Sponsored Project Cost Distribution Using Available Award Funding

Hello, my name is Joe. Welcome to training for Grant Management in Oracle Cloud Project Management. In this session, we will talk about project cost distribution using award funding patterns, specifically the new functionality for sponsored project cost distribution using available award funding. This demonstration will provide an overview of the entire solution, as well as the enhancement that is specific to release 25B.

For the capabilities covered in this training, I'll give an overview, followed by more detail to explain how you can use them and what business value they bring. Then I'll walk you through a demonstration. Finally, I'll explain what you need to consider before enabling these features in your business, and what you need to know to set them up.

The award distribution functionality uses funding patterns to derive the award and funding source for sponsored project cost, reducing the complexity and cost capture and increasing the efficiency and effectiveness of meeting contractual obligations. Leveraging the existing power of the grants and project management functionality that enables grants administrators to create projects that are sponsored by awards and funding sources. The use of funding patterns provide sponsor project staff with the confidence that personnel creating cost don't need to know, or generate the necessary split of cost to awards and funding patterns.

Project information is defined for the cost, and the funding patterns distributes them to the defined award and funding sources. Cost capture staff are provided with the ability to view results at the same time of cost capture and overwrite if needed. Automated integrations with third parties can defer the distribution of the cost to using the funding pattern at the time of cost import.

Lastly, there is an ability to simulate or test the cost entry by grants accountants to resolve errors and to ensure that project costs follow the patterns producing the expected results. Specifically in this release, there is added functionality that allows funding patterns to perform a funds check while distributing funds. Two additional options are available when performing funds check is enabled. One, you treat awards that have been defined with control budgets as advisory to be treated as absolute, and prorate across distribution sets. We will describe this specific added functionality in more detail and provide a scenario based demonstration for a comprehensive understanding of award distribution.

As mentioned, funding patterns are the foundation for automating the distribution of cost to awards and funding sources. They are created for summary, or lowest level task, or the project as a whole, and have a start and end date related to the expenditure item dates. The distribution sets are applied in a precedence order. The new option to perform funds check is part of the distribution of the project cost provides three separate functions that work collectively.

The first one, perform funds check. This controls whether the funding pattern will use the control budget to check for available funds for the cost being distributed. When enabled, two additional options become available. Treat advisory is absolute, which allows for the spend that is specific to an award and funding source to continue in an advisory manner, while ensuring that when the funding pattern is used to distribute a cost, it will treat advisory as if it was absolute control level. And prorate across distribution sets, which allows the consumption of funds available in the control budget and distribute the remaining amount to the subsequent distribution set or sets, allowing for the budgeted funds to be consumed in each set. These options will be demonstrated later in this overview.

For customers that use third party systems to generate costs that need to be integrated with Oracle Cloud project in grants management, the funding patterns allow you to leave the distribution of the cost through the funding pattern to happen during project cost import. Grant accountants can review and resolve errors after the import from the third party systems. There is an additional error stage provided for the award distribution.

The test awards distribution action in the manage unprocessed cost work area can be used to see why a cost failed, or to simulate a new cost to see if it succeeds. For additional details, the user can select the view results button, which takes them to the enhanced project cost distribution results page. From here, you can see that the perform funds check options that were defined by the funding pattern being used. You can also see the distribution results overall in the details by distribution insets. Viewing details is as simple as clicking on the rejected link and the failed buttons here.

The business benefit of funding patterns is that they reduce the complexity associated with manually splitting distributions and cost capture, and increase the accuracy of meeting the funding requirements associated with awards from both external and internal funding sources. The new form funds check options further these benefits by reducing the need for project cost transfers due to incomplete use of available funds. This demo will show you how these enhancements can be used by your business.

In the following demonstration, I will be using the scenario of Vision City leading a bridge safety remediation project that is funded by 3 external and one internal funding source. The three external funding sources are the Federal Highway Administration, the state of California, and the California Department of Transportation. They all have differing and some overlapping contract requirements. Vision City, as the sponsor program office for the project, is represented in the demo as the internal funding source to provide cost sharing requirements.

This is the Gantt chart for the bridge remediation project. All three awards and funding sources reviewed already fund this one project. Here is an illustration of the three awards that are funding the bridge remediation project. The Department of Transportation award and the Federal Highway Administration award both continue for the entire duration of the five year project that ends on 9/30/2025. The state of California is only budgeted for one year of the construction activities.

Now I will illustrate how the funding pattern we will be using has been set up to meet the contractual obligations which are using the new functionality of perform funds check. In this example, there are three distribution sets for the funding pattern of construction for task 3.1. Costs will be distributed based on a precedence order. In distribution set one, 100% of the cost will attempt to be distributed to the state of California as the duration of the award is limited to just one year.

In distribution set two, there are three distributions. The Federal Highway Administration is set to 50%, The internal funding source is responsible for 36, and the state of California is responsible for the remaining 14%. In distribution set three, the California Department of Transportation, or Caltrans, has been set up to cover the remaining costs that have not been covered in distribution sets one and two.

Let's review existing purchase order 251, which was created for the bridge remediation project task 3.1. The purchase order is in the amount of $26,000 and is for airfare, which is budgeted as expenses for travel and consultants so that they can be reimbursed easily. Notice that the purchase order does not require a contract and funding source because there is an existing funding pattern for this project task combination. It does not prevent users from entering the award and funding source directly if needed.

By selecting the action distribute project cost, the buyer is using the funding pattern to generate the distribution from the one cost. You get this verification message, and then you're able to view the results. The result is four distribution lines created based on the funding pattern. I will now explain why.

Let's review the distribution results for distribution line one. The amount of $10,000 was distributed to the state of California. The funding pattern for distribution set one attempts to distribute the full $26,000 to the state of California. However, the remaining balance for this award is just $10,000 for the expenses budget.

The control budget is set to advisory. So a purchase order that is specifically charged to this a project award and funding source would be allowed. But since we have used the treat advisory as absolute and this purchase order is distributing using this funding pattern, we are treating it as an absolute level budgetary control. Since the prorate across distribution sets was selected, the remaining control budget balance of $10,000 was consumed. This illustrates how the two options will be used together.

Let's review the distribution results for distribution lines two and three. The amount of $8,000 was distributed to the Federal Highway Administration, and $5,760 was distributed to internal. Let's investigate as to why. Distribution set one is successfully distributed the first $10,000. So there is a remaining $16,000 purchase order balance. The award distribution engine will move on to distribution set two.

There are three distribution rules in distribution set two. FHWA is for 50%, internal is 36%, and the state of California is the remaining 14%. The available amounts in the budget lines are $10,975.75 for FHWA and $8,800 for internal. The control budget is set to absolute at award project in top resource.

Distribution set two will attempt to distribute the remaining purchase order amount of $16,000. Those amounts are illustrated here. Both the FHWA and internal funding sources have sufficient funds to cover the full distribution percentages and are consumed. The state of California has consumed its available balance and distribution set one for $10,000. So the $2,240 will fail and the remaining amount will prorate to distribution set three.

The remaining prorated amount of $2,240 prorates to distribution set three to the California Department of Transportation. That summarizes how the distributions were generated on this purchase order. It represented how the new performed funds check options all work together to distribute a cost of $26,000, consuming all available control budget amounts.

In this section, we provide implementation considerations and setup instructions for the enhancements covered. To use the new functionality in the funding patterns, you will need to create or duplicate funding patterns and set the perform funds check option to enabled and set the funding patterns to active. This table details the ship privileges and their functionality, along with the shipped roles that have these privileges roll up to them.

The business processes associated with the new capabilities covered in this training are detailed here. The high level business process is sponsored project management, with activities that span the creation and maintenance, and the cost control and management for sponsored projects. This concludes this presentation. Thank you for watching.