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Budget management describes those tasks in public services administration that affect a budget once it has been approved for execution until the authority for expenditure expires. The enterprise services in the Public Sector Budget Management ES bundle allow customers and partners to include the core functions of budget management into their UIs and applications, making them available to the world outside ERP.

The Public Sector Budget Management ES bundle allows users to obtain information about how much has been budgeted in particular areas and how much of that budget has been consumed (how much is left). Additionally, budget amounts can be increased or reduced by posting or canceling budget documents.

To put this bundle into a larger perspective, it might help readers to understand the following. For all four market segments of public services (core public sector administration, defense, healthcare, and higher education and research), accounting consists of three major aspects:

  • financial accounting
  • budgetary accounting
  • management accounting
    While financial and management accounting are used in a similar way to the private sector, in public services, budgetary accounting is itself a driver of processes or interacts with operational processes, providing the financial aspect of budget control to them.

Public Sector Budget Management
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Due to the fiduciary nature of public finances, all business processes that cause in- or outflow of monies are checked against and reflected in budgetary accounting. All users and applications involved in process steps need the right amount of information about the budget situation. All users with budget responsibility need to be able to update budget values according to rules and needs.
The services that together make up the Public Sector Budget Management ES bundle cover the following aspects of budget execution:

  • Information on budget amounts. As a starting point for budget maintenance processes, information on the existing budget values and how they have been created using budget documents is made available to the outside world. The services provided can return detailed information on the budget documents that comprise a given budget amount or simply a total
  • Information on budget consumption. Next to budget amounts, budget consumption (how much money has already been spent) is key to allowing users to assess the current budget situation
  • Maintenance of budget amounts. Using budget documents, changes such supplements or transfers of budget can be posted.

The Public Sector Budget Management ES bundle leverages enterprise SOA by providing reusable enterprise services and business objects that developers can use to create composite applications that communicate with SAP ERP 6.0, providing relevant budget information to a variety of roles in the organization.

Expanded Functionality

With SAP Ehp4 this bundle introduces a new BO (AVC Register).
Active availability control (AVC) for budgets is a core functional offering in the Public Services accounting solution (Public Sector, Higher Education, Defense, Healthcare). AVC is linked to all expenditure process and interacts with process control (i.e. it can stop operational process steps). While this is reassuring to a customer's management and fulfills the legal requirements (to control expenditure process limitations set up your available monetary budgets), it leaves individual users in uncertainty until the last moment - when they really want to save/post the transaction that defines the expenditure in its structure (account assignments) and amount. This is a technical consequence as it is at this time that AVC has to execute the check and record expenditures. With the new service operation, it is possible to create information requests about the AVC status which can be included in the operational process at any desired point. A user can then see the budget that is available now. He might receive this information for multiple budgets, thus allowing him to choose where to post the expenditure to.
It can thus be compared to an airline seat reservation system. Before, a user would type in flight and seat requirements, and the system would respond by either confirming the request (positive), or by rejecting it saying these seats are already occupied. Now, the user can view the reservation status of a flight for a given date prior to making his choice, thereby enabling him to choose from available seats.

Audience

This bundle will be of great benefit to budget administrators in public service entities such as defense organizations, universities, public hospitals, and federal, state and local governments. The persons most likely to use the services included in this bundle would be budget managers or budget clerks. Other personnel who are assigned to budget management in the various departments of these public service entities can also benefit, including those involved in procurement and booking travel. In short, anyone who must refer to budget amounts is a potential user for this ES bundle, and those who design composite applications using the services in this bundle can ensure that users have access only to the information that is relevant to their role.

For details on Service Operations, Business Objects and Process Components, please check the ES Workplace.


How To Use This ES Bundle

Without the services offered in this bundle, users need to log on to the ERP system and retrieve their information via reports. They are responsible for entering the right selection criteria in reports. When they need to post budget updates, they must perform a power user transaction, which requires access to and knowledge of the ERP system. External systems can interface to ERP to post budget documents via BAPIs, but have no clearly defined access to existing budget and budget consumption data.

Also with Ehp4, the ECC functionality uses the message mechanism for information exchange. For upfront information on available budget, this mechanism and the logic involved is not suitable. A new UI making use of this service operation can thus be built where needed to provide the functionality. Changing all existing UIs in ECC is not a feasible option.

This section will explore a series of use cases to show how the enterprise services of this bundle can be used to achieve various outcomes in budget management processes. In these use cases, we will use the example of the budget manager of the geography department at a public university. This budget manager will be new to the department and will have no previous knowledge of the geography department's budgets and budgetary needs. Hence, she will have to begin by examining the current budgets of the department.

Use Case 1: Obtain Information About Budget Amounts

A new budget manager has been hired at the geography department of a public university. This budget manager is new to the department and has no previous knowledge of the geography department's budgets and budgetary needs. She begins by examining the current budget of the department. The budget manager has learned that certain professors will be doing a fair amount of traveling to conferences throughout the year. So, the first thing she does is to determine what has been budgeted for the geography department's travel needs. Using the interface that her university's IT department has created, she opens the budget screen and selects an option to view the budget for travel, which invokes the Find Budget Register Item by Elements enterprise service, which uses the Budget Register business object.

The budget manager can then review the amount that has been budgeted for travel. Depending on the way her IT department designed the composite application, it might display detail for the budget address (including the budget documents that are responsible for the amount in the budget) or simply a total.

For example, the budget manager may learn that the department has received several grants for the study of a certain region in the United States that is currently undergoing a geographical reassessment, due to flooding and the need to relocate certain towns in the flooded areas. In each grant, there may be a certain amount allotted for travel. Depending on the design of the composite, she may be able to see details of how much money from each grant makes up the travel budget for the geography department.

Use Case 2: Changing Budget Amounts

Now that the budget manager has determined what has been budgeted for travel and what has been consumed, she realizes that the existing budget amounts need to be reallocated. The software budget for the department called for ordering an upgrade to the GIS system used by graduate students, but this upgrade has been delayed by the software vendor until the next budget year. She creates a budget document to transfer budget, reducing the 'software' budget and allocating it to 'travel', which came up short in her earlier analysis. Behind the scenes, the application invokes the Create Budget Document_V1 enterprise service, which uses the Budget Document business object. Whenever any change is made to the budget, it is recorded using a separate budget document so that a complete audit trail is created of all changes to the budget. Each budget document updates the budget register item in the backend, which is a total of all the budget documents for a particular budget address.

Future Directions

A future direction for this bundle could be an extension of the services to cover other planning scenarios in Controlling (CO), Profit Center Accounting, or BI used by some customers to reflect both their budget management as well as budget formulation needs. Another future direction involves providing a service that allows a manager to find information about amount of funds available in the budget.

System Requirements

Related ES Bundles