and organization) and commitment item (object code) where the work is being carried. Salary budget will reside in the fund center whose carries out the work order, which may be different.

34

Proposal: Posting Address – Capital Project Work Orders

• FUND (1) – The Capital Fund for the Capital Project from the posting will be used.
• FUND CENTER (2) – When posting to a work order, a cost center will not be entered

however the related FM fund center will be derived from the work order master record. – The cost center (fund center) in the work order will be the one responsible for the Capital Project

• COMMITMENT ITEM (3) – The commitment item will be derived from the GL expense

account used to record the work order expense

• FUNCTIONAL AREA (1) – Will be transferred from the actual posting. The functional

area used in the posting should match the functional area in the work order master.

• FUNDED PROGRAM (2) – Will be derived from the WBS element (Capital Project

phase) from the Work Order master record – The individual work order number will also be recorded in FM

• GRANT (1) – Will default to “Not Relevant” value

(1): Value may be inferred during posting, where possible (2): Value will be derived in FM only. Work order will be entered by user. (3) Will be entered by user.

35

Proposal: Budget Address – Capital Project Work Orders

• FUND – The Capital Fund for the Capital Project
• FUND CENTER – The fund center responsible for the Capital Project.
• COMMITMENT ITEM – The individual commitment items that will incur the expense
• FUNCTIONAL AREA – “Not Relevant” value (TBD)
• FUNDED PROGRAM – The Capital Project WBS Element(s) representing the phase(s) of

the project. Any expenses subject to budget control coded directly to work orders will consume the budget of the appropriate Capital Project phase. – Question: Are maintenance work order expenses budgeted for separately in Capital Projects?

• GRANT (1) – Relevant only if it is a non-FHWA, grant funded capital project; otherwise ill

budget will be assigned to “Not Relevant” value In summary, the budget to support Capital Project work orders will reside in the appropriate phase of the Capital Project by Capital Funds and Commitment Item (object category)

36

SAP Key Design Considerations

• There is no functionality in PM for budget control (hard stops) at the

work order level or rolled-up level

• Any budget control relating to work orders would need to be

accommodated in Funds Management (FM)

• Native SAP provides no budget control on settlements, including PM

work order settlement and activity allocations

• No budget control on salaries and salary related costs (State

decision)

• SAP Best Practice: Budget control should be used to satisfy legal

requirements, not to manage a business

– Control budget at a level that gives enough flexibility to reduce non-value added budget transfers, but still gives controls required for effectively managing operations – i.e. Do Not budget check at too low a level (individual work orders).

37

Proposal: SAP Budget Control

• No major change to the current practice will take place for budget control by

types of expenses – No separate budgeting or budget control will take place at the individual work order or work order groups – Budget will be consumed and checked, where necessary, at the fund center or the Capital Project for which the work order is performed

• Work Order Expenses Exempt from Budget Control:

– Salaries and benefits coded to the work order – Inventory usage from warehouses in the same program and current two digit

• bject category (first three digits of commitment items in SAP)
• In the case of DOTD, no budget control if the inventory for the work order is

from the same district or section as the work order – Activity allocations for Equipment usage

• Work Order Expenses Subject to Budget Control:

– Inventory usage from warehouses in a different appropriated program and current two digit object category or different district or section – Direct purchases of inventory, materials or equipment to support work orders

• For expenses subject to budget control, this will take place at the time of the

expense or commitment posting to the work order. No budget control takes place on settlement of work order costs.

38

Summary Decision: Budget Control – Expense Categories

Non-Salary Expenses

– 30 Unallotted – 45 Travel and Training (520) – 50 Operating Services (530) – 55 Supplies (540) – 60 Professional Services (550) – 65 Other Charges (560) – 70 Capital Outlay (570) – 75 Major Repairs (580) – 80 Debt Services (590) – 85 IAT * (990) – 90 Auxiliary Program (TBD)

• Per Commissioner’s direction, all funds subject to budget control will be

budget checked according to current AFS Object Categories using high level commitment item rollups:

Salary Related Expenses

– 21 Salaries (511) – 35 Other Compensation (512) – 40 Related Benefits (513)

Other Legacy Object Categories:

– Transfers - 62,64,71-74,76,77 & 84 – Warrants Drawn – WD & WN

NO SAP BUDGET CONTROL SAP BUDGET CONTROL

• Capital Funds will also control budget according to the above

expense category

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Proposal: Budget Consumption and Control – Preventative, Regular & Agile Work Orders

• FUND – By operating fund
• FUND CENTER – Higher level Fund center where the work order is being
• performed. Fund center derived from the Cost Center in work order master.

– For DPS and OSB, budget controlled to the first five characters, representing legacy Agency and Appropriated Expense Unit. – For DOTD, budget controlled to the first seven characters, representing legacy Agency, Program, District or Section

• COMMITMENT ITEM – Commitment Item roll-up equivalent to the current two

digit object category or DOTD ISIS group.

• FUNCTIONAL AREA – Not Applicable (ignored)
• FUNDED PROGRAMS – Not Applicable (ignored)
• GRANT – Not applicable (ignored)

PM Work Order Requirement: In the header of the work order, the fund and cost center who requested the work order must be entered. Functional area will also be entered but currently does not form part of budget control.

40

Proposal: Budget Consumption and Control – Capital Project Work Orders

• FUND – Budget will be by individual Capital Fund
• FUND CENTER – Not Applicable (ignored)
• COMMITMENT ITEM – Commitment Item roll-up equivalent to the current two digit
• bject category or DOTD ISIS group.
• FUNCTIONAL AREA – Not Applicable (ignored)
• FUNDED PROGRAM – Funded Program representing the Capital Project Phase for

which the work order is being performed

• GRANT – Not applicable (ignored)

PM Work Order Requirement: In the header of the work order, the Capital fund and WBS Element (project phase) will need must be entered. The Cost Center responsible for the Capital Outlay and the Functional area will also be entered but won’t be applicable for budget control.

41

Process Improvement Opportunities

• No major improvements as it relates to budgeting and budget

controlling for work orders

• Are capital related work orders checked against the Capital

Budget directly?

• Individual PM work orders will be used to track labor, equipment

usage and materials (both stock and non-stock) at the individual work order level within the one system – SAP will support both operational and financial details – Costs may be coded directly to the work order or may be allocated to it through CO allocations (e.g. equipment usage)

42

Organizational Impacts

• Since there are no major changes to the budgeting for work orders,

thus no major organizational impacts

• For expenses subject to budget control, if any, budget will be

checked at the fund center or Capital project where the work

• rder is being performed
• Major organizational impact will be the actual coding of expenses to

individual work orders for labor, materials and equipment and set-up

• f work order masters
• Training on understanding budget and budget control for work
• rders according to the new FM dimensions
• Training on reading the budget control error messages to determine

the amount of budget transfer required to continue

43

• Prepare and send out Minutes of this Meeting to all Invitees
• Commence incorporation of details into draft Design document (PDD)
• Follow-up on Action Items identified during this Workshop
• Schedule off-line meeting(s) to discuss areas of special concern, if any
• Plan follow on Workshops, as required
• Review overall design in the Validation Workshop
• Ensure all To-Do’s are appropriately documented

Next Steps

Questions?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?

45

FM Budget Control System (BCS) - Overview

• FM-BCS is the sub-component of FM where budget control is

configured.

• Availability Control (AVC) is a flexible tool used to monitor the

availability of funds (consumable budget against consumed amounts) in the Budget Control System of FM

• Budget control can take place at any combination of the following

FM dimensions: Fund, Fund Center, Commitment Item, Funded Program, Functional Area, Grant

• Budget control can occur at the individual master data level

(lowest level) or higher “level” or roll-up of the FM dimensions

• ‘Not Relevant’ value will be used where dimension is not

required, e.g. Funded Program and Grant

• When a budget consuming document is updated or completed, the

associated encumbrance or expenditure document is also updated

• nline in the Budgetary (9A-standard Payment Budget) and the

Control ledger (9H-standard Payment Budget AVC Ledger).

46

FM Budget Control System (BCS) - Overview

• Tolerance profiles (and related derivation strategies) are used to

determined:

• What type of message is issued when insufficient budget exists
• r nearly exhausted (error, warning, information messages)
• What FM dimensions or expense types, if any, are budget

controlled and budget control exempt

• Derivations Strategy is used to determined the FM Availability

Control Address (AVC)

• The budget control address summarizes the budget and actual

expenses / commitments that roll up to it to determine the available budget left for spending

• The FM AVC ledger (9H) calculates the Consumed Amount

(expenses/commitments) and the Consumable Amount (available budget)

• The Budget Control Addresses determined where budget control

takes place. It works together together with the tolerance profiles to determine the reaction for the budget consuming document being entered

47

Overview of AVC Functionality

48

Budget Execution and Control – Summary Decisions

• Non-payroll related costs will consume budget and be subject to budget control unless
• therwise noted (general rule)
• FM integration with Purchasing – Will consume budget and be subject to budget control

for all stages of the purchasing cycle. If the value of follow-on documents are greater than the previous document in the chain, a budget check is triggered at that stage. Budget is returned if no further activity is expected and purchasing document is updated. – Purchase requisitions - Pre-encumbrance against budget – Purchase orders – Encumbrance established; will reduce the referenced purchase requisition’s pre-encumbrance for the lesser of the value of purchase order or purchase requisition – Goods receipts – Expenditure established against budget; Will reduce the referenced purchase order’s encumbrance for the lesser of the value of good receipt or purchase

• rder

– Invoice receipts – Expenditures established (with Invoice status); will reduce the referenced goods receipt’s expenditure for the lesser of the value of invoice receipt or goods receipt

• Payroll and Payroll Related Costs will consume budget (real FM postings) but AVC will

be configured not to hard stop on budget overruns

FM Budget Control – Budget Tolerance Profiles

• Decision: As a starting point, the Standard Tolerance for the State

will incorporate the following:

• For expenses subject to budget control:
• No warning message issued to end user when budget nears consumption
• An error message issued to end users when budget consumption exceeds

100%

• No email messages to fund center owner
• No use of absolute tolerances (amounts)
• Payroll postings will be excluded from budget control in tolerance profile
• Standard Tolerance Profile will be used for all agencies and funds,

including capital outlay and grants

• Alternative Tolerances will be defined and will be used to override

the Standard Tolerance when necessary.

• Warning Message at 100% Consumption
• No Message at 100% Consumption
• Use of Alternative Tolerances, if necessary, and fine tuning of

Standard Tolerance or creation of additional tolerances to be determined during Realization

50

Budget Consumption

There are two options for when work order costs consume budget:

• Consume budget for stock and non-stock expenses at the time of the expense
• r commitment posting

– Purchase Requisitions / Orders, Goods Issue or FI/CO expense postings directly to the work order

• Consume budget for stock and non-stock expenses at the time of the work
• rder release. Budget control would take

– Automatic creation of purchase requisition(s) for non-stock items. Purchase

• rders would reference the purchase requisition(s)

– Automatic creation of material reservations for stock items. Material reservations would be referenced in the good issue transaction. – Creation of these documents would creation funds commitment documents in FM to reserve the budget. Funds commitment status is updated throughout the process (commitment to expense, etc).

• Subsequent budget check performed if subsequent transaction value is greater than initial

commitments.

• Decision:??
• Note: Budget consumption and control to occur at the time of work order
• postings. No budget control takes place on settlement of work order costs.

51

FM Addresses: Proposal

For regular (non-capital project) PM maintenance work orders (both Agile and SAP):

• Posting Address: Actual expenses and commitments will be updated in FM from other modules

(MM, HR, FI, CO) at the individual / lowest level FM dimensions* - – The operating Fund, Fund center responsible for the work order, and Functional Area will be derived from the work master record – One high level funded program by agency will be used to summarize actual costs for all work

• rders to segregate these costs from regular operating fund center costs. The individual

work order number will also be recorded in FM – The commitment item will be derived from the GL account used in the posting – Grant will equal “Not Relevant” value. – FM Derivation rules will be used to derive the FM master data objects

• Budget Address: Budget will be entered at and adjusted at the individual / lowest level FM

dimensions* . Possible Exception: Budget to reside at a higher level Fund Center, depending on how on the level of budgeting within the new Fund Center (cost center) number – Similar to current practice, any budget that supports maintenance work orders will reside in the respective fund center that carries out the work, in addition to the fund and commitment item for that fund center budget – Functional area will also be budgeted for if appropriation program (and possibly sub- program) will be mapped to the functional area in SAP (tbd) – Funded Program will equal the capital project phase. Any costs subject to budget control will consume the project phase budget. – Grant = Not Relevant

* FM dimensions include Fund, Fund Center, Functional Area, Funded Programs, Commitment Item and Grant

52

FM Addresses: Proposal

For Capital project relevant PM maintenance work orders (both Agile and SAP):

• Posting Address: Actual expenses and commitments will be updated in FM from other modules

(MM, HR, FI, CO) at the individual / lowest level FM dimensions* - rolled up funded program for all work orders? By order types? – Capital Fund, Funded Program (Project phase), Functional Area and Fund Center (responsible for the capital project) will be derived from the master data in the work order. The individual work order number will also be recorded in FM. – The commitment item will be derived from the GL account used in the posting – Grant will equal “Not Relevant” value. – FM Derivation rules will be used to read the master data off the work order master header and derive the equivalent FM master data

• Budget Address: Budget will be entered at and adjusted at the individual / lowest level FM

dimensions* . Possible Exception: Budget to reside a higher level Fund Center, depending on how on the level of budgeting within the new Fund Center (cost center) number – Similar to current practice, budget that supports capital project relevant maintenance work

• rders will reside in the respective Capital Fund, Fund Center and Capital Project funded

program (WBS element – project phase) that requested the maintenance work. In addition, the budget will be entered in the Capital Projects by Commitment Items. – Functional area will also be budgeted for if appropriation program (and possibly sub- program) will be mapped to the functional area in SAP (tbd) – Funded Program will equal Not Relevant since no budget control is carried out for work

• rders. Any miscellaneous costs subject to budget control coded directly to work orders will

consume the responsible fund center budget. – Grant = Not Relevant

* FM dimensions include Fund, Fund Center, Functional Area, Funded Programs, Commitment Item and Grant

53

As-Is Process Flow

Fund Code Structure in ISIS

54

As-Is Process Flow

• Fund Group
• FIDUCIARY
• GOVERNMENTAL
• PROPRIETARY
• COLLEGES & UNIVERSITIES
• SUSPENSE CLASSIFICATION
• DISCRETE

55

As-Is Process Flow

• Fund Type
• CAPITAL PROJECT FUNDS
• DEBT SERVICE FUNDS
• ENTERPRISE FUNDS
• GEN FIXED ASSET GROUP
• GENERAL FUND
• INTERNAL SERVICE FUNDS
• GEN LONG TERM DEBT GROUP
• NON-EXPENDABLE TRUST/AGY

FUNDS

• REVENUE SHARING FUNDS
• SPECIAL REVENUE FUNDS
• SPECIAL ASSESSMENT FUNDS
• EXPENDABLE TRUST/AGENCY FUNDS
• COLLEGE & UNIVERSITY FUNDS
• INVESTMENT POOL FUNDS
• SUSPENSE CLASSIFICATION FUNDS
• DISCRETE FUNDS

56

As-Is Process Flow

• Fund Category
• Original

57

As-Is Process Flow

• Fund Class
• AGRICULTURE
• BOND SECURITY AND REDEMPTION
• CONSTITUTIONALLY CREATED
• CORRECTIONS
• CULTURE RECREATION & TOURISM
• CUSTODIAL
• DEPT OF ECONOMIC DEVELOPMENT
• DEPT OF ENVIRONMENTAL QUALITY
• DEPT OF HEALTH AND HOSPITALS
• DEPT OF NATURAL RESOURCES
• DEPT OF PUBLIC SAFETY
• DEPT OF REVENUE AND TAXATION
• DEBT SERVICE
• DEBT SERVICE RESERVE
• DEPT OF SOCIAL SERVICES
• DEPT OF EDUCATION
• ESCROW
• FREE SCHOOL
• GAMING
• OFFICE OF THE GOVERNOR
• DEPT OF HIGHWAYS
• DEPT OF INSURANCE
• JUDICIARY
• DEPT OF JUSTICE
• DEPT OF LABOR
• LEVEE DISTRICTS
• PARISH & MUNICIPAL
• PAYROLL CLEARING
• PUBLIC SERVICE COMMISSION
• ROCKEFELLER
• RUSSELL SAGE
• SECRETARY OF STATE
• STATE TREASURER'S OFFICE
• TRAVEL CLEARING
• TRANSPORTATION TRUST
• DEPT OF WILDLIFE & FISHERIES
• GENERAL FUND
• CAPITAL OUTLAY (77)
• CAPITAL OUTLAY (78)
• ENTERPRISE/INTERNAL SERVICE
• AGENCY OPERATING
• COLLEGE/UNIVERSITY OPERATION
• NONGENERAL FUND OPERATING
• INTERFACE FUNDS

58

Funds - Numbering Convention (2)

(1)-(2) = Fund Group/Fund Type

11= Governmental – General 12= Governmental – Special Revenue 13= Governmental – Debt Service 14= Governmental – Capital 21= Proprietary – Enterprise 22= Proprietary – Internal Service 31= Fiduciary = Expendable Trust

Etc (3)-(4) Legacy Fund Class (renumbered)

59

Funds - Numbering Convention (3)

Operating Fund Examples:

• 1101.000.000 General Fund
• 1103.141.001 Office of Attorney Gen. – General Fund
• 1103.141.002 Office of Attorney Gen. – Self-Gen
• 1103.141.100 Office of Attorney Gen. – Stat Ded #1
• 1103.141.101 Office of Attorney Gen. – Stat Ded#2
• 1102.258.000 LA Economic Development Corp

Capital Fund Examples:

• 1320.075.001 Fac. Cap Proj funded by 2000 (00) seriesA(1) bond
• 1320.075.052 Fac. Cap.Proj funded by 2005 (05) seriesB(2) bond
• 1320.075.000 Fac. Cap.Proj funded by Line of Credit (000)

Fund Class and MOF may be renumbered. Fund # will be kept, where possible

Note: No periods will be part of the fund number;used for ease of segregation only

FM Budget Control – Budget Tolerance Profiles

• Work in conjunction with FM Availability Control, which determined

the Budget Control Address

• For each tolerance profile, the following can be defined:
• Posting activities (e.g. purchase orders, invoices) subject to budget control
• Exempt activities (e.g. payroll postings) not subject to budget control
• Staged tolerances based on percentage or absolute tolerances
• Type of message to be received by end user at the time of entry for each stage
• f consumption (information, warning or error)
• Ability to send email to SAP mail to budget analyst or person with budgetary

responsibility when AVC events (warning or errors) occur and to determine frequency of such emails (once, each time, etc)

• Standard Tolerance is defined with ability to define and derive

alternative tolerance rules where necessary