Budgetary control enables you to monitor and control expense commitment transactions entered for a project, based on a project cost budget. Expense commitment transactions are transactions for non-inventory items. Oracle Projects enforces budgetary control for:
Project-related purchase requisitions and purchase orders entered in Oracle Purchasing
Contingent worker purchase orders entered in Oracle Purchasing
Supplier invoices entered in Oracle Payables
Project-related prepayments not matched to a purchase order and the application of unmatched prepayments to supplier invoices
Budgetary control is enforced for supplier invoices entered in Oracle Payables. However, because expense reports are generally entered after costs are already incurred, budgetary control is not enforced for project-related expense reports entered in Payables. Therefore, you should ensure that your procedures for approving expense report expenditures include verification of available funds according to your business requirements.
Oracle Projects enforces budgetary control only for unmatched prepayments and for applications of unmatched prepayments to supplier invoices.
You can optionally define budget accounts for project budget lines at a higher level than transaction accounts. You must ensure that transaction accounts roll up to budget accounts within the budget account hierarchy in Oracle General Ledger. Similarly, if you define your own rules in Oracle Subledger Accounting to overwrite accounts, then you must ensure that the rules derive transaction accounts that roll up to budget accounts.
Note: Oracle General Ledger does not allow you to post encumbrance journal entries to summary accounts.
When budgetary control is enabled for a project, a funds check is performed for all project-related expense commitment transactions before the transactions are processed. After a transaction is approved, the funds check process immediately updates the funds available balances to account for the approved transaction.
The funds available for a transaction are calculated by subtracting the actual and commitment balances from the budget amounts for a given budget category. The funds check process is based on the budgetary control settings.
Funds check is also triggered when you review the budget accounting for GL integrated budgets. When you select the By Account tab in the Review Budget Account Details page, an automatic funds check is performed.
You can view budget and encumbrance subledger journal entries from the Oracle Subledger Accounting Inquiry menu in Oracle Purchasing, Oracle Payables, and Oracle Projects.
From the Oracle Subledger Inquiry menu, choose Subledger Journal Entries. From the Subledger Journal Entries page you can choose how you want to run the inquiry. If you choose to view data when any option is met, you must minimally specify either the ledger or GL date. You can choose either Budget or Encumbrance as the Balance Type. You can select additional options as needed.
For additional information about encumbrance event classes and event types, see: Integrating with Oracle Subledger Accounting and Data that Oracle Projects Predefines for Oracle Subledger Accounting.
Additional Information: You cannot drill down from the subledger accounting level to see details of the journal entries.
Other Sources
Implementing Budgetary Controls, Oracle Projects Implementation Guide