Expenditure Certification 

Purpose

The Expenditure Certification (PSM-EC) solution has been developed to enable accurate tracking of  incurred expenditures made out of public funding obtained by a government agency or local public sector organization. The data on these expenditures is subsequently collected, in order to create a report to external sponsors such as the European Union (EU).

The graphic below provides an overview of what PSM-EC does.

Expenditure Certification is launched from SAPEnterprise Portal. While it is possible to run the individual transactions in the SAP General User Interface (SAPGUI), you need to have the Portal up and running to use the full range of functions and links.

What is Certification?

Certification involves justifying an incurred expenditure by means of a statement confirming that this expenditure complies with the terms and conditions of the financial assistance given by a sponsor.  The budget the sponsor provides is linked to financing sources. These are linked to the expenditure documents by means of operations. Operations represent the sponsored project in PSM-EC.

To implement PSM-EC, you must define the financing source types your public organization is using for this purpose. For each financing source type, you can specify the contribution rate, expressed as a percentage, to be used, the certification procedure and attributes used to define the financing source, and the corresponding validity periods.

Different regions of a country obtain financial aid from either the central government, the EU, or other external organizations. The expenditures incurred using this financial aid, being part of the regional budget, must be certified to these external bodies. The certification itself can thus be regarded as a type of confirmation that the expenditures incurred adhere to the terms and conditions of the respective sponsor’s funding policy.

While PSM-EC has much terminology in common with Grantee Management (GM-GTE), it differs from it in that no budget is consumed by PSM-EC functions.

Implementation Considerations

You maintain the Customizing activities in the Implementation Guide (IMG) under Public Sector Management  ® Expenditure Certification. In particular, you specify the accounting objects (such as work breakdown structure (WBS) or funded program) to be used during certification, the procedures involved (individual phases and document types/categories), the financing source data (type and time frame), as well as the areas and levels of intervention involved.

See Customizing for Certification for more information.

Integration

Expenditure Certification is fully integrated with SAPPublic Sector Management and SAPFinancials. The corresponding SAP component hierarchy assignment is called PSM-EC.

Features

These funds to which certification relates may or may not be part of the regular budget of a public organization. The original source, however, is always external. This means that this source represents funds from another public organization, such as the central government or the EU. These funding sources are maintained in the system in the form of financing sources.

The budget of the financing sources is technically independent of the FM budget.

PSM-EC complies with accounting standards.

The certification itself represents a kind of reporting on existing documents in the system. This means that:

●      The documents have been posted, and use an accounting object (such as a WBS or funded program) which remains unchanged.

●      The operation used in expenditure certification is derived.

●      The certification does not involve a transfer posting.

One document can be certified to more than one funding body. Furthermore, you can use the available Business Add-Ins (BAdIs) to implement and activate your own logic for the certification run.

Now read the documentation on the Business Process for Certification.