Automating Governmental Budgetary Accounting in Oracle Federal Financials A Case Study

Automating Governmental Automating Governmental Budgetary Accounting in Budgetary Accounting in

Oracle Federal FinancialsOracle Federal FinancialsA Case StudyA Case Study

IntroductionIntroduction

Bryan EckleSummit2Sea Consulting, [email protected] Oracle Solutions

What Will I Learn Today?What Will I Learn Today?

• How budgetary accounting works in Oracle Federal Financials

• Why Oracle Federal Financials has inherent governmental accounting limitations

• How to automate and validate the Transaction Code selection process, which drives federal Standard General Ledger (SGL) budgetary accounting

Presentation OutlinePresentation Outline

• Background

• Issues

• Contributing Factors

• Agency Requirements

• Solution Details

• Solution Examples

• Questions

Audience Participation - Audience Participation - EncouragedEncouraged

Who here is currently facing edit issues at their agency?

Definition of TermsDefinition of Terms

• SGL (Standard General Ledger) – The US federal government mandated natural account

• Transaction Code (TC) – Code used by Oracle Federal Financials to drive dual entry governmental accounting. The TC designates the SGL legs

• AFF – Accounting Flexfield, chart of account segment values used in every accounting transaction

Definition of TermsDefinition of Terms

• Funds Checking (Reservation) – A process by which specified transactions cannot reduce their respective summary account balances below $0– i.e. Every purchase is verified to ensure that a

budget is not overspent

• LOV (List of Values) – Oracle form feature that limits a selection for a particular field

BackgroundBackground

• US Federal Government Agency

• Oracle Federal Financials 11.5.9

BackgroundBackground

• Absolute Budgetary Control via summary templates

• Budgetary SGL Accounting driven by Transaction Codes (TCs)

• TCs specify the government mandated dual entry accounting

IssuesIssues

• Limited validation checks to catch or prevent incorrect accounting entries

• ‘Edit Checks’ performed after the fact via reporting

• Audit concerns

IssuesIssues

• Errors in accounting not discovered until entered in the system

• Time consuming fixes for Accounting Errors

– “After the fact”

Contributing FactorsContributing Factors

• Process design limitations– Performs combination and balance edit

checks, not upon entry / interface, but after the fact


• Oracle Federal Financials limitations– Uses account generator to automatically

populate the proprietary AFF based upon pre-defined rules. However, the dual entry budgetary requirements of federal agencies rely on the manual selection of the proper transaction codes by users.


• Oracle Federal Financials limitations– TCs not required within the forms, but

necessary for funds checking and budgetary (dual entry) accounting

– Cross Validation Rules not checked against the TC legs

– TCs modified after transactions have already been accounted and interfaced to the GL

– Enhanced Transaction Codes still required users to select the correct TC

Contributing Factors - User DrivenContributing Factors - User Driven

• User driven limitations– How does a typical user know the proper TC

for budgetary accounting?

Issues - ExamplesIssues - Examples

• User can enter an Obligation (PO) and leave the TC blank. If the TC is blank, then funds checking does not occur.

• It is possible to obligate more than what is allocated


• User can select an improper TC whose SGL legs violate a cross validation rule

• Unless these issues cause a lack of funding, incorrect accounting can occur


• The user can select the wrong TC and initiate incorrect budgetary accounting

Agency RequirementsAgency Requirements

• Standardize TC usage (budgetary SGL accounting) across the agency


• Prevent incorrect accounting at the point of entry, whether it be a user form or interface


• Provide a means to determine the correct budgetary accounting without user intervention


• For TC decision points, limit the TC LOV to only the applicable TC values


• Validate TC SGL legs against cross validation rules

SolutionSolution

• The account generator populates proprietary accounting for the user

• How can we streamline the TC selection (budgetary accounting) process for users who have little knowledge of SGL accounting?

SolutionSolution

• For example, in a Purchase Order obligation, if the fund is 00500 (General Fund), then the only possible TC is ‘Obligation-Reg’

• Why can’t we auto-populate the TC with “Obligation-Reg?”

• The “Obligation-Reg” TC drives the budgetary natural accounts– DR 461013– CR 480100

SolutionSolution

• Define agency wide rules for TC usage

• Rules are based on…– Transaction Type (i.e. Requisition, Obligation,

AP Invoice, AP Payment, AR Invoice, AR Receipt)

– Fund (i.e. 00500)– Object Class (expense type)

SolutionSolutionTC Rules – Transaction Type ‘O’ = Obligation

SolutionSolution

• Create a custom form and table to hold the TC rules

• The form is user maintainable as needs (rules) change

SolutionSolution

• TCs required on all forms

• Forms populate the TC once the requisite information is in place

SolutionSolution

• For example, once the AFF populates based on the account generator, the TC automatically populates

• The TC cannot be modified once a transaction is accounted for and interfaced with the GL

SolutionSolution

• Set up CVRs to restrict incorrect AFF combinations

• Validate (form enhancement) the TC legs against the cross validation rules

SolutionSolution

• Interfaces also use the table based rules to determine the correct TCs

• If the TC cannot be found due to a gap in the TC rule definition, an error message displays – sometimes occurs with new funds

SolutionSolution

• TCs autopopulate on the following forms– Purchase Order– Requisition– PO Receipt– AP invoice– AP Payments– AR Invoices– AR Receipts– Treasury Confirmation

Solution – Technical DetailsSolution – Technical Details

• The CUSTOM.pll is a form enhancement that does not require the customization of the underlying form. The CUSTOM.pll is called during several triggers from every Oracle form

• The usage of the CUSTOM.pll isolates these enhancements from future upgrades


• Creation of a PL/SQL function that accepts attributes from the form / interface (such as transaction type, fund, object class) and returns the TC value

• Function calls from the forms via CUSTOM.pll and interfaces


• Creation of a single custom form to allow the modification of TC rules

Solution - ExampleSolution - Example

PO Obligation Entry – Auto-populate the TC (General Fund)

Solution - ExampleSolution - ExampleTC Rules

– Transaction Type of ‘R’ = PO Receipt


TC Definition - Standard


TC Definition - Standard

Solution - ExampleSolution - ExamplePO Obligation Entry – Auto-populate the TC (Reimbursable Fund)

Solution - ExampleSolution - ExampleIn the PO, change the AFF to use an expired fund…

Solution ExampleSolution Example

and tab…

Solution - ExampleSolution - ExampleA PO Receipt against an expired obligation…


…populates with the Receipt-Expired TC


TC Rules


PO Receipt Entry – Reduce TC LOV for easier selection


AR Invoice Entry – CVR Validation on TCs

Solution BenefitsSolution Benefits

• Takes budgetary account (TC) selection out of user’s hands – Improved data accuracy

• Provides up-front validations that limit audit and reconciliation issues

• Increases financial statement reporting accuracy and timeliness

Solution BenefitsSolution Benefits

• Decreases number of errors per month edits per month by 80%

• Improves audit results

• Drives Agency – wide budgetary accounting consistency

QuestionsQuestions

Bryan EckleBryan EckleSummit2Sea Consulting, LLCSummit2Sea Consulting, [email protected]@sum2sea.comwww.sum2sea.comwww.sum2sea.com

Documents

Automating Governmental Budgetary Accounting in Oracle Federal Financials A Case Study