Grant Execution: Implementing Partners. Table of Contents

Transcription

1 Grant Execution: Table of Contents Overview.. 2 Chapter 1 Background..2 Chapter 2 Advance to Implementing Partner..4 Chapter 3 Settlement Process 17 Chapter 4 Multiple Advances and Settlements 28 Chapter 5 Refund from Implementing Partner 36 Umoja Training 1/45

2 Grant Execution: Overview The United Nations at times achieves its program objectives by collaborating with Implementing Partners to deliver on mandated activities. Objectives This job-aid is intended to assist users in processing payments to (IP). It provides guidance on processing an advance to the IP and the subsequent steps to settle the advance and record the expense for the implementation of the program. Enterprise Roles GM Account User, GM Grants Creator, GM Account Approver, FI Accounts Payable User, FI Accounts Payable Senior User * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Chapter 1 Background There is distinction in the process followed to transfer funds to an End-Beneficiary (EB) and to transfer funds to an Implementing Partner. Though both processes have supporting funding agreements, the accounting treatment is different for each transaction. Funds provided to an End-Beneficiary are considered as grants-out and recorded as an expense when the disbursement is processed. The expenses for an EB are recorded directly against the Main Implementation grant (M1 grant) or a Simple grant (S1). No Pass-through grants (P1) is required. On the other hand, disbursements made to an Implementing Partner (IP) are recorded as an advance in the books until the IP has fulfilled the contractual obligations. A Pass-through (P1) grant must be created. For this scenario, the following are required before an advance to an implementing partner is processed. 1. Simple Grant (S1) or Main Implement Grant (M1) in Award/Operational Status 2. Pass-through Grant (P1) in Award/Operational Status 3. Project/WBSE in Released and Budgeted Status 4. Released Budget in either S1 or M1 Grant 5. Relationship established between S1 or M1 grant and P1 grant 6. Object Mapper established in either S1 grant or M1 grant Umoja Training 2/45

3 Grant Execution: Since IPSAS requires that transfer of funds to an Implementing Partner be treated as advance, the full scenario includes the settlement of such advances. The major steps in this process are: A. Advance Process: 1. Create Purchase Order in SRM [GM Accounts User or GM Grants Creator] 2. Approve PO in workflow [GM Accounts Approver] 3. Create Down Payment Request (F-47) [FI Accounts Payable User] 4. Approve Down Payment Request in workflow [FI Accounts Payable Senior User] 5. Process payment (F110 and FPR_LIST) [Treasury role] 6. Review Cash Balance Report B. Settlement Process: 1. Create Service Entry Sheet upon receipt of IP report [GM Accounts User or GM Grants Creator] 2. Accept (approve) Service Entry Sheet (GM Accounts Approver) 3. Create Evaluated Receipt Settlement [FI Accounts Payable User] 4. Process Payment in F110 (if additional payment is to be made) [Treasury- Cashier] 5. Clear vendor entries [GM Accounts User] ****************************************************************************** Umoja Training 3/45

4 Grant Execution: Chapter 2 Advance to Implementing Partner A. How to Access the Supplier Relationship Management (SRM) Portal To get into SRM, select 2 Umoja Portal on the Umoja Dashboard. On the next screen, a pop-up box requiring your login id and password are required. Enter your credentials and click Logon. B. Create Purchase Order in SRM (Role: GM accounts user/gm creator) A shopping cart is not required to create a purchase order for grants. Umoja Training 4/45

5 Grant Execution: 1. On the initial screen, select Purchasing, then Purchase order (below Create Documents) to start the process. 2. Select the appropriate Purchase Order type. 3. Add the following mandatory information. Note that all fields with * require an input before the system allows you to move ahead. a. Supplier - the Implementing Partner BP number (vendor) ex (UNDP DRC) b. Requester - the requesting project manager (use the drop-down and search by name) c. Recipient - the requesting project manager (use the drop-down and search by name) d. Location - UN program/office (use the drop-down and search by name) e. Purchasing Organization - UN Purchasing Organization (use the drop-down and search by name) Umoja Training 5/45

6 Grant Execution: f. Purchasing Group - appropriate UN program/office (use the drop-down and search by name) 4. On the Item Overview screen below, select Service as the Item Type. Move to the field for Product ID and select the appropriate service material(s). (Each service material is linked to a commitment item in Funds Management.) Select the appropriate service based on the funding agreement. Umoja Training 6/45

7 Grant Execution: Note re: Budget for If the budget was created and approved earlier using the sponsored class for AP-1 (direct and indirect costs), the system will not check the limit for each service line item as long as total of all line items is within the amount approved for AP1-Direct cost. If the budget was created using BP1 sponsored classes, each individual sponsored class was approved with a specific amount that cannot be exceeded when creating each service line item in the PO. When entering the quantity, enter the amount that you intend to transfer to the IP. For example, enter 10,000 in the quantity if you are transferring USD 10,000 for Travel. In the Gross Price field, enter USD 1. Multiply your quantity of 10,000 and gross price of USD 1 will give you the amount USD 10,000. This process allows you to be more flexible when processing the settlement (the service entry sheet) in the downstream process. 5. Scroll to the right and locate the Account Assignment column. Select either Order or WBS element. This would depend on the cost object that was used when the budget for the Pass-through grant (P1) was processed. Enter the number on the next field. Note: A Center (CC) should not be entered for GM funds. 6. Click the Header tab and move your cursor to the drop-down icon of the Financial Rules field. Note that this is a mandatory field. Select NA from the drop-down list and click OK. Umoja Training 7/45

8 Grant Execution: 7. From the screen above, go to the Details of the service line item by first moving to back to the tab Overview, highlighting the specific line item and then clicking Details. Locate the tab General Data and the field Required and enter the date of delivery. This is a mandatory field in SRM, although not as important for the grants process. On the field where Between is defaulted, select On from the drop-down list and enter today s date. Umoja Training 8/45

9 Grant Execution: 8. To define the spending tolerance level, locate the Underdelivery/Overdelivery Tolerance fields on the right side of the screen on the same tab (General Data). Enter the tolerance percentage on the field for Overdelivery if applicable. If the IP is allowed 100% tolerance in the different service lines of the PO, tick the unlimited box. Umoja Training 9/45

10 Grant Execution: Note re: PO Tolerance Level The tolerance level allows the amount entered in the service entry sheet (see Settlement Process) to exceed the advance amount based on the percentage defined in the PO. Note that this is allowed by line item only. 9. Repeat steps 4, 5, 6, 7 and 8 for additional service line items stated in the funding agreement. Note that step 8 is optional. 10. When you have entered all the service line items, click Check to validate the entries. If there are no errors, the system generates a message that the PO is correct. 11. Click Order to save the PO. This action automatically routes the PO to the workflow inbox of the GM Approver. Note the PO number before exiting the screen. Click Close to exit. C. Approve PO in Workflow (Role: GM Accounts Approver) Umoja Training 10/45

11 Grant Execution: The staff member with the GM Approver role enters his/her userid in the SRM portal. 1. Find the PO for approval. You may have to refresh after you ve logged in. In rare cases you may have to search for the PO using the PO number. Screen shot 2. Once you have located the PO, review the document. Click Approve to release the PO. Close this window and log out. Once approved in SRM portal, the PO is automatically reflected in ECC. To display a PO, enter the t-code ME23N. No changes can be made to the PO in the ECC system; however, you will be able to monitor the PO history for the advances (down-payment requests and down payment), the service entry sheets and the invoices (settlement). D. Create Down-Payment Request (Role: FI Accounts Payable User) Umoja Training 11/45

12 Grant Execution: To process an advance for an Implementing Partner, the UN uses the down-payment request/down-payment functionality of SAP. The down-payment request is a noted item or a memo entry. 1. Enter the t-code F-47. On the screen below, enter the appropriate document and posting date. Leave the default document type as KA. Enter the appropriate currency. The vendor number of the Implementing Partner is required to proceed. Indicate the special GL indicator Y to direct the entry from the default reconciliation account to the Advance to IP reconciliation account. Click Enter. 2. On the next screen, enter the following required information: Amount Due date Payment method Purchasing document/line item no. (Review the line item by displaying PO if necessary) [The PO derives the full account assignment so it is not necessary to enter the Order/WBS element, grant, functional area] Umoja Training 12/45

13 Grant Execution: 3. Click the button Additional Data to enter the Partner Bank. This is mandatory information to be provided by the user. This step will allow the system to direct the deposit to the correct bank account especially if the payee has several bank accounts. Repeat steps #2 and #3 above for the next line items if there are several line items to be created for the advance. Umoja Training 13/45

14 Grant Execution: E. Approve down-payment request in Workflow (Role: FI Accounts Payable Senior User) Selects the Workflow icon from the main screen. Note the two levels of approval. On the Inbox, select Workflow>Grouped according to Task>Down-payment Approving Agent Select the document number and click Approve. Following the approval, the system generates a noted item. This document does not update the account balance and is considered a memo entry with only one line entry. The system generates the FI document debiting the Advance account only when the funds are disbursed during the Treasury payment run. Use ME23N to display the PO. Note the existence of the down-payment request in the PO History. Umoja Training 14/45

15 Grant Execution: F. Process payment (Role: Treasury-Cashier) After the down-payment request is approved through the workflow, the system picks it automatically in the payment run (F110) for the disbursement process. The Cashier reviews the payment list (FPRL_LIST) and submits it to the Approving Officers to release the payments. The payment process is not included in this job-aid. If you need the detailed steps, please refer to the Level 3 training material for Payment Processing. The screen shot below shows the accounting entry once the payment is processed. Note the debit to the advance GL account and the credit to Bank-EFT In. G. Review Cash Balance Report T-code: ZGMBUDGET_REL On the initial screen, enter both external and internal funds (32xxx and 33xxx) and the parent grant (not the pass through grant). On Report Selection, choose radio button available cash balance. (Note that selecting cash inflows will provide cash forecast rather than available cash balance.) On Report Output Selection, select By fund/grant. Umoja Training 15/45

16 Grant Execution: Click Execute. In the example below, note that cash has been reduced by USD 2,000 and it s posted against the Pass through grant. View the GM doc by double clicking on the amount. ****************************************************************************** Umoja Training 16/45

17 Grant Execution: Chapter 3 Settlement Process A. Create and approve Service Entry Sheet (Role: GM Accounts User or GM Creator) The user (with the enterprise role of a GM Account User) creates and approves a service entry sheet to record expenses reported by the Implementing Partner regarding the execution of program activities. The expenses outlined in the report are recorded as services provided to the UN. T-code: ML81N 1. On the initial screen, click Other Purchase Order number. When the pop-up box appears, enter the PO number. 2. Click Create Entry Sheet. Umoja Training 17/45

18 Grant Execution: 3. Insert a short text 4. On the bottom on the screen, locate Service Sel and click button. 5. Click Enter. 6. Highlight the lines as appropriate and then click services icon. Umoja Training 18/45

19 Grant Execution: 7. Change the quantities to reflect the IP s expenditure report. If the expenditure report is 100% in line with the advance then leave the quantities as is. Note that we are using the quantity field to enter the expense amounts. 8. There is no workflow in SES. The GM Account User or Creator also approves the service entry sheet by clicking the icon Accept. Accept 9. Note the message Will be accepted 10. Save the SES. 11. View the PO history using the t-code ME23N. The service entry sheet number is now displayed. At the same time, a goods receipt (GR) document is generated by the system. The corresponding accounting entries are reflected against the GR document, not against the SES docoment. Umoja Training 19/45

20 Grant Execution: To locate the accounting entries, click the GR document number and look for the Doc info tab, then click the button FI Documents. Umoja Training 20/45

21 Grant Execution: Note: The pop-up box shows two accounting entry documents. The first one is for the settlement of the advance and the second one is for the expense. Note that the accounting entry below shows a debit to AP UN Family and the credit is to Advance UN Family. Umoja Training 21/45

22 Grant Execution: On the data entry view, click the advance line item (credit), the system automatically created the payment block A in order to prevent further processing of this advance. Likewise, the system creates payment block G on the AP UN Family to prevent further processing of this debit to AP. The payment block is the system control to prevent including these line items in the payment run. PLEASE DO NOT REMOVE THESE PAYMENT BLOCKS. The GR document shows the accounting entry that debits the IP expense and credits AP- Goods Receipt. Umoja Training 22/45

23 Grant Execution: B. Create and Post the Invoice (Role: FI Accounts Payable Senior User) The settlement of the advance process is not complete without the invoice process. The invoice debits AP Ex Goods Receipt and credits AP UN Family (the account that was debited earlier in the goods receipt when the advance was settled). For this process, we use the Evaluated Receipt Settlement (MRRL) to simplify the steps. Alternatively, the manual invoice processing (MIR7) can be used. In order to process this transaction, it is necessary to first check if the information is updated in the Business Partner profile of the Implementing Partner. To do this, the user should change the BP role display to Z00011 UN vendor role. Umoja Training 23/45

24 Grant Execution: Select the Purchasing button from the toolbar and click on the Purchasing Data tab. Scroll down to locate Control data. The last three radio buttons are relevant to Evaluated Receipt Settlement and should be turned on. T-code MRRL (self-invoicing) This transaction code is used to automatically generate the invoice document. On the initial screen, enter the PO number. Initially, run the process in test run mode. You should see the vendor, PO number and reference number on the screen. This allows the user to verify the PO number and the SES number. Click the back button. Remove the test run mode for production run and click Execute. Umoja Training 24/45

25 Grant Execution: On the next screen, the FI document (invoice number) is generated based on the service entry sheet. Double click the FI document to see the accounting entry. The system debits AP Exch Goods Receipt and credits AP UN Family. Umoja Training 25/45

26 Grant Execution: In addition, the system automatically creats a payment block in the credit line item to prevent inadvertent processing of this account in the payment run. PLEASE DO NOT REMOVE THIS PAYMENT BLOCK. In the payment history of the PO, locate the invoice by double-clicking on the document number. On the next screen, click the button Follow- on document Umoja Training 26/45

27 Grant Execution: The pop-up box for the documents will appear. Click the Accounting and GM documents. Umoja Training 27/45

28 Grant Execution: Chapter 4 Multiple Advances and Settlements The UN may approve multiple advances for each service line item to an Implementing Partner. In those cases, each advance (which can include multiple service line items) is accounted for separately and recorded (with a distinct document number) on the PO history as shown below. Each service line item may have an advance that needs to be tracked separately through the down-payment request and the service entry sheet. In the case above, the advances for the first tranche follow: IP-Equipment, Vehicles and Furniture USD 2,000 IP-Indirect Support Costs USD 200 IP-Operating and Other Direct Costs USD 2,000 Remember to enter the service line item number 1 and sub-item number 1 (and not 10 as reflected in the PO). If you enter 10, the system will not recognize this sub-item number since Umoja Training 28/45

29 Grant Execution: the PO is created in SRM. The down-payment request for the advance is created with F-47 as follows. Service line item 1, sub-item 1 Service line item 1, sub-item 2 Service line item 1, sub-item 3 Umoja Training 29/45

30 Grant Execution: The down-payment (advance) is shown below. Note, each line is linked to the correct service line item and sub-item number when you double click each line. To continue with the settlement process, remember to note the correct service line item when you are entering the quantity. Being aware of the correct service line item avoids the reversal of incorrect accounting entries. The settlement (the amounts reported by the implementing partner) may be partial; hence, amounts may not correspond to advance. Below shows a partial settlement of the advances above. Settlement 1: IP-Equipment, Vehicles and Furniture USD 1,800 IP-Indirect Support Costs USD 150 IP-Operating and Other Direct Costs USD 1,700 Settlement 2: In the example above, the Implementing Partner submitted a report with the following amounts: Umoja Training 30/45

31 Grant Execution: IP-Equipment, Vehicles and Furniture USD 220 (USD 20 more than initial advance; system allowed this as tolerance level was set to 10%) IP-Indirect Support Costs USD 60 (USD 10 more than the initial advance; system allowed this because tolerance level was set to 10%) IP-Operating and Other Direct Costs USD 300 As noted earlier, the tolerance level allows the amount entered in the service entry sheet to exceed the advance amount based on the percentage defined in the PO per line item. In the current example, the second tranche advances were recorded at full amount while the settlements were reported less covering the excess amounts reported in the first settlement. Below is a chart that shows how advances and settlements are tracked. Umoja Training 31/45

32 Grant Execution: First Tranche Initial Advance Settlement 1 Settlement 2 FI SES SES # # # GR GR # # Recovery of excess amount per line item Balance Serv item 1, 1 IP - Equip, Vehicles & Furn Serv item 1, 2 IP - Indirect Support Costs Serv item 1, 3 IP - Oper & Other Direct Costs Second Tranche Sub-total Second advance Settlement 1 Balance FI # SES # GR # Serv item 1, 1 IP - Equip, Vehicles & Furn Serv item 1, 2 IP - Indirect Support Costs Serv item 1, 3 IP - Oper & Other Direct Costs Sub-total Total advance per PO 8300 To summarize, the overall PO amount of USD 8,700 transferred to the Implementing Partner in two tranches. The first tranche was settled through two service entry sheets and the last tranche was settled taking into consideration the excess expense amount reported for the settlement of the first tranche. The chart above serves as a guide in tracking advances and settlements. ****************************************************************************** Umoja Training 32/45

33 Grant Execution: Chapter 5 Reports The following reports are useful in the Pass-through grant execution. A. Grant Line item Display Report This report provides the user with all the transactions recorded against the grant. The user should use the value types to understand the type of transaction processed. Menu path: Accounting>Public Sector Management>Grants Management>Grantee Management>Information System> S_PLN_ Grants Management: Line Item Display Transaction code S_PLN_ On the initial screen, enter the grant and fund. Umoja Training 33/45

34 Grant Execution: B. GM Cash Balance Report (ZGMBUDGET_REL) This report provides the following information: cash inflow projection based on the receivables recorded cash balance for a specific grant Transaction code ZGMBUDGET_REL Select the appropriate radio button and click Execute. C. Funds Management Budget Availability Report This report reflects the approved budget, budget consumption and budget balance. Transaction code: FMAVCR02 Umoja Training 34/45

35 Grant Execution: On the initial screen, enter the grant, fund, fund center or funded program as the case may be. Note that selecting a specific grant limits the report to only the transactions affecting the grant. If you choose to enter the fund, the system will provide you with a list of grants or a list of fund centers. Selecting the fund center or funded program will likewise generate only the transaction for the specific fund or fund center. Click Execute. Umoja Training 35/45

36 Grant Execution: Chapter 5 Refund from Implementing Partner (Role: GM Accounts Approver) Occasionally the IP will have received a larger advance than they expense. In such cases, the IP will do a refund to the UN. 1) In the example below, the Purchase Order and Advance was for USD 2,500. 2) The IP submits a final expenditure report for USD 1,300. In accordance with the funding agreement, the IP is required to refund the UN USD 1,200. The corresponding Service Entry Sheet and Invoice is recorded for the USD 1,300 as reflected below. 3) In order to release the budget back to the Grant the Purchase Order needs to be closed. (Role: GM Accounts User or Creator) Under Items and the tab related documents the user can set each of the PO items as complete. Change no further confirmation and no further invoice to yes for each item of the PO. Umoja Training 36/45

37 Grant Execution: Item 1 Item 2 Item 3 Umoja Training 37/45

38 Grant Execution: 4) Click Order and the PO will be routed to the GMACCTAPR through the work flow 5) The GMACCTAPR approves the changes to the PO. 6) The next step is to clear the open vendor items (Downpayment clearing document and Invoice) Transaction code F-44 (Role: FI USER AP) i) Insert the vendor ii) Insert a filter (e.g. posting date or document numbers) Umoja Training 38/45

39 Grant Execution: iii) Process Open Items iv) Insert the filter criteria (in below example it is the posting date) Umoja Training 39/45

40 Grant Execution: v) Process Open Items Umoja Training 40/45

41 Grant Execution: vi) Double click on each line to be cleared. The not assigned amount is now zero. vii) Post the document 7) The IP then transfers the refund (USD 1,200) to the designated UN bank account. 8) In this scenario, the cash is initially posted against the Unapplied Cash account and applied using transaction code F-28 (post incoming payments) (Role: FI USER AR) i) Insert document date ii) Insert a reference iii) Insert the account ( AP Unapplied Cash) iv) Insert the amount v) Insert the vendor account vi) Insert the account type (K vendor) vii) Insert the special G/L indicator (Y advance to IP) Umoja Training 41/45

42 Grant Execution: 9) Process open items 10) Double click on the lines to be cleared (down payment clearing documents and original payment documents). The not assigned amount is now zero. Umoja Training 42/45

43 Grant Execution: 11) Post the document 12) Run the budget reports and cash balance reports to verify that the budget and cash has been returned to the underlying Pass through Grant (FMAVCR02 and ZGMBUDGET_REL) Umoja Training 43/45

44 Grant Execution: FMAVCR02 ZGMBUDGET_REL Drill down on cash balance for P Grant. 13) The remaining budget under the P Grant can now be returned to the parent (M/S) Grant. ****************************************************************************** Umoja Training 44/45

45 Grant Execution: Revision History (Soft Copy only) Date Version Prepared by Description 14 Nov Initial draft Peter Jonsson 12 Jan Job-aid Elsa Bonecillo-Deniega 27 May Incorporated Refund from IP section Peter Jonsson 30 Nov Final Review Felista Ondari Umoja Training 45/45