SAP Funds Management and US Federal Accounting in Depth

1. Why a commercial ledger is not enough

A commercial general ledger answers what the entity owns, owes, earned, and spent. Federal accounting adds a second question for every dollar: what legal authority allowed it, and what stage of use has that authority reached. SAP answers the second question in Funds Management and turns the answer into USSGL budgetary accounts through the US Federal extension.

2. Funds Management master data

• A commitment item has a financial transaction and a commitment item category. Financial transaction 30 with category 3 is an expenditure. Category 2 is revenue. Financial transaction 90 marks cash and bank accounts, and 60 and 80 mark receivables, payables, and clearing accounts that do not consume budget.
• A fund has a validity period and, in the federal extension, expiration and cancellation dates. Posting to an expired fund is limited to adjustments. Posting to a cancelled fund is blocked.
• Funds centers form one hierarchy per variant. Budget is distributed down the hierarchy and availability can be checked at any level.
• Cost objects can carry a fixed FM assignment in FMZUOB, so that a cost center or WBS element always posts to the same funds center and fund.

Derivation

Users rarely key every FM field. The derivation strategy in FMDERIVE fills them. A strategy is an ordered list of steps: derivation rules, which are lookup tables, table lookups, assignments, function calls, and enhancements. FMDERIVATIONANALYSIS replays a posting and shows which step set each field. When an obligation lands on the wrong fund or commitment item, the derivation trace is the first place to look.

3. How a posting updates Funds Management

• The update profile on the FM area decides two things for each value type: whether it consumes payment budget, commitment budget, or both, and which date sets the budget year. A profile can use the posting date, the delivery date, or the due date.
• The commitment chain keeps consumption from double counting. A purchase order created from a requisition reduces the requisition in FMIOI and adds itself. An invoice reduces the order. Each reduction is its own line with amount type 0200.
• When an invoice is paid, payment conversion changes the invoice line from value type 54 to 57. With online payment update it happens at payment posting. Otherwise the program behind FMF0 does it in a batch.
• Statistical lines, flagged in STATS, appear in reports and do not consume budget.

4. Budget Control System

• Availability control reads FMAVCT, not the line items. If the ledger is out of step after a configuration change or a failed update, FMAVCREINIT rebuilds it.
• FMAVCR01 shows consumable budget, consumed amount, and available amount by control object for a year. It is the system view of status of funds.
• The GFEBS role map shows budget distribution in FMBB together with custom distribution and threshold transactions, and a year-end certification step.
• DoD IG reported that GFEBS became the Army General Fund system of record for fund distribution in fiscal year 2013, and that 22 appropriations totaling $176.5 billion were not recorded in it on time that year.

5. Earmarked funds

Earmarked funds documents commit or obligate budget without a purchasing document. They are the SAP record behind miscellaneous obligations, travel orders, training, and transportation charges.

• Header KBLK, items KBLP, consumption history KBLE. Each item carries its own fund, funds center, commitment item, G/L account, and cost object.
• An invoice entered in FB60 references the earmarked funds number and item. The reference is stored on the invoice line in BSEG-KBLNR and KBLPOS, and the consumption appears in KBLE.
• The completion indicator on the item closes the remaining amount. Setting it releases unliquidated budget, which is a deobligation.
• Because there is no contract or receiving report behind a funds commitment, auditors test these documents for a valid obligating event and for timely liquidation. They are the SAP equivalent of the miscellaneous obligation document.

6. The budgetary ledger

The budgetary ledger is the part of the US Federal extension that writes USSGL 4000-series lines. It listens to FM updates and derives a debit and credit account pair from the event, the value type, the budget type, and fund attributes.

7. Federal reporting ledgers and Treasury attributes

• The federal extension keeps special ledgers that hold balances with reporting attributes. A public table listing ties ledger 95 to totals table FMUSFGT, ledger 96 to FMUSFGFACTS1T, and ledger 97 to FMUSFGFACTS2T. The attribute keys are in FMFGKEY, FMFGKEY96, and FMFGKEY97.
• The names refer to FACTS I and FACTS II, the Treasury systems that GTAS replaced. The attribute concept is the same: each balance carries values such as federal or non-federal, trading partner, apportionment category, and authority type.
• DoD IG described the same design in GFEBS: the standard general ledger did not meet federal reporting needs, Special Ledger 95 was built for Treasury reporting, and a custom Z1 ledger was added in April 2010 to carry the DoD reporting attributes.
• Attributes are derived when the document posts. If a derivation is missing or wrong, the balance carries a blank or invalid attribute, which fails a GTAS validation or a DDRS edit.
• DoD IG tested 20 required attributes in GFEBS. Eleven were inconsistent in Special Ledger 95 and eight in the Z1 ledger, including trading partner, custodial indicator, and prior-year adjustment code.

8. Payables functions required by federal law

9. Period-end and year-end

1. Clear interface queues. Reprocess or resolve IDocs in error and batch input sessions.
2. Complete goods receipts and service entry sheets for the period. Post accruals for received and unbilled items.
3. Run the payment conversion so paid invoices show as outlays.
4. Run depreciation, settlement of orders and projects, and allocations.
5. Reconcile Funds Management to the general ledger. The GFEBS role map lists two federal reconciliation reports and an abnormal balance report under reconciliation postings.
6. Reconcile Fund Balance with Treasury by Treasury account symbol.
7. Close posting periods in FI (OB52), materials (MMPV), CO (OKP1), and FM.
8. Produce the trial balance extract for DDRS. The GFEBS role map lists custom SFIS trial balance and DDRS trial balance transactions.

10. Reconciling Funds Management to the general ledger