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Purpose
The Funds Management / Budget Control solution in the Business Warehouse (BW) will
support you in creating and executing budgets. Changes to the budget are made by entering
releases, supplements, returns, and transfers in the SAP R/3 system. These changes will be
reflected in the web reports found in the Funds Management / Budget Control solution.
• FM contains data needed for tracking budgets encumbrance and actuals.
• FM data are summarized by fund, fund center, commitment item (not to be confused with
commitment), functional area and funded program.
• In FM, procurement costs for 3-way match Purchase Orders are updated either when the
goods receipt is posted or when the invoice is posted,
whichever comes first.
• User codes (statistical internal orders) are not available in FM nor are assets and liabilities.
• Due to the availability of budgets and encumbrances data FM data is better suited to
departmental reporting.
Integration
Funds Management / Budget Control is fully integrated with other components in the R/3
System. The components that are integrated depend on the specific requirements defined by
the Origination. A basic requirement for use of Funds Management / Budget Control is
integration with the General Ledger Accounting (FI-GL) component. Integrating the
components Materials Management and Funds Management / Budget Control, means that you
can, for example, reproduce and monitor procurement transactions from the purchase
requisition to the invoice.
Integration also ensures that all the data you need for budget execution is available
when you need it, and in the format needed.
Features
Funds Management /Budget Control enables you to keep:
• A check of the revenues and expenditures, and the funds-relevant to the
business transactions of an organization.
• Budgetary control, with the following questions in mind:
– What funds will the responsible areas receive?
– Where do these funds come from (source of funds)?
– What are the funds used for? (use of funds)
• Control of the financial equilibrium of your business, by comparing commitment
and actual values with the current budget values.
Master Data
Commitment items:You use commitment items to map out functional units
(expenditure and revenue structures) in a hierarchy. They divide up the content of
the budget and the business transactions affecting liquidity into revenue items and
expenditure items.
Fund:You can use funds to further subdivide budgets. They allow a management of
funds from secondary sources.
Functional Area:You can use functional areas to subdivide your organization using
functional criteria.
Organizational Structure – Assignments
Funds center hierarchy
Definition:Within the organizational unit, the funds centers represent the structural grouping into
departments, areas of responsibility, projects,
Changing the validity period of a funds center as part of the conversion to year-dependent funds
centers
In your organization an additional department is planned in the following fiscal year 2006:
1. You create a new funds center master record for the additional department in master record
processing.
2. In the implementation guide (IMG) of Funds Management Government , you create a new
hierarchy variant key0002, copy the master data that exists in hierarchy variant 0001 to new
hierarchy variant 0002 and integrate the new funds center into it.
3. You assign hierarchy variant 0002 to fiscal year 2006 in the IMG of Funds Management
Government .
Fund
Definition:Funds represent financial resources that are provided for a specific purpose by a sponsor and
managed separately. This enables the exact source of the funds to be determined.
The budget period is the period of available budget authority. It is a master data element that is part of the
account assignment, not a transaction-specific element like the posting date. It is an integral part of funds
availability control and enables you to record budget appropriation/execution items independently of the
fiscal year or any other master data information.
You may commit funds during the budget period. After it, however, you may post only follow-on documents,
such as goods receipts, invoices, and payments. Each combination of a budget period and a fund is
considered to be a separate pot of money that must be kept intact, even into future accounting fiscal years.
Prerequisites
To make use of the budget period in conjunction with the New General Ledger (G/L), you need either to
create new ledgers or migrate data from your existing ones.
Functional Area
Definition
The functional area maps the functional structure (such as public safety, town planning and so
on), especially the expenditures of an organization (FM area)By activating the functional area
Asset Accounting:
Controlling: Activating the fund ensures that costs and revenues are assigned to the correct
fund in cost center accounting. an extra account assignment object and can be specified as
sender and receiver for all types of internal clearing.
Human Resources: Activating the fund ensures that personnel expenses, time sheet and travel
expenses are assigned to the correct fund in cost center accounting.
Funds Management:
The functional area runs through the whole organizational/ functional structure (funds center
and commitment item hierarchies) of your organization as well as the fund.
You can use the authorization concept to define authorizations in Funds Management for the
following activities:
Process Flow
The authorization check of budget entry is divided into the following sub-steps:
1. FM area authorization
It first checks whether the user has authorization forthe FM area.
Then it checks whether the user has authorization forthe budget version used. If the user does
not have authorization, the check is terminated and processing is refused.
If the authorization group is maintained for FM account assignments, then the authorization
check of the respective FM account assignments is carried out, that is, of the combination of
FM area/commitment item/funds center/fund. If the user has this authorization, all other
authorization checks are skipped and the instructions are carried out.
If the authorization check is not maintained for the FM account assignment, the individual
checks of the FM account assignment elements are carried out in the order fund, funds center
and commitment item.
In the authorization check for the funds center, the system first checks the general
authorization, then the cross and internal authorization check.
The diagram shows the case where the FM account assignment check is maintained for a user.
No checks are carried out after the authorization checks for FM area, budget versions and FM
account assignments and the system allows and executes budget entry.
Former Budgeting vs. Budget Control System
Master data used in budgeting :
1 Former Budgeting 2 BCS
13 14 Grant (optional)
Budgets are to be allocate to Funds Center for each Commitment Item. The Budget can be
allocated on the top-down principle or bottom-up principle.
In the top-down principle, the the Fund Center can be derived from the Cost Center / Material.
Hierarchies are maintained in the preparation of Fund Center based on the hierarchy of Cost
Center / Material. budget is entered at the top level of the hierarchy. Then it is further
distributed among the lower levels.
In case of bottom-up principle, the budget is entered at the lowest level of hierarchy. The
budget automatically gets updated for the upper levels of budgeting hierarchy.Separate
Budgeting needs to be done for Committment and Payment Budgets. Payment Budgets can be
done only if commitment budgets exist.
Original Budget:
The approved Budget shall be posted in the Fund Management Module of SAP as version '0'.
The original budget shall be posted in at detail at Funds Center and Commitment Item. The
original budget is required to be posted on a fiscal year basis.
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Budget Changes:
The Fund Management module provides the option of budget to be changed by one of the
following - Supplement, Return or Transfer. Each of these may be used as per the business
need of the organization.
(1) Budget Supplement: Supplements increases the original budget which was posted into
the FM module.
(2) Budget Return: Returns decreases the original budget which was entered into the FM
module.
(3) Budget Transfers: Transfers are offsetting increases or decreases of the original budget.
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Budget Release:
The Fund Management module has a feature of the Budget Release which is used to release
Budget entered for the purpose of consumption of budget. Budget is available to be used for
the expenditure to be incurred only when it is released.
SAP provides two strategies of the release of budget - Automatic Release and Manual
Release. This provides flexibility to the organization to utilize this feature as per the business
requirement. The Budget can be released annually, quarterly or on monthly basis.
Budget Structure
Within BCS, the use of a budget structure is not mandatory. However, the use of a
budget structure will help to define the link between budget addresses and posting
addresses and enables to control the permissible budget and posting
addresses. Here you will find an overview of Budget Structure Scenarios in the Budget
Control System. The Budget Structure is independent of Master Data Hierarchy.
Budgeting Workbench
The Budgeting Workbench provides two main features : creation of FM budget
documents and management of existing budget documents.
Status Management
Status Management enables to split the budgeting cycle split up into successive phases,
such as Budget preparation, Budget Update, Closing operations,
Special Functions that can only be used with BCS active
Multi-Year Budget (to manage one of the budgets independent of a fiscal year)
FMMPTRAN Document BCS budget type1 -> BCS budget type2. Revaluation
and reassignment supported
FMCYINIT Document (change doc) BCS budget data ENTR, RETN, SUPL -> BCS entry
doc
FMMPCOVR Entry doc BCS residual budget -> COSD- CORV. Reassignment
possible
Step 6 Enter / Derive FC and CI while doing transaction (PR, PO, F-02, FB50, etc)
Step 7 System check budget for FC and CI and give warning / error message for
budget control
Step 8 Generate reports and check budget availability and budget status
Step 9 At year end carry forward, available budget, commitment item or associated
budget with commitment item.