Funds Management – Budget

Availability and Control: Work

Orders
FI-FM-004
FI-FM-004

November 13, 2008

LaGOV
Version 1.0

Last updated: Nov 12, 2008

 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
2
 Logistics

Before we get started ...

3
 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

4
 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
5
 Project Phases

 Five Key Phases

Realization

Preparation
Preparation

Business
Blueprint

Support
Go Live
Project

Final

and
• Strategy & Approach Defined • Development & Unit Testing • Go-Live Support
• Project Team Training • Integration Testing • Performance Tuning
• End-User Training Materials

• Business Process Definition • User Acceptance

• Development Requirements • Technical Testing
• End-User Training
• Conversion

6
 Project Organization - Functional Teams

Finance Leads Logistics Leads Linear Assets Leads

Beverly Hodges – Finance Lead Belinda Rogers – Logistics Lead Mark Suarez – Agile Assets Lead
Drew Thigpen – Finance Lead Jack Ladhur – Logistics Lead Charles Pilson – Consulting Lead
Mary Ramsrud – Consulting Lead Brad Denham – Consulting Lead

General Ledger
Accounts Payable
Accts Receivable
Cash Management Fernando Figueroa
Cost Accounting Lucie Hidalgo
Funds Management Richard Lozano
Grants Mgt
Project Systems
Asset Accounting

Budget Prep
Grantor
Real Estate Mgt

7
 Blueprint Objectives

 Review and discuss the Current or AS-IS business processes

• Which helps to drive out the Business requirements
• As well as the 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
8
 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

orders

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

orders

9
 FM Sessions
Session
No of Schedul Description/Major
Session # Overview of major Session Topics
days e Business Process
Group

FM master data fields will be introduced. The use, mapping to legacy, naming convention and
FI-FM-001 1 days 7-Aug FM Master Data
maintenance process will be determined.

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
Budget Preparation, Versions, Budget Types/processes (Original, Carry Forward, Supplementary, Transfers &
17-18
FI-FM-002 2 days Amendments and Returns), Budget & Posting address (Budget Structures), Budget Doc types. Discuss options
Sep
Integration 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

Define budget control level (AVC addresses) in FM for departments/agencies, capital projects
22-23 Budget Availability and grant budgets (by FM Master Data) by fund and expense type. Define exceptions for
FI-FM-003 2 days
Oct and Control - General budget control. Define the FM standard and budget tolerance profiles used by SBBC. Review
other FM functionality which may be useful in budget control

Budget Availability Define budget control address for work orders from PM and Agile Assets. Determine use of
FI-FM-004 1 day 13-Nov and Control - Work automatic reservations at time of order creation. Determine the process for creating related FM
Orders master data and coordination with PM/Agile assets master data.

FM Budget Process by which FM gets updated for actual expenditures (posting address)
Consumption - Pre-encumbrances and encumbrances from MM
FI-FM-005 1 day 1-Oct
Expenses and FM Earmarked funds – type, use and liquidation process
Encumbrances Use of non-consumable budget types for reservations

Review FM Month End Activities including Opening / Closing FM Periods and Transferring
FM Period End Commitments to FI-GL. Review Additional FM Year End Activities including Commitment and
FI-FM-006 1.0 days 8-Oct
Processing associated budget balance carry-forwards, Residual Budget Carry-Forwards and Fund Balance
Carry-Forwards.

Review requirements for budget basis reporting

Budgetary Basis
FI-FM-007 1 day 18-Nov Review current reports
Reporting
Determine To Be reports framework

10
 SAP Glossary – FM module

FM BUDGET AVAILABILITY FUND CENTER (AGENCY, APPROP

CONTROL (AFS / DOTD Budget EXPENSE PROGRAM, AFS
Control) - Component in FM DIV/SECTION, DOTD DISTRICT or
which controls budget according to SECTION/DIV/GANG) - lowest level
FM dimensions of fund, fund areas of responsibility for budgetary
center, commitment item, funded monitoring and control.
program, functional area and
grant. COMMITMENT ITEMS (BAL.SHEET
ACCOUNT, OBJECT, SUB-OBJECT,
FUND (FUND, MOF (TBD)) - A REVENUE SOURCE)– represent
fiscal and accounting entity with a balance sheet, revenue and expenses
self-balancing set of accounts accounts in FM.
which are segregated for specific
activities or attaining certain FUNDED PROGRAM (CAPITAL
objectives in accordance with PROJECTS, GRANT PROGRAMS) -
special regulations, restrictions, or lower level internal programs or
limitations. Represent the lowest initiatives, such as capital projects, grant
level of funding used for tracking, funded programs, grantor programs,
controlling and reporting on expense projects or maintenance
available financial resources. orders, used for budgetary control &
reporting in FM.

11
 SAP Glossary – FM module

FUNCTIONAL AREA (ACTIVITIES,

FUNCTIONS)– Cross-organization
FM object used to divide
organizational 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
organization. Represents
externally funded grants.

12
 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
organization 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.

13
 As Is: Budget Control – DPS Work Orders
 Actual costs are recorded in AFS as follows:
– Salaries/Benefits: Recorded against Facilities Management
organization 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
organization 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.

14
 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).

15
 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
organization 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

16
 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.

17
 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
orders.

18
 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
out the responsible cost center (organization) or Capital Projects
through the use of Secondary Cost Elements
19
Agile Assets / SAP DOTD Work Order
Process - Overview

Inserts and Updates

Of WBS elements
Agile Projects SAP PS
(Full List of relevant,
open Projects)

Inserts and Updates

Of Agile Work
Agile Work Orders
SAP PM
Orders (Full list of relevant,
open WOs)

Inserts
of Agile
Day Cards
Labor
(with attached WO SAP CAT
Daycards
Agile Day To connect with PM
Cards WO) Equipment SAP PM
actuals
Materials SAP PM
Goods Issues

Final costed
transactions IN
SAP ECC

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

20
Funds Management

Fund Accounting

FM Budgetary Controls
Budget Execution
Budgetary Basis
Reporting
Commitment Accounting

21
 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

22
23
 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)

24
 Cost Centers: DOTD Proposed Numbering Scheme

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
(1) – (3) (4) – (5) (6) – (7)
(8)  (9) – (10)
Agency = Program DOTD District        
Unit Crew
or Section
Business Area 

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.

25
25
Cost Centers: Non-DOTD Proposed Numbering Scheme

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
(1) – (3) (4) – (5) (6) – (7)
(8) – (9)  (10) 
Agency = Program Division
Section Unit
Business Area 

26
26
 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)

27
 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)

28
 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)

29
 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
30
 Deriving and Updating AVC Data

Control address

Budget address

Posting address

31
 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
order 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.
32
 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.
33
 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.

34
 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)

35
 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).

36
 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
object 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.

37
 Summary Decision: Budget Control – Expense
Categories
 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:

NO SAP BUDGET CONTROL SAP BUDGET CONTROL

Salary Related Expenses Non-Salary Expenses

– 21 Salaries (511) – 30 Unallotted
– 45 Travel and Training (520)
– 35 Other Compensation (512) – 50 Operating Services (530)
– 40 Related Benefits (513) – 55 Supplies (540)
– 60 Professional Services (550)
– 65 Other Charges (560)
Other Legacy Object
– 70 Capital Outlay (570)
Categories: – 75 Major Repairs (580)
– Transfers - 62,64,71-74,76,77 & 84 – 80 Debt Services (590)
– Warrants Drawn – WD & WN – 85 IAT * (990)
– 90 Auxiliary Program (TBD)

 Capital Funds will also control budget according to the above

expense category
38
 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.
39
 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
object 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.

40
 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)

41
 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
order 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
of work order masters

 Training on understanding budget and budget control for work

orders according to the new FM dimensions

 Training on reading the budget control error messages to determine

the amount of budget transfer required to continue

42
 Next Steps

 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

43
 Questions?
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 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
online in the Budgetary (9A-standard Payment Budget) and the
Control ledger (9H-standard Payment Budget AVC Ledger).
45
 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
or 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 46
Overview of AVC Functionality

47
 Budget Execution and Control – Summary Decisions

 Non-payroll related costs will consume budget and be subject to budget control unless
otherwise 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
order
– 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

48
 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
 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
or 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
order release. Budget control would take
– Automatic creation of purchase requisition(s) for non-stock items. Purchase
orders 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.
50
 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
orders 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

51
 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
orders 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
orders. 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
52
 As-Is Process Flow

Fund Code Structure in ISIS

53
 As-Is Process Flow

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

54
 As-Is Process Flow

 Fund Type
 CAPITAL PROJECT FUNDS
 DEBT SERVICE FUNDS
 ENTERPRISE FUNDS
 REVENUE SHARING FUNDS
 GEN FIXED ASSET GROUP  SPECIAL REVENUE FUNDS
 GENERAL FUND  SPECIAL ASSESSMENT FUNDS
 INTERNAL SERVICE FUNDS  EXPENDABLE TRUST/AGENCY FUNDS
 GEN LONG TERM DEBT GROUP  COLLEGE & UNIVERSITY FUNDS
 NON-EXPENDABLE TRUST/AGY  INVESTMENT POOL FUNDS
FUNDS  SUSPENSE CLASSIFICATION FUNDS
 DISCRETE FUNDS

55
 As-Is Process Flow

 Fund Category
 Original

56
 As-Is Process Flow

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

57
 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)

58
 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

59
 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
of 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