1. © Huron Consulting Group. All rights reserved. BOSTON CHARLOTTE CHICAGO HOUSTON NEW YORK SAN FRANCISCO Experience. Redefined. Research Forum Grants and Commitment Control May 16, 2003 © Huron Consulting Group. All rights reserved.

2. 2 Discussion Topics 1)Commitment Control Background 2)Approaching Commitment Control 3)Key Steps for Commitment Control Configuration 4)Budget Setup for Grants 5)Budget Checking Process

3. 3 Topic 1 – Commitment Control Background Commitment Control is the result of a consolidation of previous versions of commercial and public sector budget checking modules Ledger_Budg has become Ledger_KK Budget checking in v8.4 is the method to post/track encumbrances, regardless of use of controlled budgets Project budgeting in the Grants module utilizes Commitment Control Budget + Recognized Revenue + Budget Tolerance - Expense - Encumbrance _- Pre-encumbrance__________ = Remaining Spending Authority

4. 4 Topic 2 – Approaching Commitment Control 1)Create a list of major project types 2)List the common budgeting/spending rules for each project type 3)List the different types of edits required for each type of sponsor/institution requirement 4)Evaluate the best method for each type of edit: –Chartfield Combination Edit –Budget Checking at Transaction Source –Workflow Approval –Billing Limit –Manual After-the-Fact Review (Random and/or Account/Project Specific) 5)Identify edits related to Budget Checking and evaluate Commitment Control configuration

5. 5 Commitment Control & Sponsored Research Typical Requirements for Sponsored Research Budget Control –Ability to create project budgets based on: Budget Category (Salary, Equipment, Supplies, etc) Overall Amount (Total Award Amount) –Ability to have different types of budget control depending on the type of project budget: Track spending against a budget Control spending against a budget –Ability to have different budget setup and budget checking rules for: Cost Share Transactions Sponsored Transactions –Ability to have different budget checking rules based on: Type/Source of Transaction (Purchase Orders, Journal Entries, Feeders)

6. 6 Topic 3 – Key Steps for Commitment Control Configuration 1)SetIDs and Business Units 2)TableSet Sharing 3)Establish Commitment Control Ledgers and Ledger Groups –Detailed Ledgers –Ledger Groups 4)Define Control Budget Options (Budget Definition) –Rulesets Keys and Translations –Control Chartfield –Offsets –Excluded Account Types 5)Source Transaction Types 6)Associating Ledger Groups Defaults Overrides

7. 7 SetIDs, Business Units, and TableSet Sharing Configure Commitment Control for each SetID that will utilize Ledger_KK for budgets, encumbrances, and/or expenditures Commitment Control Ledger Groups can be shared across SetIDs and Business Units If there are multiple Business Units with different SetIDs for GL Ledger Groups, an identical Commitment Control Ledger Groups must be defined for each SetID in order to share a control budget definition –Example: OSU will use the BU and SetID of UNIV for all cost share transactions and the BU and SetID of OSURF for all sponsored activity. Commitment Control options will be set up for both the UNIV and OSURF SetIDs to allow for different budget setup options and budget processing treatment for cost share versus sponsored costs.

8. 8 Detail Ledgers For each SetID, establish detailed ledgers to track different types of commitment control activity The Commitment Control process writes transaction detail to the detail ledgers during budget posting and budget checking Navigation: General Ledger > Ledgers > Detail Ledgers –Example: For each SetID, OSU will set up multiple detailed ledgers for each combination of transaction type (budget, encumbrance, expenditure) and budget translation level (overall and category) PRJ_BD_OVR: Project Budget Transactions at Overall Amount PRJ_PE_OVR: Project Pre-Encumbrances at Overall Amount PRJ_EX_OVR: Project Expenditures at Overall Amount PRJ_BD_CAT: Project Budget Transactions at Category Level PRJ_PE_CAT: Project Pre-Encumbrances at Category Level PRJ_EX_CAT : Project Expenditures at Category Level

9. 9 Ledger Groups Detailed Ledgers (previous slide) are mapped to Ledger Groups Ledger Groups must be defined prior to defining the Control Budget Definitions for Commitment Control Navigation: General Ledger > Ledgers > Ledger Groups –Example: OSU Ledger Groups KK_PRJ_OVR to store all project related budgets, encumbrances, and expenses for sponsored projects at an overall level KK_PRJ_CAT to store all project related budgets, encumbrances, and expenses for sponsored projects at a category level ACTUALS will be used for actual transactions on LEDGER

10. 10 Budget Definition: Control Budget Options Control Budget Definitions contain the default translation and processing rules for each Commitment Control Ledger Group Navigation: Commitment Control > Define Controlled Budgets > Budget Setup > Budget Definitions –Example: OSU has created budget definitions for each SetID KK_PRJ_OVR: All project related budgets, encumbrances, and expenses for sponsored projects will be translated and stored at an overall level. This represents the parent budget definition. KK_PRJ_CAT: All project related budgets, encumbrances, and expenses for sponsored projects will be translated and stored at the category level. This represents the child budget definition. Benefits –Ability to create budgets and spend at either the budget category or overall amount (bottom line) for a project. –Ability to easily switch between budget category and overall control

11. 11 Budget Definition: Control Budget Options Ability to select default control options for Overall/Category Ledger Groups Control Budget Options can be overridden by the Control Chartfield and Source Transaction Types Example: OSU has defined the following Control Options –KK_PRJ_OVR = Control Initial Document for Overall Budgets –KK_PRJ_CAT = Track w/o Budget for Category Budgets

12. 12 Budget Definition: Control Options Defined Control: Transactions that cause budget exceptions will generate errors or warnings. Tracking w/ Budget : Track transaction amounts against a budget but do not issue error exceptions unless there is no corresponding budget row. Pass if budget row exists, even for a zero amount, but issue warnings for exceptions. Track w/o Budget: Track transactions even if there is no budget set up. If a budget row exists and there are exceptions, issue warnings. Control Initial Document: Control expenditures against the initial document only. Transactions are stopped and error messages issued only if budget constraints would be exceeded when the initial document is processed. Transactions that pass budget checking on the initial document, such as a purchase requisition, are automatically passed on all subsequent documents, such as a purchase order or payment voucher, even if budget constraints are exceeded at the time they are processed.

13. 13 Rulesets: Keys and Translations Rulesets contain the ChartFields that are required for transactions eligible for budget posting/checking Multiple Rulesets can be created using a tree or from/to ranges of the Ruleset Chartfield For the Category Ledger Group (KK_PRJ_CAT), Account is required since it will be translated during the budget posting/checking process

14. 14 Control Chartfield The Control Option, Status, and Begin/End Dates on this page will override the options on the Control Budget Options page PeopleSoft recommends “Prj/Grt” as the Control Chartfield for Grants The “Chartfield Values” section is updated with the Generate Award process for projects with pre-award spending

15. 15 Excluded Account Types Account types should be excluded if they do not impact remaining spending authority.

16. 16 Source Transaction Types Allows certain transaction types to have different control options that override the budget definition Navigation: Commitment Control > Define Controlled Budgets > Budget Setup > Source Transactions –Example: The Source Transaction Type of F&A is given a Control Option of “Track w/o Budget.” The Control Option of “Control Initial Document” on the Budget Definition for KK_PRJ_OVR will be overridden for F&A transactions. Defaults Overrides

17. 17 Associating Commitment Control Ledger Groups Ledgers for a Unit –Assign a Ledger Group to a Business Unit and GL Ledger Group Ability to associate as many Commitment Control Ledger Groups with one GL Ledger Group for a Business Unit Budget Attributes (optional) –Associate additional budget processing criteria for a Ledger Group by business unit and chartfield combination Revenue and Expenditure Budgets (optional) –Associate revenue and expenditure budgets in order to allow revenue to impact remaining spending authority –Options for revenue impact on remaining spending authority: Greater of Budget or Collected Greater of Budget or Recognized Lesser of Budget or Collected Lesser of Budget or Recognized

18. 18 Budget Definition Summary: OSU Example KK_PRJ_OVR Budget Definition: –Sponsored Transactions: Controls sponsored costs for sponsored projects at the overall level. Control option is Control Initial Document. The control option will only be overridden for preliminary projects. –Cost Share Transactions: Tracks cost share costs for sponsored projects at the overall level. Control option is always Track without Budget. The ruleset and control chartfield page prevent non-sponsored project activity from being picked up by this budget definition. KK_PRJ_CAT Budget Definition: –Sponsored Transactions: Tracks sponsored costs for sponsored projects at the category level. Control option is Track without Budget. The control option is changed on the control chartfield page to Control Initial Document for projects that should be controlled at the category level. Project begin and end dates are controlled from here. Project budgets are always entered at the category level. –Cost Share Transactions: Tracks cost share costs for sponsored projects at the category level. Control option is always Track without Budget. The ruleset and control chartfield page prevent non-sponsored project activity from being picked up by this budget definition. Project budgets are always entered at the category level.

19. 19 Topic 4 – Budget Setup for Grants Project Budgets are established within the Grants module and are copied from the proposal via the Generate Award process Additional attributes must be added to each budget line: –General Ledger Detail –Commitment Control Detail –Grants Detail Project Budgets are posted to Commitment Control and Proj_Resource All project budget adjustments are entered using the Grants module Navigation: Grants > Awards > Project Budget

20. 20 Project Budget in Grants

21. 21 Project Budget in Proj_Resource and Ledger_KK Proj_Resource Ledger_KK

22. 22 Commitment Control Inquiry

23. 23 Step 5 – Budget Checking Process In order to commit or spend against a posted budget, an encumbrance or expense must be budget checked Types of Transactions Subject to Budget Checking: –Journal Entries (often includes feeder systems and salary feeds) –Purchase Orders –Vouchers, Non-PO Vouchers –F&A Expense The Budget Checking process evaluates several edits and issues warning/error messages depending on the control option

24. 24 Budget Checking Process

25. 25 Purchase Order in Proj_Resource and Ledger_KK Proj_Resource Ledger_KK

26. 26 Contact Information Laura Zimmermann Manager, Huron Consulting Group LZimmermann@huronconsultinggroup.com