R12 Public Sector Grants/Projects Integration Insight

Transcription

1 R12 Public Sector Grants/Projects Integration Insight Sandra Eichelberger Metropolitan Atlanta Rapid Transit Authority (MARTA) Sridhar Edupalli Metropolitan Atlanta Rapid Transit Authority (MARTA) Abstract This paper explains how MARTA integrated Grants/Projects in R12 to meet its requirements. Discuss the process of setting up New Projects, Awards, Funding & Budgeting, Projects Auto Accounting. It will discuss the tight integration between Grants and Projects in R12 and highlight Accounting changes between R11i and R12. It will set the Business Case for setting up Projects Auto Accounting. This paper will share lessons learned and recommendations for companies looking for upgrading to R12 s Projects and Grants Accounting modules. Background The Metropolitan Atlanta Rapid Transit Authority (MARTA) is a semi-governmental agency created by the State of Georgia. MARTA has 38 heavy rail stations, some 375 rail cars, 600 buses and over 4000 employees. It also operates a separate system for mobility-challenged passengers with 110 paratransit vans, plus a fully accredited police department. MARTA is a not-for-profit agency, getting its operating funds primarily from the fare box and a penny sales tax from two counties in Georgia. Unlike most transit agencies, no operating revenue comes from state or federal funds. MARTA is currently running the suite of Oracle Financials R12.1.3, including Projects and Grants Accounting. The agency initially went live with Oracle R11i in October of The upgrade to R12 was completed in November As the ninth largest Transit Agency in the United States, MARTA is heavily dependent on outside funding for many capital and non-capital Projects. Certain funding comes from local sources such as sales tax revenues and state and private awards, but a significant portion of the funding comes from Federal grants and awards from a number of agencies. Each of these funding sources has its own reporting requirements. MARTA is audited often by these sources. Therefore tracking costs associated with these Awards and Projects is critical to MARTA s financial future. The situation is further complicated by how the funding is used. An Award may fund multiple Projects, and a Project may be funded by multiple Awards. Sometimes a Project may be funded by one group of Awards for a COLLABORATE 13 Page 1

2 period, then switches to another group of sources when either the funding or the time period for the award runs out. Capital Projects at MARTA can last a very long period of time, sometimes decades. Accounting Background Setup of Projects and Grants Accounting is based in large part upon the General Ledger requirements. The Key Flex Fields for GL accounting are as follows: 1) Fund 4 characters 2) Account 6 characters 3) Cost Center 5 characters 4) Site 3 characters 5) Program 5 characters 6) Future 1 6 characters (not used all 0) 7) Future 2 6 characters (not used all 0) In entering data for project expenditures, MARTA has employed an acronym called POETA. POETA stands for Project Organization Expenditure Type Task Award Each aspect of POETA is required for entering project expenditures, and it is from POETA that the Accounting is built. Accounting Rules A number of Accounting rules were established at MARTA to handle translation of POETA fields to the General Ledger Key Flex Fields. There are some 37 rules in total, most defining how the AutoAccounting Lookup Sets are used. Most of the General Ledger Key Flex Fields are built using AutoAccounting Lookup Sets. Awards are assigned to a Fund at Award creation. The general Operating Fund for MARTA is 1000 and is not generally used for Awards. MARTA maintains a large number of Funds. The Fund may not be exclusive to the Award, though it frequently is. Accounts are built from Expenditure Types. MARTA maintains an AutoAccounting Lookup Set called Exp Type to GL Account. This ties the verbiage used for the Expenditure to the appropriate Cost Center. Cost Center is derived via the Organization who expenses the item. The Organization is tied via an AutoAccounting Lookup Set called Exp Org to GL Cost Center. Site is built from an AutoAccounting Lookup Set called Exp Site to GL Site. Site is entered as an addition to POETA. Program is built from an AutoAccounting Lookup Set called Class Code to GL Program Seg. This is built from the NTD Classification which comes from the Project, assigned upon Project creation. Additionally, an AutoAccounting Lookup Set is defined to create the Clearing Account Program Segment for the Project. The Lookup Set used is called Project Type to Program Clring. It is based on the Project Type defined at Project creation. COLLABORATE 13 Page 2

3 Certain rules handle Burden Distributed Constants creating a Burden Account of with a Cost Center The rules for Capital CIP Constants create the accounting , etc. Special Rules were created using the Lookup Sets. One is Cost Center Clearing SQL, which prescribes special rules in the case of Inventory transactions. MARTA uses a third party system, Maximus, to manage much of the floor inventory of the Bus and Rail shops. Initial Setup To effectively manage funded projects, Oracle Grants Accounting includes award templates that provide an easy method of recording the appropriate level of data and assists in maintaining consistency and standardization of award details. MARTA has created six standard templates for Awards, and six templates for Projects. The Award templates vary according to the sources of the award; the Project templates vary as to the type of project and if it is a Standard or Non-Standard project, per MARTA definition. Once an Award template is selected and the Award s basic information is included, MARTA uses a Defined Flex Field to specify which Fund the Award should use. Projects are also set up from templates. The required elements for MARTA projects are Project Number and Name, Classification, Project Manager, and Start and End Dates. Projects templates also contain a variety of Task and Sub-Tasks, depending on the type of Project. Once the Project is set up, the Project needs to be assigned to an Award (or group of Awards) and initial funding is assigned. The Award/Project is then budgeted and baselined. It is possible at this point to budget the Project at the Task level, if so desired. Most MARTA Award budgets are done at the Top Task level. At this point the Project s Funding Pattern is defined. The funding pattern is determined by the percentage that expenses are expected to draw from Awards. For example, many Federal Awards require a local dollar for dollar match. Therefore the Funding Pattern for the project would be 50% Federal Award and 50% local match Award. The Funding Pattern may change over time as the allocated dollars are depleted in the associated Awards. It may also change because of time constraints an Award may be only valid for certain dates. In both cases, the Funding Pattern would be changed to accommodate the change in the source of monies. End date the prior funding pattern and create a new one. Please note that the Funding Pattern is a required element for expenses to be charged against the Project. At MARTA, most Funding Patterns are done at the Top Task level, but certain Projects fund at the Task level. Without a Funding Pattern, the Accounting Rules using the AutoAccounting Lookup Sets do not function properly and the Distribution Accounts will not be built. A very important setup for MARTA is under Setup > System > Grants Accounting, the Award Distribution Options tab. Enable Automatic Award Distribution is checked, and the verbiage Auto Allocate is entered for the Default Distribution Award Number. Additionally, MARTA set up the Account Generator to generate Project-related Accounts in a number of applications and processes, including Purchasing and Payables. Expenses Expenses against a MARTA Project generally begin in iprocurement. A requisition is entered and Project data is entered. POETA is enforced for all Projects at MARTA. In this example, the POETA is as follows: Project: Organization: Dir of Tech Enterprise Applications COLLABORATE 13 Page 3

4 Expenditure Type: OP-OTHER OFFICE SUPPLIES Task: Award: Auto Allocate The charge account shown is a user default, but will change as soon as the POETA is interpreted and the Accounts are built. This Project s Funding Pattern is set up to split expenses between two Awards, LOC-3502B and GA There are two accounting lines built, one for each award. Award GA results in KFF Award LOC-3502B produces KFF The split is 50-50, per Project Funding. Note: Encumbrance Accounting comes into effect at this point, and will remain into effect until either the Requisition is cancelled, or the associated Purchase Order is created, invoiced, and paid. It is only then that the Encumbrance is released. Once the Requisition is approved, the Buyer will Auto-Create a Purchase Order from it. All the POETA is retained, and the accounting flows through. It is possible to create a PO without a requisition. In that case, the Project information would be entered the PO through the Shipments > Distributions > Projects tab. Once POETA is entered, the user is required to go to the top of the screen and click on Tools > Award Distribution. This starts the Project Account Generation process, which creates not only the Charge account, but also offsetting Accrual, Budget, and Variance accounts, all defined by AutoAccounting Rules and Lookup Sets. COLLABORATE 13 Page 4

5 Payments, Receiving and Posting to General Ledger After the Purchase Order has been approved and received, usually the Supplier invoices Payables. An Invoice is created in Oracle, matching it to the Purchase Order. The Matching process brings with it all the POETA and the associated Distribution information. The Invoice is then paid, and Payables interfaces the transaction to General Ledger. Once Payment of the Invoice is complete, the Award s funding source is invoiced by Accounts Receivable. For most Federal Grants, the invoicing may occur no earlier than three business days after the Supplier Invoice has been paid. Upon receipt of the Grant funds, the Revenue is generally applied to a Revenue Project, usually a dummy project called This project is assigned to a number of Awards, and revenue is recognized into the various Awards through this Project. In order to recognize the Expenditure into the Projects/Grants Accounting modules, Accounting runs several seeded interfaces. For Supplier Invoice Expenses, that interface is request PRC: Interface Supplier Costs. MARTA also recognizes Project expenses from a number of other sources, notably Labor and labor-related Burdened Costs. Custom Reporting at MARTA MARTA has found that its reporting needs have not been completely satisfied by the seeded reports provided by Oracle. Therefore it has created a number of additional reports to fulfill budgeting and reporting requirements. Here is a sampling of those reports created as Oracle Requests. MARTA Budget Item Project Summary There are three versions of this report: Summary, Detail, and Drilldown. MARTA Detail Transaction Register Report shows specific expense transaction for a date range, can be sorted in many ways. MARTA NON-LABOR DAILY CASH DISBURSE REPORT runs by date range MARTA LABOR DAILY CASH DISBURSE REPORT same as above, but for Labor and Burden expenses only. Additionally, MARTA has created a number of view-based reports using a 3 rd party tool. These reports are produced as spreadsheets. Here is a sampling: Marta - Forecast Cost Budget by Project and Task Shows budget specifics for a Project at the Task level MARTA PA Direct Invoices by Project shows Project Invoices that have no matched Purchase Order MARTA PA Project Encumbrance Details shows what is currently encumbered for specific Projects MARTA PA Expenditures by JE Line this goes against General Ledger, showing detail posting by period MARTA PA Expected MassAllocation Reclass - Lists a sample of the expected MassAllocation journal entries to reclassify capital expenditures between specific accounts Other Considerations GASB-51 GASB-51 is a fairly new statement defined by the US General Accounting Office to handle Grants given for handling Intangible Assets specifically computer software related Projects. GASB-51 says that Federal Awards may not fund the Planning or Post-Implementation portions of these Projects. As most Projects contain Tasks such as Planning, Development, Implementation, and Post-Implementation, this becomes an issue for MARTA. Most MARTA Projects are funded at the top task level, in other words all Tasks are funded by the same Award(s). For Projects that fall under GASB-51, MARTA has elected to fund the Projects at the Task Level. This means that Planning and Post-Implementation Tasks may have only local funding, while Development and Implementation Tasks could be funded by Federal Grants. The only issue MARTA has had with this has been the Burdened Labor interface to Projects, which seems to have trouble dealing with both Projects funded at the Top level and Projects funded at the Task level. There are manual adjustments for those at the Task level after every Payroll interface. COLLABORATE 13 Page 5

6 Differences Between R11i and R12 The following processes are different between releases 11i and 12: PRC: Interface Usage and Miscellaneous Costs to General Ledger is now obsolete, replaced by PRC: Generate Cost Accounting Events with Process Category = Miscellaneous Cost, and PRC: Create Accounting. PRC: Interface Total Burdened Costs to GL is obsolete, replaced by PRC: Generate Cost Accounting Events with Process Category = Total Burden Costs, and PRC: Create Accounting. PRC: Tieback Usage Costs from General Ledger is obsolete. GMS: Interface Revenue to General Ledger is obsolete, replaced by GMS: Generate Revenue Accounting Events and PRC: Create Accounting. PRC: Tieback Revenue from General Ledger is obsolete. PRC: Tieback Total Burdened Costs from General Ledger is obsolete. PRC: Interface Labor Cost to General Ledger is obsolete, replaced by PRC: Generate Cost Accounting Events with Process Category = Burden Costs, and PRC: Create Accounting. Lessons Learned/Recommendations Use a separate Fund for each Award. This makes tracking costs far simpler and the Accounting easier to reconcile. Keep all Project information in one location. MARTA still maintains a Primavera database with some Project budget and forecasting information. Plan reporting needs in advance, and require the user community to articulate its needs. We found out much later what our users really needed, and extended budgeted vs. actuals reporting has been a significant part of their requirements. Conclusion The process of setting up Projects and Grants Accounting is a complex one and requires a great deal of preplanning. It requires much in the way of initial Setup, from AutoAccounting Lookup Sets and AutoAccounting Rules to a significant and planned interface with General Ledger. Planning for the funding sources needs is also necessary. However with good planning it is possible to have a successful interface that benefits any governmental or not-forprofit agency s needs long term. COLLABORATE 13 Page 6