Revenue Shortfalls Commit to Expenditure Shortfalls

Scenario

A local authority is planning to build a kindergarten. It receives a capital investment grant of EUR 400,000 from the federal state if it provides EUR 600,000 of its own funds. In the budget plan the total amount of EUR 1,000,000 is displayed.

Objective

The local authority wants to ensure that the capital investment grant and the donation can only be spent after the money has been received, that is the money must have been posted on the respective revenue FM account assignment.

Prerequisites

For more information on creating budget memos, see the Implementation Guide (IMG) for Funds Management Government in the Create Budget Memo section.

For further information on this, see the IMG Funds Management Government in section Create Budget Subtypes and Enter Settings for Budget Subtypes .

Furthermore, the respective prerequisites for the procedure (calling procedure, distribution procedure 1 or 2) apply to the revenues increasing the budget that you use.

Solution

To ensure that the capital investment grant will only be spent after the money has been received, the revenue FM account assignment (commitment item: capital investment grant) on which the money is posted, is treated like a revenue increasing the budget. In master data maintenance, you assign the expenditure FM account assignment (commitment item: Kindergarten) to this revenue FM account assignment. Then define a revenue and expenditure budget memo for the budget memo type Revenue Shortfalls Commit to Expenditure Shortfalls (02).

Define the following interval in the rule maintenance:

If the minimum revenue is 0, revenue on this FM account assignment can be used immediately if it is required by the expenditure FM account assignment.

Upper limit: 400,000; like this you ensure that only revenues in the amount of the grant will increase the expenditure budget.

On the revenue FM account assignment original budget in the amount of EUR 1,000,000 is entered. The grant is displayed via a budget update, which means budget from expenditure shortfall (budget subtype) in the amount of EUR 400,000 is entered. The expenditure shortfall reduces the available budget, that means the grant contained in the original budget is subtracted, so that for the time being only your own contribution can be spent.

During the construction of the Kindergarten, the budget designated for it through different business transactions or payment requests, purchase orders or funds reservations is gradually consumed. When the business transaction is posted, the program checks whether there are still enough funds on the expenditure FM account assignment. If the current budget has been consumed, the program checks whether there is still budget available for the construction of the Kindergarten on the assigned revenue FM account assignment. If this is the case, this budget is then used by the expenditure FM account assignment.