By the end of this lesson, you will be able to approve project budgets using B&P’s budget tool.
Upon completion of this chapter you will be able to:
§ Approve Project Budgets
In order for Budgeting & Planning’s project budgeting process to work efficiently, the program needs to know who in your company can originate and modify project budgets and who has responsibility for approving these budgets. The database includes all project manager assignments that have been recorded in your accounting system, up and down the entire project structure, wherever assignments have been made. The application also assigns the highest level project manager as the approver of all budgets, whether the budgets are created at the lowest or some rollup level. For multi-level projects, all managers assigned to roll-up levels are budget originators, but not approvers.
Approval authority has to be created in the database because it does not exist in the accounting system. When you determine the appropriate management authority structure, it will underlie the budget creation and workflow process.
Approval is necessary to establish a frozen budget, (a requirement of the Estimate-at-Complete process), and critical to fulfilling Earned Value Management (EVM) requirements, if they exist.
B&P encourages the alignment of project management authority structures with the budgeting and performance reporting processes so that an accountability process can be established. Then, when performance issues arise, corrective action can be taken.
Approving a Budget
Creating a budget approval authority has to be done first.
§ The project IDs that appear in this drop-down list are determined by the following:
§ The project’s org ID is equal to the user’s security org ID.
§ The active flag is set to yes.
§ The project end date has not expired.
§ It is a rollup project.
A successful confirmation message appears to confirm.
Approve a Budget
|
Step |
Action |
Data/Result |
|
1 |
Select a module and context. |
§ Budget Development § Project |
|
2 |
Select a project in project navigation. |
Selects a project at the highest level. |
|
3 |
Select a report in Reports & Actions. |
BPI12: Audit/Modify All Direct Project Budgets |
|
4 |
Note results. |
Each row represents the lowest level project/task ID associated with the top level of the project. |
|
5 |
Find the project ID and click Select. |
Opens the approval table. |
|
6 |
Click Edit in the approval table, and check Approved and enter the Approved Date. |
Approves the budget. |
|
7 |
Click Update. |
Closes the approval table. |
By the end of this lesson, you will become familiar with and understand the value of some of B&P’s budget reports.
Upon completion of this chapter you will be able to:
§ Access Budget Reports
The Budget Development module uses dynamic pages, just as the Cost Analysis module does. The same hunt and drill approach to finding and analyzing project costs can be used to drill down to originated budget details by contributing resource up and down the entire project structure. The available reports are also referenced by IDs similar to their Cost Analysis Module counterparts. If you are familiar with reporting in the Cost Analysis Module, and if budget details have been developed, they can be found and reported quickly and easily.
These reports are essential audit tools to assist you in establishing performance metrics for the larger, higher profile programs, and others as appropriate. Participation is likely with a project budgeting and approval workflow process in place. Auditing performance against these metrics is a vital part of establishing accountability and ensuring that corrective actions, when necessary, are successful.
Accessing Budget Reports
Click project ID segments from left to right in the list boxes.
§ A brief description appears as your cursor hovers over a report name.
§ Each report is labeled with a code, as in all the modules in B&P.
§ The first letter refers to the Module you are in.
§ The second letter refers to the Management context you selected.
§ The third letter refers to the level or type of report/action.
§ The number refers to the sequence ID of the report.
§ The report code, level, and title are printed at the top of the report when it opens.
§ To export the report to Excel, click the Excel icon.
§ To print the report, click the print button.
§ To close the report, click the Close button.
Review Summary Level Budgeted Costs
|
Step |
Action |
Data/Result |
|
1 |
Select a module and context. |
§ Budget Development § Project |
|
2 |
Select a report in Reports & Actions. |
BPT1: BGT/EAC Direct Projects Cost Cats |
|
3 |
Click to open. |
Opens the report. |
|
4 |
Minimize BPT1 and select another report. |
BPT3: BGT/EAC Projects Future Cost |
|
5 |
Click to open. |
Opens the report. |
|
6 |
Reopen BPT1 and move it above BPT3. |
Both reports are open for comparison. |
|
7 |
Select any cost category from the drop-down list in BPT3. |
Regenerates the report to display that cost category for all projects listed on the report. |
|
8 |
Compare those numbers with the numbers for that same cost category in BPT1. |
They are identical. |
|
9 |
Click a project ID # in BPT1. |
Drills down and opens a Lvl. Down BGT Project Cost Cats. |
|
10 |
Minimize BPT1 and BPL1. |
Leaves BPT3 open. |
|
11 |
Click the same project ID # in BPT3. |
Drills down and opens a Lvl. Down BGT Projects Future Cost. |
|
12 |
Minimize all reports except BPL1 and BPL2. |
BPL1 should be on top of BPL2. |
|
13 |
Select the same sub-project ID in both reports and compare the format. |
Numbers are the same but categorized differently. |
|
14 |
Select any cost category from the drop-down list on BPL2. |
Regenerates the report to display that cost category for all projects listed on the report. |
|
15 |
Compare those numbers with the numbers for that same cost category in BPT1. |
They are identical. |
|
16 |
Click Close. |
Closes all reports. |
Review Active Level Budgeted Cost Analysis Report Formats
|
Step |
Action |
Data/Result |
|
1 |
Select a module and context. |
§ Budget Development § Project |
|
2 |
Select a project ID # in project navigation from left to right. |
Selects a project at the lowest level. |
|
3 |
Select the following reports in Reports & Actions. |
§ Active Lvl BPA1 § Active Lvl BPA2 § Active Lvl BPA3 § Active Lvl BPA4 |
|
4 |
Select a different module. |
Supplemental Reports |
|
5 |
Select a report in Reports & Actions. |
SPA1: Job Summary Report or SPA5: Project Status Report |
|
6 |
Compare the data in SPA1 or SPA5 to the Budgeted reports just opened. |
|
|
7 |
Select a different module. |
Budget Development |
|
8 |
Select a report in Reports & Actions. |
Active Lvl BPA8 |
|
9 |
Compare the charted data to BPA3. |
The Y axis left scale corresponds to the ITD plotted line series while the Y axis right scale corresponds to the period- by-period plotted stacked bar series. |
§ Project Budget/EAC Process Flow Chart
§ How Hourly Rates Work in the Project Budget Tool
§ How B&P Handles Historical Subcontract and/or Consulting Hours
If you are creating a budget for a proposal, backlog project or non-backlog project, B&P will use, for each staff resource, the hourly rate associated with the compensation change date closest to, but on or before, the project start date, which may not necessarily be the staff current rates. It is up to you to make sure the escalation factors are properly set in the project budget tool to reflect what increases would be expected for each staff resource after the project’s start date.
For an EAC the rule is the same except the compensation change date is related to the date the EAC is created rather than the project’s start date. When calculating burden, B&P will use PSR/JSR final rates if available, or the target rates from past fiscal year periods, while the current fiscal year target rates will be used for the current fiscal year periods and beyond. If you have set up rates for future fiscal year periods in B&P, they will be applied instead of just extrapolating the current fiscal year rates.
Some things to remember:
§ If you don’t want a project’s budgeted costs to change every time you open it, approve the budget to freeze it. Once approved, its details can be viewed without opening the project budget tool.
§ Resources that have an escalation factor of 1 means that B&P is using 100% of a resource’s determined rate.
§ If you find a resource that hasn’t had a rate increase in 2 years, enter the company default escalation rate squared, where appropriate; i.e. 1.03².
§ If you clone a proposal budget from a project budget, but with future start and end dates, you’ll get different numbers for resource costs each time you open the proposal budget because hourly rates change over time.
§ Assigned escalation factors persist; only hourly rates change.
§ When you’re awarded the contract and want to make a proposal budget real, B&P will pick the most recent rates for the resources based on the date you create the new backlog project budget. However, it will inherit the escalation factors from the proposal being copied. Therefore, you will need to adjust the escalations to reflect the rate increases.
§ When you create an EAC from a budget, the EAC will use staff hourly rates with effective dates less than or equal to the last closed period when the EAC is created—not the date the project started.
§ For an EAC, when the escalation month is set to 0 in B&P, then the escalation factor is increased when the employee’s hire/adjusted hire date falls into that period.
§ When the escalation month equals 1 through 12, then the escalation factor is increased when the first of the selected month falls in that period.
§ If the escalation date is the same as the creation date of the EAC, then the value is 1. It is assumed that the employee has had their pay raise in that same period, and that is the hourly rate that will be used for calculating labor.
What follows is a description of how B&P deals with historical subcontract and/or consulting hours in its project budgeting/EAC tools, and what you need to do to make sure that potential double counting of revenue and/or cost does not get reflected in project budgeting results.
Within B&P’s project budgeting tool, for both budget and EAC, there are two tabs for the allocation of subcontractor; one for raw cost only where there is no requirement to record individual hours, and one for hours-based effort. The same holds true for the allocation of consultant effort. When B&P’s project budgeting tool computes burden and revenue, it takes the results you input from both tabs and adds them together. In this way it is able to deal with the requirement to parse out vendor costs and revenues so that the impact of billing rates and associated profit can be properly determined. In the budgeting effort, this is also important for making sure that T&M labor category hours stay within any negotiated constraints or ceilings. There is, however, a slight difference in this budget process depending upon whether it is a budget or an EAC that is being developed.
NOTE: In GCS, unless a vendor has been entered as a consultant employee, the vendor invoice entry process will not accommodate the recording of hours by labor category.
Upon creating a budget for a project with a period-of-performance that has already begun, and with historical expended subcontractor or consultant effort, all historical cost gets loaded into the associated cost tab of the project budget tool. All historical hours get loaded into the hours tab. In the hours tab, you must enter an hourly cost factor to properly estimate cost and a project labor category for determination of revenue. Additionally, you must make the proper selections in the revenue setup function accessed via the burden cost tab in the project budget tool. The historical cost and revenue will be estimated by the hours tab, and the results of both tabs will be combined. However, any historical vendor costs recorded in the cost tab that has hours that have also been recorded in the hours tab, will result in a double count of cost and revenue.
Future non-hours related costs must be included in future periods of the cost tab. Future hours related costs must be included in future periods of the associated hours tab. You are allowed to modify any costs or hours that have been automatically entered in any of the historical periods of the period-of-performance in either the cost or hours tabs.
NOTE: In cases where there are historical hours recorded and these details are necessary for determining future T&M revenues, the associated vendor costs must be removed from the cost tab to avoid double counting.
The project budget and EAC tools function the same except the EAC will not calculate any cost for historical hours, so you do not have to eliminate any corresponding cost in the cost tab. However, the EAC will estimate any revenue associated with historical hours in the hours tab.
To avoid a double count of revenue in the cost tab, you can simply turn the revenue calculation off for the tab in the revenue setup. If the cost tab includes a mix of non-hours and hours related costs, then the revenue box for these items can be unchecked and the revenue setup for the tab can be active. Unchecked rows will be skipped during revenue calculation. For both the cost and hours tabs, you will not be able to modify any figures in historical periods.