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Budgeting & Appropriations

Wed, 2014-06-25 08:56 — 65

The Budgeting and Appropriations module is an essential part of the FreeBalance Government Resource Planning application, allowing users to:

  • Define multiple levels of budgetary controls.
  • Make changes to approved budgetary controls using transfer and update vouchers.
  • Record daily commitments and obligations.

Unlike private sector financial accounting, government commitment accounting is budget driven rather than profit driven. Commitment accounting requires numerous control mechanisms between the initial budget approval and the completion of fiscal transactions. The GRP supports all commitment controls. The commitment controls provided by FreeBalance in the Public Financials Management (PFM) category of the FreeBalance GRP include:

  • Budgetary control: The initial approved budgetary funds are mapped to the Chart of Accounts (COA) at a pre-determined COA hierarchy level for aggregate fiscal control.
  • Multiple levels of allotment controls: Supports approved appropriations, warrants or allocations, mapped to summary or detailed levels within the COA and to fiscal periods.
  • Commitment control: A soft commitment or intention to spend.
  • Obligation control: A hard commitment or contractual obligation.
  • Multi-funds and project controls: FreeBalance links projects and programs with fund sources, including linking budgets, projects or programs to specific revenue sources and donors.
  • Tolerances: Set tolerances for controls to ensure fiscal discipline and compliance to the budget law while enabling appropriate discretion.
  • Segregation of duties: Ensure compliance with government regulations through separation of duties and approval controls.
  • Public accounting and budgetary classifications: Control based on budget classifications executed via accounting procedures.
  • Budget execution: Control expenditures based on the established legal budget and government procedures.
  • Allotment and appropriation control: Integrate authority to spend and release funds to enable expenditures and payments.
  • Commitment accounting: Eliminate budget overspending by setting aside funds for in-progress expenditure plans (commitments, soft commitments or pre-encumbrances) and purchase activity (obligations, hard commitments or encumbrances).
  • Fund management: Control expenditure conditions based on source and type of funds to ensure fiscal discipline.
  • Budget transfers: Manage budget transfers, supplemental budgets and virements following government standards

Before being accepted for posting, all financial transactions (expenses, commitments, obligations, revenues) that are posted to the GRP application are checked for availability of funds against their associated budgets and allotments.

While the control levels are established within the Budgeting and Appropriations module, the posting of actuals is achieved through the entry of journal vouchers into the General Ledger module. All financial transactions, irrespective of which module it originates from (Expenditures, Revenues, Assets, etc) will hit the General Ledger automatically through a journal voucher.

Complemented by its comprehensive list of appropriation reports and inquiries, managers will thus be able to make crucial spending decisions with confidence, while preparing accurate forecasts and future-year budgets. The Appropriations module includes the following features:

  • Secure allotment levels, ensuring that spending limits are never exceeded.
  • Detailed budget creation capabilities, providing enhanced accountability and program/project cost control.
  • Powerful multi-year commitment accounting functionality, allowing usres to track commitments on a daily basis.
  • User-entered monthly forecasts, to support annual surplus/deficit projections and cash management.
  • Comprehensive and flexible reporting capabilities, for improved control and sound decision-making.
  • On-line inquiries, providing instantaneous snapshots of the status of current allotments, budgets and commitments.

 

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