Combination of Revenue Shortfalls and Add. Revenues

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. Furthermore a group of parents wishes to make a contribution of EUR 30,000. In the budget plan the total amount of EUR 1,030,000 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. Furthermore, you can define that the donation can be completely consumed, which means that if necessary more or less than EUR 30,000 can be consumed.

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 and the donation will only be spent after the money has been received, the revenue FM account assignments on which the cash receipt is posted (commitment items: capital investment grant from the federal state and donations) are treated like a revenue increasing the budget. In master data maintenance you assign the expenditure commitment item "Kindergarten" to the revenue commitment item "Capital Investment Grant". Then define a revenue and expenditure budget memo for the budget memo type Revenue Shortfalls Commit to Expenditure Shortfalls (02). You also assign the revenue commitment item "Donations" to the expenditure commitment item "Kindergarten". Then define a revenue and expenditure budget memo for the budget memo type Additional Revenues Justify Additional Expenditures and Revenue Shortfalls Commit to Expenditure Shortfalls (03).

Define the following intervals in the rule maintenance:

Interval for Additional Revenues

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.

If the upper limit is EUR 400,000, only revenues in the amount of the grant can be used. Whereas an open upper limit allows you use the whole amount.

On the revenue FM account assignment original budget in the amount of EUR 1,000,000 is entered. The grant and the donation are displayed via a budget update, which means budget from expenditure shortfall (budget subtype) in the amount of EUR 400,000 (commitment item: capital investment grant) and EUR 30,000 (commitment item: donations) is entered. The expenditure shortfall reduces the available budget, that means grants/donations contained in the original budget are 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 available 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 assignments (commitment items: capital investment grant and donations). If this is the case, this budget is then used by the expenditure FM account assignment.