1. Implementing Project Financial Management and Grants Management
  2. Considerations for Implementing Project Financial Management Without an Organization Hierarchy

Considerations for Implementing Project Financial Management Without an Organization Hierarchy

If you have a simple organization structure and don't need the advanced functionality that uses organization hierarchies, such as capitalized interest rate schedules, you can implement Project Financial Management without an organization hierarchy.

Not having an organization hierarchy facilitates quick implementation and provides a simplified user experience.

Burden Schedules

You can create burden schedules without an organization hierarchy and also assign multipliers to each organization individually or a single multiplier to all the organizations.

Capitalized Interest Rates

Capitalized interest rates require a department or organization hierarchy. When the hierarchy type is None, you can't create new capitalized interest rate schedules because the Default Organization Hierarchy and Organization Hierarchy lists on the Manage Capitalized Interest Rate Schedules page don't display any values.

Using Capitalized Interest Rates

Prior to creating a Capitalized Interest Rate Schedule for No Organization Hierarchy, you must:

  1. Update the Manage Organization Hierarchies and Classifications - Organization Hierarchy Type to None.

  2. Run the Maintain Project Organization process.

  3. Define a Rate Multiplier for each organization with projects that have transactions eligible for capital interest calculation on the Manage Capitalized Interest Rate Schedules page.

  4. Select Build Rate Schedule from the Manage Capitalized Interest Rate Schedule page.

Upload Configuration Packages

You can't use the import configuration packages process to change the hierarchy type in the target environment. To change the organization hierarchy type, you must use the Manage Organization Hierarchies and Classifications task in the Setup and Maintenance work area.

You can import all burden schedules regardless of the hierarchy type used in the target environment. However, if a burden schedule uses a hierarchy, the hierarchy must exist in the environment. You can only import capitalized interest rate schedules when there is a department or organization hierarchy type in the target environment.

Impact on Existing Transactions

You can change the organization hierarchy type using the Manage Organization Hierarchies and Classifications task.

When you change the hierarchy type to None then the:

  • Existing burden schedules continue to use their original hierarchy. However, you can't select hierarchies with the old hierarchy type when you create new burden schedules.

  • Organization Hierarchy and Hierarchy Version for project and task owning organization hierarchy and the expenditure organization hierarchy for all business units also change to No.

If you're changing the organization hierarchy type from None to a Department or Organization Hierarchy, you must ensure that the new organization hierarchy includes all the organizations that are used in existing transactions.

Note: You must run the Maintain Project Organizations process after you update project organization classifications or hierarchies.

Business Unit Setup

You must verify the business unit setup if the organization hierarchy list is empty or it's missing when you try to create a project or project template.

If the organization list is empty, the organization setup is incomplete and you must verify if the tree version is active and is denormalized using the Row Flattening action. If one or more organizations are missing, you must verify if the organization is added to the tree and classified as a project and task owning organization.

In any case, you must run the Maintain Project Organizations process after you update the set up.