Session ID:

Managing Utility Funding 10191

without the Overhead of
Grants Prepared by:
Bruce Maghan, Sr Practice Director
Wendy Lamar, Sr Managing Consultant
Solution Overview and Case Studies Project Partners
@BruceMaghan | @Project_Experts
@WendyLamar3 | @Oracle_Projects

April 25, 2018 4:15 PM

Breakers K
Remember to complete your evaluation for this session within the app!

1
Introduction to…
Project Partners has over 20 years’ experience as the global leader in optimizing business
processes and IT investments within project-driven organizations.
We are experts in driving business value as a single point solution provider for all requirements
across Oracle® Cloud (ERP, EPM, HCM, PPM), Oracle E-Business Suite, and Oracle
Primavera.
Solution Architects with expertise in delivering end-to-end, integrated Oracle solutions within all
project-driven industries, including Engineering & Construction, Oil & Gas, Professional Services,
Public Sector, Healthcare, Financial Services, Aerospace & Defense, High Tech Manufacturing.
We have developed 10+ software products to support, augment, and integrate Oracle
Applications.
Oracle Authorized Reseller of Primavera | Cloud Financials | Cloud PPM
Oracle Accelerate Solutions
Oracle Validated Integration

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Session Schedule
Opportunity to Project Flow with CRM and PPM April 22, 2018 12:30 PM Breakers K
Neeraj Garg, VP of ERP Solutions

Project Planning and Control with Oracle Cloud PPM April 23, 2018 1:15 PM South Seas C
Neeraj Garg, VP of ERP Solutions

Easily Submit and Monitor Scheduled Processes and Reports April 25, 2018 4:15PM South Seas G
for Oracle Cloud Applications
Neeraj Garg, VP of ERP Solutions

Managing Utility Funding without the Overhead of Grants April 25, 2018 4:15 PM Breakers K
Wendy Lamar, Sr Managing Consultant

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Agenda

Standard Solution

How Does Project Partners Improve the Process?

Case Studies

Questions

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Standard Solution

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 Standard Solution
Many organizations across the Utility, Water Management, Non-Profit, and
Higher Education industries use external funds to perform their major capital
initiatives
 Sources of external funds
• Public Bonds
• Grants
• Private Donations
Organizations that use external funds to support their capital initiatives are
often required to manage their projects against the fund balance to ensure
there is no overrun of costs
Transactions on these projects must have their accounting entries driven by
funding information

Many public service organizations use external sources of funds to perform capital
initiatives. Such sources could be bonds, grants, or private donations. This requires several
layers of tracking the fund usages to the project and transactional level to meet statutory
reporting requirements.

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 Standard Solution
Typically Oracle Grants is implemented to address some or all of the previously
mentioned requirements
Grants introduces additional overhead in that it requires dividing all transactions
based upon each funding “Award” when the function is not actually required thus
leading to significantly increased transaction volume
Grants introduces encumbrance accounting leading to additional overhead,
particularly in the Procure to Pay process, but does not benefit the utility when not
required for financial reporting

Organizations will implement grants in order to use awards for tracking the sources of
funds. However, these organizations aren’t necessarily required to use some of the other
required functionality that Grants requires, such as encumbrance accounting, and the
tracking of awards can prove cumbersome, and often still leads to required customizations
to account the transactions properly.

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Process Improvement

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 How Does Project Partners Improve the
Process?
Common requirements were reviewed across our Utility and Water
Management customer base
 Many customers fund their projects with municipal bond proceeds
• Bond funding requires statutory reporting based upon which projects are funded by a
particular fund
• Clients also require the capability to track bond fund consumption in order to be proactive
when funds have been consumed
 Customers also fund projects using internal funds, or a combination of bond
proceeds and internal funds
• There is no system based tracking methodology for determining if a project was fully or
partially funded with bond proceeds

We reviewed the requirements across our Utility and Water Management customer base
and many of the requirements are common.

• Bond funding requires statutory reporting based upon which projects are funded by a
particular fund.
• Clients also require the capability to track bond fund consumption in order to be
proactive when funds have been consumed.
• There is no system based tracking methodology for determining if a project was fully or
partially funded with bond proceeds.

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 How Does Project Partners Improve the
Process?
 Projects will commence execution prior to bond funds being available
• Internally funded until external funds are available
• Internal funds are reimbursed upon external funds availability
• There is no mechanism in place to track the funding and reimbursement of internal funds
• Accounting is to be based upon the funding arrangement at the time the transaction
occurred
 Projects may be conducted to the benefit of one or more Improvement Districts
• Improvement Districts may be funded by a single Fund or may Funds
• Costs must be allocated to the Improvement District based upon the Improvement
District’s Ownership for a particular project
Project Partners has improved the process by developing solutions that
effectively addresses the lack of flexibility, and transaction volume issues
faced by customers that would typically be required to implement Oracle
Grants

The process has been improved by providing more streamlined mechanisms for tracking
the overall fund source, as well as tracking usage of the specific funds at the project and
transaction level. Our solutions to date have accommodated several different
requirements, such as tracking projects that were internally funded when the project
began, but once funding was awarded a reimbursement process is accommodated.
Accounting is based on the transactions as they occur, and any adjusting transactions for
reimbursement are accounted accordingly.

When an overall district is divided into improvement districts, an additional layer is

required for accounting and reporting. Our solutions are available to accommodate this
level of tracking as well.

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Case Studies

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Case Studies

Case Study 1
 Oracle EBS 12.1.3
 Project Costing
 No Improvement Districts

Case Study 2
 Oracle EBS 12.2.5
 Project Costing
 Project Planning and Control
 Improvement Districts in Play

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Case Study 1

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 Case Study 1
Key Concepts
 Custom Forms are created for
• Creating Funding Arrangements
• Assigning Bond Proceeds Funding
– A project can be funded by multiple Bond Funds over the life of the project but not
simultaneously
• Inquiring on Bond Proceed Activity
 Standard AutoAccounting/Sub-Ledger Accounting is used to account transactions
based upon active Bond Fund Arrangement
• Procure to Pay transactions go through a standard subledger accounting process to
apply the correct GL Work Order and Fund segments in the accounting event
 Custom Concurrent Programs to deliver the following
• Verify if all Bond Proceeds have been consumed. If they have, the current Bond Proceed
Funding Line is end dated and the project is to be considered Internally Funded until
additional Bond Proceeds are available.
• Provide reporting to Bond Fund Management of which Bond Funds have been completely
consumed and require action

In case study one, this public utility needed a solution to track their project costs to the
funding source, at the GL level. In the GL, there are two chart of account segments, GL
Work Order and the Fund.
To accomplish this requirement, we created multiple custom forms.

The custom Bond Proceeds Setup form is used to define the various source of funds used,
such as bonds, internal funding, and other sources.

Next, once projects are setup, the project is funded by navigating to the fund in the Bond
Proceeds Setup form, and navigating to a sub form to map the fund to the GL Work Order
and the Project Number. As costs are incurred, they are able to use these fields to
determine the account combination for the transaction.

The last custom form is the Bond Proceeds Inquiry form, which includes information
related to the particular fund queried, such as total amount, incurred and remaining
amounts, and remaining funds available.

For this case, standard auto accounting and subledger accounting configurations were used
to handle all accounting requirements.

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A custom concurrent program was also created to identify any open fund assignments to a
project which has been fully consumed. In this case the custom program will force the
funding for the project to the internal funding source and drive accounting accordingly. It
will also flag those particular funds for a resource to take action and re-fund projects as
required.

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 Case Study 1
• Bond Proceeds Setup

The custom form pictured in this slide is used to setup the actual source of funds, which
can be used to fund expenditures over many projects.

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 Case Study 1
• Bond Proceeds Funding

The custom form pictured in this slide is accessed from the Bond Proceeds Setup form in
the previous slide, and is used to setup the funding line. These funding lines are tying the
source of funds to the actual project whose expenditures are covered. In addition, the GL
Work order, which is the segment in the chart of accounts, is defined here for the project.
This information later drives the resulting journal entry of the projects expenditures.

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 Case Study 1
• Bond Proceeds Inquiry

The custom form pictured in this slide is used to inquire on the status of an existing fund,
including the various projects funded, amounts allocated, funds remaining, and the
effective dates of the funding assigned to the project.

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 Case Study 1 – Process Flow

Follow the process flow pictured for a high level overview of the solution for Case Study
one.

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Case Study 2

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 Case Study 2 – Key Concepts
Project Fund functionality created
 Allows for tracking each individual fund
 A project fund can spread across Improvement Districts (OR) be limited to assignment to one
Improvement District
 Possible to assign multiple funds to one General Ledger fund
• Allows for further reporting classification at the project level
– i.e. GL tracks a bond, but there is a need to track each bond disbursement separately
Project level assignment of each improvement district that owns the project
 Includes percentage of ownership
 Any number of IDs allowed but total 100% ownership
 Functionality to allow manual entry of the Improvement District split ownership (OR) a list of standard ID
split ownership combinations (repetitive use)
Assignment of Source of Funds to Each ID assigned to the Project
 Includes percentage of funding by ID
 Any number of funds per ID allowed but total 100% funding
Custom Concurrent Programs to do the following:
 Validate there are no projects with incomplete Improvement District and Fund Pattern assignments
 Create Cash Reclass entries to support properly accounting of costs to Improvement Districts and Funds
based upon Ownership
 Provide reconciliation capability of Cash Reclass activity

In case study two, this public utility had similar requirements with tracking funding sources
in the general ledger, however they had an added layer in tracking by improvement district.
As this municipality is a newer community, there are still areas within the district that are
either not yet developed or undergoing development. This leads the district coverage area
to be divided into smaller improvement districts to allow for more fairly priced rates by
improvement district.
Both the improvement district (ID) and fund source (Fund) are segments in the GL chart of
accounts.
Projects are primarily capital improvement, and may or may not be capitalized.

Every project is owned by one or more improvement districts, and each is assigned a
percentage of ownership of the project, totaling 100% ownership. Each district that owns
the project is funded to cover 100% of the incurred costs by that district.

This client previously used Oracle Grants to track the funding. However for tracking by ID,
they had a heavily customized solution that would split every single transaction charged to
a project by the different IDs that owned the project. This could result in one project
expenditure being split into many lines to recognize the cost by ID. This includes procure to
pay transactions. This was a very cumbersome process for both transaction volume and
reconciliation requirements.

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To improve this process, we migrated the client to a new operating unit while upgrading to
Release 12.2.5. In the new OU, Project Planning and Control and Project Costing were
implemented, with no integration to Oracle Grants. We replaced both the Award tracking
and the ID split solution on incurred transactions with a custom solution.

We created several custom forms using OA Framework.

The first custom form was for a Project Fund. This is simply defining the different fund
sources available to fund specific projects. This project fund is tied to the GL segment value
for the specific Fund to which it belongs. (There could be multiple project funds that are
assigned to one GL fund.) In this same form, you can also define the fund as allowed to fund
multiple IDs, or only fund one ID.

The second custom form was at the project level, available to the user from the project
Home page in Project Planning & Control. This is used to assign the Improvement District
level of ownership to the individual project. For each ID assigned ownership of the project,
separate funding is assigned.
Both have assigned effective dates (by accounting period).

As project costs are incurred, the expenditures are accounted for as normal costing
transactions, and would charge an appropriate construction in progress or expense account.
For both the ID and Fund segments of the journal entry, they charged a suspense value.
In addition to this entry, the client required an additional entry to move the cash related to
the transaction to the correct IDs and Funds.

To accomplish the requirement for an additional journal entry, a custom subledger account
process was created to generate custom accounting events to drive the additional journal
entry. This custom process, or “Reclass”, evaluated any project expenditures that hadn’t
been previously included in a prior reclass. The accounting event is then created to charge
the transaction amount to the cash account, and also move the ID and Funds from the
suspense values to the valid ID and Fund assigned to the project, using the effective ID and
Fund based on the expenditure date.

Included in this process, prior to running the custom create accounting events process, the
user would run a process to evaluate all projects that will result in an accounting event and
validate that there are active ID and Fund assignments to the project.

Once the custom accounting events are generated, the standard Oracle Create Accounting
process runs and parameters are used to transfer the resulting entry to General Ledger.

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 Case Study 2 – Configure Project Fund Source
Funding Source Configuration (Global)
 Assign Fund number
 Assign Project Fund number
 Determine if the Project Fund can be applied to a single ID or to any ID
 Assign effective dates
 Indicate the total amount available in the fund
 Project Funds available to assign during ID and Fund assignment at the project
level

The custom form pictured in this slide is used to setup the actual source of funds, referred
to as project funds, which can be used to fund expenditures over many projects, for specific
IDs (OR) across all IDs.

This is simply defining the different fund sources available to fund specific projects. This
project fund is tied to the GL segment value for Fund to which it belongs.

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 Case Study 2 – Assign ID and Fund to Project
Project level information defaults to page accessed from the Project Home
Enter split effective start date. End date is optional.
Determine the type of split assignment
 Custom = Manually entered ID splits
 Standard = Choose from a list of commonly used ID splits that automatically apply
to the project
Populate the ID Splits and Save
ID Splits must total 100% for the project
Funds are entered at ID level
 Assign funding to each ID assigned to the project
 Per each ID, 100% funding must be assigned

Every project is owned by one or more improvement districts, and each is assigned a
percentage of ownership of the project, totaling 100% ownership. Each district that owns
the project is funded to cover 100% of the incurred costs by that district.

The second custom form is at the project level, available to the user from the project Home
page in Project Planning & Control. This is used to assign the Improvement District level of
ownership to the individual project. For each ID assigned ownership of the project,
separate funding is assigned.
Both have assigned effective dates (by accounting period).

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 Case Study 2 – Assign ID and Fund to Project

The custom form pictured in this slide is used to assign the Improvement District split
ownership, and the funding for each improvement district, to the project.

The second custom form is at the project level, available to the user from the project Home
page in Project Planning & Control. This is used to assign the Improvement District level of
ownership to the individual project. For each ID assigned ownership of the project,
separate funding is assigned.
Both have assigned effective dates (by accounting period).

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 Case Study 2 – Assign Fund to ID
(Project Level)

Additional view of the same form in the previous slide showing the fund pattern
assignment to the ID.

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 Case Study 2 – Process Costs and
Reclassification of Cost
Project costs are collected normally, and accounted as typical project cos
 GL Segment for ID will charge a suspense value
 GL Segment for Fund will charge a suspense value

Periodically, the costs incurred must be reclassed to move the ID and Funds to
the correct GL segment value
 The original cost journal entry is not impacted by account
 Cash account is DR/CR, and the correct ID and Fund segments are charged in the
reclassification accounting event

Custom subledger accounting process generates accounting events to create

additional journal entries to reclassify the Cash related to incurred costs,
moving to the correct improvement district and fund source

Additional accounting event; does not reverse the cost incurred

As project costs are incurred, the expenditures are accounted for as normal costing
transactions, and would charge an appropriate construction in progress or expense
account. For both the ID and Fund segments of the journal entry, they charged a suspense
value.
In addition to this entry, the client required an additional entry to move the cash related to
the transaction to the correct IDs and Funds.

To accomplish the requirement for an additional journal entry, a custom subledger account
process was created to generate custom accounting events to drive the additional journal
entry. This custom process, or “Reclass”, evaluated any project expenditures that hadn’t
been previously included in a prior reclass. The accounting event is then created to charge
the transaction amount to the cash account, and also move the ID and Funds from the
suspense values to the valid ID and Fund assigned to the project, using the effective ID and
Fund based on the expenditure date.

Included in this process, prior to running the custom create accounting events process, the
user would run a process to evaluate all projects that will result in an accounting event and
validate that there are active ID and Fund assignments to the project.

Once the custom accounting events are generated, the standard Oracle Create Accounting

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process runs and parameters are used to transfer the resulting entry to General Ledger.

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 Case Study 2 – Process Flow

Follow the process flow pictured for a high level overview of the solution for Case Study
two.

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 Presenter(s)
wlamar@project.com
bmaghan@project.com

Session ID:
10191

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27
 Q&A
Visit Booth - #1143 B
Contact Us
Rebecca Portela
Vice President, Marketing | Business Development
rportela@projectp.com www.ProjectP.com

Session ID:
10191

Remember to complete your evaluation for this session within the app!

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