Calculate Over-Budget Transactions

Encumbrance accounting is used primarily by non-profit organizations to track the expenditure of funds as they are appropriated, or encumbered. These organizations frequently deal with agencies that grant limited amounts of funds. As the organization reaches the limit of these funds, they make requests to the agency for additional funding. Therefore, the organization needs to track expenditures and, if the fund limit is exceeded, they must not post transactions until additional funds are requested and approved.

You can use encumbrance tracking to track expenditures, for both posted and unposted transactions, on an individual project basis. You can enter budget ceilings at the account level. After you enter the transactions, over-budget amounts compute and print on a report before the transactions post. You have five options for handling the over-budget transactions:

1. Increase the ceiling amount for the project/account.

2. Set up new budget revisions, designate them as "Current," and enter new budget accounts and amounts.

3. Change the project/account charge point combination on the transactions.

4. Manually remove the over-budget flag from the transactions.

5. Hold the transactions from posting until additional funds are granted.

Setup

You can enter different budget versions, or "revisions," for a given project. Enter these revisions in the Maintain Project Budget Line Item Revisions screen with each revision identified by a particular code. This code is then referenced in the other Encumbrance Tracking screens.

You can set up revisions at any level of the project. You can also set them up at more than one level of the project. For each project, you can designate only one revision as "Current," which means that the system will use this revision when computing over-budget amounts for a selected year.

After entering the budget revision, enter the specific accounts and their amounts for evaluation for over-budget transactions in the Maintain Project Line Item Budgets screen. You can enter either summary or detail account ceilings; however, you cannot enter a ceiling for both the summary and detail levels of the same account branch. In other words, you can enter a ceiling at only one level of the account. In addition, you must place the ceiling at or above the charging account level in order for it to be evaluated. The amount is the ceiling for this project/account combination for all organizations.

Keep in mind that encumbrance tracking is a separate function from budgeting. If you want to track project budgets, enter them in the screens in the Period Budgets or Total Budgets menus in Costpoint client/server.

Step-By-Step Processing

1. Set up an encumbrance revision for the project in the Maintain Project Budget Line Item Revisions screen.

2. Enter the accounts and their ceiling amounts in the Maintain Project Line Item Budgets screen.

3. Enter timesheets, A/P vouchers, travel vouchers, cash receipts, journal entries, and requisitions. Proof the data entry by printing edit reports.

4. Run the Calculate Over Budget Transactions screen. This generates an exceptions report listing the transactions and amounts that are disallowed. You can have disallowed transactions automatically marked with an "Over Budget" flag in the header subtask of each transaction in the screen of original entry. You can also mark this flag manually. If you have chosen not to flag the "Over Budget" transactions, the exceptions report still prints, but the transactions post unless you flag them manually.

5. Increase the ceiling amount for any project/account amounts for which you have received additional funding, or add a new encumbrance budget revision, mark it as "Current," and add new project/account ceiling amounts for this revision. You can also edit the charge point to a different project/account combination or to a suspense account. Do not manually remove the "Over Budget" flag for any transactions that you are going to include in the re-run of the Calculate Over Budget Transactions process. If no other actions have been taken on these transactions, Costpoint will re-flag them.

6. Re-run the Calculate Over Budget Transactions process to clear any transactions that are no longer "Over Budget." The "Over Budget" flags in the transaction headers will be automatically unchecked. You can also uncheck the flags manually at this point.

7. Post the transactions. Any transactions marked as "Over Budget" will not post.

8. If you execute the period close process, "Over Budget" transactions automatically move to the next open subperiod where they can be re-evaluated. If the period you are closing is the final period of the fiscal year, you must post all "Over Budget" transactions; you cannot close the year with unrecognized obligations.

You compute over-budget transactions after entering the transactions but before posting them. This alerts you to the transactions that have exceeded the budget ceiling. You can then increase the ceilings, edit the project/account combinations to different charge points, hold the transactions from being posted, or post them to their original charge point.

You can compute the over-budget transactions as many times as required in a given period. The process evaluates the primary sources of transaction entry: A/P vouchers, travel vouchers, timesheets, journal entries, and requisitions. It does not consider unit transactions, service center allocations, fixed asset entries, or cash receipts. The evaluation performs only on the direct cost amounts; indirect costs that apply to direct costs are not included. In addition, the process ignores transactions that have already been placed "On Hold." It cannot evaluate transactions for a given fiscal year, period, or subperiod, because once an obligation exists, it must always be considered. Transactions are considered in their entirety; partial transactions are not evaluated. For example, once a timesheet has been disallowed, the individual line items are not considered.

Over-budget amounts print automatically on an exceptions report. You control the order in which transactions are evaluated and printed on the exceptions report. The order is always ascending and begins with the project, then the account. Within each project/account combination, you can evaluate and sort by date, then journal type; or journal type, then date. The journal type can be further evaluated and sorted by each of the four transaction types. Amount is always the last criterion.

The over-budget calculation evaluates only projects that are active. To enhance the processing speed of the program, you should flag inactive projects as soon as possible. The process does not evaluate projects that have no records in the Maintain Project Line Item Budgets or Maintain Project Budget Line Item Revisions screens.

The Calculate Over Budget Transactions screen builds a common encumbrance table called Z_PJPOBT_RPT. The  system compares incurred amounts to budget amounts on an inception-to-date basis. The process uses amounts from PSR_PY_SUM and GL_POST_SUM, for prior and current year posted transactions, respectively, and the various unposted transaction edit files such as VCHR_HDR, JE_HDR, TVL_ADV_HDR, TVL_EXP_HDR, CO_EXP_HDR, TS_HDR, and RQ_HDR.

When computing the over-budget transactions, you have the option of designating them as "Over Budget." This marks the transactions with a flag in the header subtask of the screen of original entry and prevents them from being posted. In order to post the transactions, you must increase the ceiling or change the charge point. You can then re-run the compute process to remove the flags on any transactions that are no longer over budget. You can also remove the flag manually.

During the period-close process, any transactions that are still on "Over Budget" status move to the next subperiod that is open for those types of transactions. In other words, if a given "Over Budget" transaction is an A/P voucher and you are closing period five, the transaction moves to period six, subperiod one, provided that A/P transactions are open for that subperiod. If that subperiod is not open for A/P vouchers, subperiod two is checked, and so on. You cannot close the fiscal year with any transactions in an "Over Budget" status. If the period you are closing is the final period of the fiscal year, you must leave the period open until the transactions are posted.

Because of the nature of this feature, we recommend that access to the Encumbrance Tracking screens be limited to as few employees as feasible.

Enter, or use Query to select, a parameter ID of up to 15 alphanumeric characters.  You should choose characters for your parameter ID that help identify the type of selections you made in the screen, such as “PERIOD” or “QUARTERLY.”  

When you save your record, all the selections made in the screen are stored with the parameter ID. Later, you can retrieve the parameter using Query.

You can use the parameter to produce reports and run processes more efficiently because you can select the parameter ID with its previously defined screen selections.  Once the default selections display in the screen, you can override the defaults as necessary.

Enter, or use Query to select, a parameter description of up to 30 alphanumeric characters.

Use this drop-down box to select the range of projects that you want to include in the process.  The following options are available:

• All - Select this option to include all available projects. The Start and End fields are disabled for this option.

• One - Select this option to include only one project. You must enter that value in the Start field. The End field is disabled for this option.

• Range - Select this option to include a contiguous range of projects. You must enter the beginning value for the range in the Start field and the ending value of the range in the End field.

• From Beginning - Select this option to include all the projects from the beginning of the available projects to a specific project in the range. You must enter the last value for the range in the End field.  The Start field is disabled for this option.

• To End - Select this option to include all the projects from a specific project to the end of all the available projects. You must enter the value from which the range should begin in the Start field. The End field is disabled for this option.

Enter, or use Lookup to select, a starting project number for the range that you want to include in the process.

If you select "One," "Range," or "To End," in the Projects Option field, you must enter a project number in this field.

If you select "All" or "From Beginning" in the  Projects Option field, this field will be inactive.

Enter, or use Lookup to select, an ending project number for the range that you want to include in the process.

If you select "All," "Range," or "From Beginning" in the Projects Option field, you must enter a project number in this field.

If you select "One" or "To End" in the Projects Option field, this field will be inactive.

This non-editable field displays the "One" option. This is because you can only run this process for one accounting period at a time.

Enter, or use Lookup to select, a fiscal year for which you want run the process.

Select this checkbox to automatically set any over-budget transactions with an over-budget flag in the transaction entry screens. This flag is located in the header of the transaction screens and prevents the transaction from being posted.

When you execute the Calculate Over-Budget Transactions screen, an exceptions report, detailing the over budget transactions, is printed. After increasing any budget ceilings or editing the project/account combination in the applicable  transaction screen, you can re-run the Calculate Over-Budget Transactions screen to remove the flag. You can also remove the flag manually. Any transactions that are still marked as over-budget will not post and will be moved to the next available period when the current period is closed.

If you do not select this checkbox, an exceptions report is still printed and you can continue to edit the charge points. If you add the flag manually, there will be no automatic mechanism in place to prevent transactions that are still over-budget from being posted. In summary, the exceptions report alerts you to the over-budget transactions but the over-budget flag prevents the transaction from being posted.

Select this checkbox to approve requisitions that have been released by the over-budget calculation. This checkbox is enabled only if you have checked the Over Budget Validation checkbox in the Requisition Settings screen (Administration\Configure\Materials\Requisition Settings).

Select this radio button if you want each of the transactions to be evaluated by date first, followed by journal type and amount.

Select this radio button if you want each of the transactions to be evaluated by journal type first, followed by date and amount.