1. Global Business Services © 2006 IBM Corporation ENCOMPASS: Project Module Work Group 2/14/07 Meeting

2. Global Business Services © 2006 IBM Corporation Introductions and Ground Rules

3. © 2006 IBM Corporation 3 Table of Contents  Introduction to the Project Module Approach –Two Major Changes from the INFORM Project Module Approach –Basic Project Management and Reporting Principles –Goals of the Project Module WorkGroup  Overview of the Proposed Project Module Approach –Defining a Project –Defining a Fund –Defining Funding Source and Funding Source Allocation –Defining Funds Distribution Process  Project Module Chartfield Descriptions –Defining Activity –Defining Source Type –Defining Category –Defining SubCategory –Defining Analysis Type  Next Steps

4. Global Business Services © 2006 IBM Corporation Introduction to the Project Module Approach

5. © 2006 IBM Corporation 5 Two Major Changes from the INFORM Project Module Approach  Projects: –Separate Projects will NOT be required for each funding source (Federal, State or Local) and grant year. –The Project ID will NOT require a funding source designation (“F”, “S” and “L”) or a year designation (“06”, “07” or “08”)  Funds: –There is NOT a need to record individual revenue and expense transactions for a project to separate State and Federal Funds. –The Federal Fund will act as a Joint Fund for recording revenue and expense transactions for Projects, including revenue and expense transactions that involve State matching funds.

6. © 2006 IBM Corporation 6 Basic Project Management and Reporting Principles  One Standard Project Module Approach for the Entire State  All Chartfields will be used for consistent purposes by the Entire State.  Project Reporting in Encompass will support the: –Generation of Schedules to Support State Financial and CAFR Reporting Requirements; –Accumulation of Capital Asset and Infrastructure Costs to Support State Financial and CAFR Reporting Requirements –Generation of the Schedule of expenses and Federal Awards and Schedules to Support OMB A-133 Reporting Requirements; –Generation of Federal Financial Reporting Schedules and Supporting Documentation; and –Generation of Federal Cash Drawdown Calculations and Supporting Documentation  Commitment Control will be Required to be Assigned at the Fund, Project and Funding Source Levels.

7. © 2006 IBM Corporation 7 Goals of the Project Reporting Work Group  Finalize the Configuration of the Project Module Approach in Compliance with the Basic Project Management and Reporting Principles.  Provide Feedback on the Proposed Project Module Approach.  Discuss potential Issues to the Proposed Approach based upon Project Management and Reporting Requirements for your Agency.  As a Group, identify Solutions to these potential Issues.

8. Global Business Services © 2006 IBM Corporation Overview of the Proposed Project Module Approach

9. Global Business Services © 2006 IBM Corporation Defining A Project

10. © 2006 IBM Corporation 10 Defining A Project  A Project is an accumulation of costs for a definite period of time.  The Project provides a significant portion of the transaction classification capability necessary to track expenses, revenues, asset capitalization and other financial activity in accordance with: –Federal grant and federal appropriation requirements including those related to OMB-A133, cash drawdown and periodic federal financial reporting; –State statute and State appropriation requirements, including those related to State Construction Projects; –State Financial Reporting Requirements, including those related to the preparation of the CAFR and the appropriate accumulation of costs for the construction of capital assets and infrastructure; –As required by other contractual agreements.  Every Project will have a Budget assigned at the Project Level for Commitment Control purposes.

11. © 2006 IBM Corporation 11 Defining A Project (Continued)  A Project will be REQUIRED in each of the following instances:  All expenses of federal funds must be reported using Projects, including: –Federal Grants and Appropriations received; –Federal Grants and Appropriations passed through to subrecipients within State government; and –Federal Grants and Appropriations passed through to subrecipients outside of State government.  Any expense that results in the construction of a State capital asset must be reported using Projects, including –State construction projects; –Construction of capital assets by state agencies; and –Construction of infrastructure assets by state agencies.

12. © 2006 IBM Corporation 12 Defining A Project (Continued)  An agency could request to report additional functions as Projects.  All requests for new Projects would be evaluated centrally to ensure the following: –The functions are not better suited to be captured in another chartfield –The level of detail being reported is consistent with the State’s approach.

13. © 2006 IBM Corporation 13 Defining A Project (Continued)  Project Chartfield Value = 15 Alphanumeric Characters  First 3 characters = Business Unit  Next 12 characters = Unique Project ID (Centrally Defined)  State Subrecipients will use same last 12 characters of the Project ID Last 3 digits of Business Unit Centrally defined with agency input

14. © 2006 IBM Corporation 14 Defining A Project (Continued)  Example of Project Chartfield Values:

15. © 2006 IBM Corporation 15 Defining A Project (Continued)  Project Definition – General Information Page (Sample Screenshot)

16. Global Business Services © 2006 IBM Corporation Defining A Fund

17. © 2006 IBM Corporation 17  Fund is the primary means within a Business Unit for tracking and relating specific sources and uses of revenues or budget authority. –Fund chartfield values = 5 numeric characters. –Replaces the 4 digit Fund and 6 digit Center combination. –Fund will be a required Chartfield for ALL Transactions  Some current Fund Center combinations will not be needed after conversion to ENCOMPASS : –Prior year centers replaced by Budget Reference; –Construction centers replaced by Projects; and –Geographic locations replaced by Class. Defining A Fund

18. © 2006 IBM Corporation 18 Defining A Fund (Continued)  Federal Funds will be defined where each Functional State Agency will have one Federal Fund for each Federal Granting Agency (Example: Each functional business unit that receives funds from DHHS would have one DHHS fund). –Exception: Major Funds in the CAFR (Major Moves & Medicaid) will be reported in separate funds. –Exception: Federal Funds of multiple Fund Types for CAFR reporting (Special Revenue, Capital Projects, etc.) will be reported in separate funds.  State Funds will continue to be determined at the level of State Appropriations or as outlined in State statute.

19. © 2006 IBM Corporation 19 Defining A Fund (Continued)  Appropriations and Allotments will be established for ALL State and Federal Funds.  The Appropriation and Allotments for the Federal Fund will be developed based upon grant award letters, prior years’ history, and financial projections.  The Appropriation and Allotments for the State and Local matching components (where applicable) will be Appropriated and Allotted in one or more State Fund(s) based upon the relevant State Appropriations.  The Budget Authority in the State Fund(s) will be transferred to the Federal Fund as the Budget Authority is Allotted.

20. © 2006 IBM Corporation 20 Defining A Fund (Continued) Sample Funds  Example of Mapping of Existing Fund / Centers to New Fund Values:

21. Global Business Services © 2006 IBM Corporation Defining Fund Source in Commitment Control

22. © 2006 IBM Corporation 22 Defining Funding Source in Commitment Control: Functions of the Funding Source  Funding Source = (Six character numeric value field that will be sequentially autonumbered with a leading zero.)  Funding Source will be used to enforce commitment control on a distinct funding stream: –All or a portion of the funding source would be applied to various projects. –Funding Source commitment control will ensure that no more than 100% of a funding source is applied to project(s). –Funding Source commitment control will ensure a project will not overspend the assigned amount of a funding source.

23. © 2006 IBM Corporation 23 Defining Funding Source in Commitment Control: Overview  Funding Source will be used to store information on a distinct funding stream associated with one or more projects including: –Description Funding Source Table –CFDA # CFDA Number –Grant Document ID # Letter of Credit ID –Original Fund (State Matching Funds FS Char 1 Transferred to Federal Funds) –Initial Year Budgeted / Awarded FS Char 2 –Total Award Amount Amount –Award Amendment Amount FS Trans Log Item –Remaining Available Balance Amount minus Applied

24. © 2006 IBM Corporation 24 Defining Funding Source in Commitment Control: Overview (Continued)  Funding Source (Sample Screenshot)

25. © 2006 IBM Corporation 25 Defining Funding Source in Commitment Control: Funding Source Allocation Process  The Funding Source will be defined in Commitment Control and then assigned at the Project Budget level based upon Funding Source Allocation rules for the Project.  The data entry clerks will not assign the Funding Source at the time of Initial Transaction Entry.  Instead, the Funding Source(s) would be assigned to related transactions of a Project at the time the transactions are Budget Checked based upon the Funding Source Allocation rules established for the Project.

26. © 2006 IBM Corporation 26 Defining Funding Source in Commitment Control: Funding Source Allocation Process  Benefits of the Funding Source Allocation Process: –If the Funding Source Allocation process was not utilized, for transactions where multiple funding sources applied to a transaction, the data entry clerk would have to input two lines. Funding Source Allocation eliminates this duplicative effort. –When using the Funding Source Allocation, the Funding Source(s) are assigned based upon established allocation rules that can be centrally defined, as opposed to relying upon data entry clerks identifying and correctly inputting the correct Funding Source(s) and Percentage splits, where applicable.

27. © 2006 IBM Corporation 27 Defining Funding Source in Commitment Control: Funding Source Allocation Process (Continued)  Limitations of the Funding Source Allocation Process:  The Funding Source Allocation can only allocate a transaction for a single project by: –Priority (Spend 100% of A before applying B); or –A Percentage (Apply 50% of A and 50% of B) Typically the Percentage Allocation Process will be used by agencies. –The Fund Allocation Process will NOT allocate based upon both sets of criteria (Priority and Percentage) for a single project.  The Funding Source Allocation will NOT function unless the entire Project Budget is assigned to one or more Funding Sources as part of the Funding Source Allocation rules.

28. © 2006 IBM Corporation 28 Defining Funding Source in Commitment Control: Funding Source Allocation Process (Continued)  The assignment of a Funding Source for Commitment Control through the Funding Source Allocation Process will be required for ALL Projects. –For INDOT Federal Appropriations, the Funding Source will be associated to the SubFederal Granting Agency level by year of initial award (FHWA05, FTA06, FAA07) –For Federal Grants (Block Grants and Single Purpose Grants) the Funding Source will be at the individual Grant Award/Grant Document ID. –For State Appropriations transferred to Federal Funds, the Funding Source will be associated to the State Matching Fund and the initial year of appropriation.

29. © 2006 IBM Corporation 29 Defining Funding Source in Commitment Control: Funding Source Allocation Process (Continued)  Funding Source Allocation (Sample Screenshot)

30. Global Business Services © 2006 IBM Corporation Defining Funds Distribution

31. © 2006 IBM Corporation 31 Defining Funds Distribution in the Projects Module  Funds Distribution is NOT the same process as Funding Source Allocation.  Funds Distribution is a delivered PeopleSoft process. The intent of Funds Distribution is:  To distribute project costs among multiple funding sources based on user identified distribution rules. These rules are applied to incoming transactions to assign costs accordingly.  Transactions are selected for funds distribution based on the following transaction attributes: –Project –Activity –Analysis Type

32. © 2006 IBM Corporation 32 Defining Funds Distribution (Continued)  The Project Module’s Funds Distribution Process will be used to assign Category(s) and, if applicable, SubCategory(s) based upon the established Funds Distribution Process for each Project to denote the funding stream(s) for each transaction.  Based upon additional functionality in the State modification, the Funds Distribution Process will allocate Project transactions by percentage with a defined priority sequence which will revise the funding stream(s) and percentages when a certain funding stream has been fully consumed.

33. © 2006 IBM Corporation 33 Defining Funds Distribution (Continued)  The Funds Distribution Process will be used to assign a distributional activity code to Project transactions to identify the percentage of each transaction to be forwarded to the Contract and Billing Modules for Federal and Local Billing.  The Funds Distribution Process produces new transactional lines with a separate Analysis Type while maintaining the original transactions and their original Analysis Type.  The Analysis Type serves as a means to view transactions based upon both their classification before and after funds distribution.  The Funds Distribution Process will be Required for ALL Projects.

34. © 2006 IBM Corporation 34 Defining Funds Distribution (Continued) Funding Source Allocation and Funds Distribution Process Comparison Matrix

35. © 2006 IBM Corporation 35 Defining Funds Distribution (Continued)  Why are Funding Source Allocation and Funds Distribution Required for ALL Projects? –The Funding Source Allocation Process is required to maintain Commitment Control at the individual funding stream level at the time of the initial transaction. –The Funds Distribution Process is required for Federal and Local Billing as well as Federal Reporting generated from the Project Module. –The Funds Distribution Process as modified by the State Modification includes the additional functionality to integrate the assignment of transactions by Percentage and Priority, which is not supported in the Funding Source Allocation Process or the delivered Funds Distribution Process.

36. © 2006 IBM Corporation 36 Defining Funds Distribution (Continued)  State Modification of Funds Distribution Process (Sample Screenshot)

37. © 2006 IBM Corporation 37 Defining Funds Distribution (Continued)  Delivered Funds Distribution Process: Definition of Project, Activity and Analysis Type to Undergo Funds Distribution (Sample Screenshot)

38. © 2006 IBM Corporation 38 Defining Funds Distribution (Continued)  Delivered Funds Distribution Process: Definition of the Resulting Transaction Lines in the Project Module after Funds Distribution (Sample Screenshot)

39. Global Business Services © 2006 IBM Corporation Project Module Chartfield Descriptions

40. © 2006 IBM Corporation 40 Defining Activity  There will be two types of Activities assigned to ALL transactions in the Project Module: –Functional Activity is assigned to the initial transaction – this should be at the level of detail of the federal award budget –Distributional Activity is assigned during fund distribution – this will denote Federal, State or Local sources as required in the Federal Billing process.  ALL Project Transactions are required to be assigned a Functional Activity.  ALL Project Transactions will be assigned a Distributional Activity after the Funds Distribution Process  After the Funds Distribution Process, the Functional Activity will be maintained in Project User Field #5 in the Project Module for each transaction.

41. © 2006 IBM Corporation 41 Defining Functional Activity  Functional Activity = (a seven numeric character chartfield).  ALL initial transactions containing a Project must have a Functional Activity assigned.  The Functional Activity at a minimum must be reported at the same detailed level as the Federal Budget for the Federal Grant or Federal Appropriation.  Budgets will be Developed at the Activity Level. –Where required by the Federal Grant / Appropriation a Commitment Control Budget will be established at the Activity level. –Where not required by the Federal Grant / Appropriation, the Activity Budget will be used only for Tracking purposes.

42. © 2006 IBM Corporation 42 Defining Distributional Activity  Distributional Activity = (a seven alphanumeric character chartfield).  ALL transactions processed through Funds Distribution will be assigned Distributional Activity(s) based upon this process.  ALL transactions within a Project will undergo the Funds Distribution Process.  The Distributional Activity(s) will be used in the Billing Process to denote amounts to be billed to the federal government and potentially to local governments, if applicable.

43. © 2006 IBM Corporation 43 Defining Activity  Project Activities Details (Sample Screenshot)

44. © 2006 IBM Corporation 44 Defining Source Type (Resource Type)  Source Type = (5 alphanumeric character chartfield): –For agencies that are required to report to the Federal Government at a level more detailed than the level required for budgetary control, the Source Type Chartfield will capture this information. Example: DOH may be required by a Federal Grant to establish a Budget at the level of Salaries, Fringe Benefits, Contractual Costs, etc. this would be the Functional Activity. Below these activities they may be required for Federal Reporting to report Salaries separately by Professional Salaries – Certifications, Professional Salaries – Non- Certifications and Administrative Salaries. This more detailed information would captured in the Source Type.

45. © 2006 IBM Corporation 45 Defining Category (Resource Category)  Category = (5 character numeric chartfield that is autonumbered sequentially to correspond to the Funding Source value):  The Category chartfield is assigned to each transaction that undergoes the Funds Distribution Process.  For Federal Grants (Block Grants and Single Purpose Grants) the Source Category will be assigned at the level of the Individual Grant Award/Grant Document ID.  For INDOT’s Federal Appropriations the Source Category corresponds to the granting subagency and the year of initial award (FHWA05, FHWA06, FTA05, FAA06)

46. © 2006 IBM Corporation 46 Defining SubCategory (Resource SubCategory)  SubCategory = (5 alphanumeric chartfield): –The SubCategory allows you to track and report transactions at a funding stream level in more detail than that captured in the Category. –In general, the SubCategory will NOT be required to be assigned to transactions in the Funds Distribution Process. –In instances where there is a need to utilize the SubCategory, the SubCategory will be assigned during the Funds Distribution Process. For INDOT’s Federal Appropriations, the SubCategory will be assigned to all transactions at the individual Federal appropriation level. For certain Federal Grants there may be a similar need to use the SubCategory field to track transactions related to a specific funding stream at a level lower than the Individual Grant Award/Grant Document ID level.

47. © 2006 IBM Corporation 47 Defining Analysis Type  Analysis Types are automatically assigned within the Project Module to individual transactions to identify different types of transactions, such as estimated costs, budgeted amounts, actual costs, and billed costs.  To ensure the same transaction line is not processed multiple times by the Funds Distribution Process, the Funds Distribution Process rules will be defined to select transactions with a defined Analysis Type (generally “ACT” for Actuals) and then assign a new Analysis Type of “FND” on the new transaction line produced during Funds Distribution.

48. Global Business Services © 2006 IBM Corporation Next Steps

49. © 2006 IBM Corporation 49 Next Steps  Next Meeting: –Wednesday, February 21, 2007 (10am – Noon) IGCS Conference Center Conference Room A  Projected Agenda: –Additional Agency Comments related to Today’s Presentation. –Walk-through of the various levels of Commitment Control/Budget Tracking for Projects. –Discuss Process for Specialized Project Requirements including: Indirect Cost Rates; Indirect Cost Pool Allocations; Maintenance of Effort Reporting; Program Income; Site Tracking; and Additional Project Reporting Items.

50. © 2006 IBM Corporation 50 Contact Information  ENCOMPASS Website –http://myshare.in.gov/sba/encompass  Project Reporting Work Group Webpage –TBD  ENCOMPASS Email Address –encompass@sba.in.gov  Reference to Version 8.9 Peoplebooks –http://devfin.gmis.in.gov/soi_fssignon_index.html –Commitment Control Peoplebook –Project Costing Peoplebook We welcome your feedback/questions/comments