Understanding Project Costing

Last Updated: June 6, 2024 10:55:37 AM PDT

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Read more about understanding how costs post and are accounted in Project Portfolio Management (PPM).

For more detailed information on Project Portfolio Management, please review the PPM User Guide.

Recharge Costs

Cost Redistributions

How Does PPM Process Costs?

Creating a Manual PPM Cost (MCI) File

Matrix of Errors and Corrections

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Basics of PPM Costing

Definitions

Project Cost: This is generally an expense or a charge
PPM Manage Project Costs: Within the Oracle Financial Cloud, transactions are accounted for in the General Ledger (GL) but can be tracked at a more granular level within Oracle Project Portfolio Management (PPM). Project Costs is designed to track detailed transactions and gives departments ability to granularly track costs/charges/expenses for a particular activity/purpose.
POETAF: To code transactions to the PPM subledger, Project number, Organization, Expenditure Type, Task, Award, and Funding source must be provided. All transactions in PPM have four required fields and two (sometimes) optional fields:

Name	Description	Required for
Project Number</strong	The unique number that describes a project. These identical values will also appear in the COA in the Project segment.	All transactions in PPM
Expenditure Organization	Organization generating the expense. Does not drive accounting-only reporting	All transactions in PPM
Expenditure Type	The specific type of expense being incurred. The expenditure type is used to derive the account segment value in the COA, but expenditure types are more granular. Use the Project Information Lookup Report to see all Expenditures. There can be multiple expenditure types associated with a single account code, each with a different description.	All transactions in PPM
Task Number	The number that represents the project task incurring the expense.	All transactions in PPM
Award number	The award to be used for this transaction. The base award number matches the Kuali Research (KR) award number.	Transactions against projects that have awards.
Funding Source	Name of the sponsor in KR for the external funding source. This is NOT the same as the Fund in the CCOA. This is also the name of any Internal Funding Sources (used for Cost Sharing)	Transactions against projects that have awards.

Accounting Period in Manage Project Costs

The accounting period in the Manage Project Costs Search screen should be considered a “most recently accounted for” accounting period.

What is meant by this? This means that if any costs are recalculated (change billable/non-billable, recalculate rate schedules, etc.), the system will “update” the accounting period. The GL entries create an "in and out" (credit/debit) in that month. The Cost reports that Sponsored Projects Finance (SPF) uses to bill sponsors shows the “original accounting period” to ensure a match with how sponsors are billed.

Reminder, this is important when reconciling costs looking at the expenditures by month. Please be careful when you rely on the accounting period in the Manage Project Costs Search results. The Transaction Details report has a filter to search by Original Accounting Period or "Most Recent"

Understanding Dates

Costs must be incurred during award/project/task dates. In other words, the Expenditure Item date of the transaction(s) must be within the start and end dates of the task being charged.

Expenditure Item (EI) date: Date a cost was incurred (service or good provided). This is not necessarily the same as the Accounting period
Accounting Period: Period in which the cost was accounted to the GL
Project End Date: Date project ends. This is equal to the latest task end date.
For more information on Dates, see PPM User Guide section 2.2.8.

How do costs get into PPM?

How does accounting work on PPM costs?

Project Portfolio Management (PPM) creates accounting for costs imported from outside Oracle Fusion Payables through Subledger Accounting rules (SLAs). Examples of expenses processed this way include UCPath and recharge facilities' internal billing
An expense (cost) is an item requiring an outflow of money, or any form of fortune in general, to another person or group as payment for an item, service, or other category of costs
PPM cost is a single cost in PPM but creates a 2 line journal to the General Ledger.
- The Cost in PPM represents the “raw cost” or the expense or the natural debit of the transaction
- Behind the scenes, SLAs drive the credit/liability or raw cost clearing
  - The raw cost clearing account is 773046 for most costs that are accounted in PPM.
  - Exceptions include Payroll, tuition remission and a few other costs in which they have other SLAs for different liability accounts.
  - This Raw Cost Clearing account must net to zero. As long as cost creators ensure that billing and income (or the plus/minus of cost distribution) net to zero by batch, this clearing account will be zero. This should be reconciled monthly, but no later than Fiscal Year end.
- Note that most day-to-day users will never need to know this information. But this is important for users that work in a recharge operation, auxiliary or other self supporting activity

Cost transactions created from source systems outside of OFC and PPM include, but are not limited to; Student Information System (ISIS), EPIC, and Financial Control
- Entries will import into the general ledger (GL) via journal entry
  - Transactions are subsequently posted to PPM-Project Costs through an import file with a Transaction Source Document that makes the transactions "costed and accounted" to avoid a duplicate journal entry in the GL
    - Costed and accounted transactions only post to the PPM sub-ledger; they do not impact the GL
  - The import file data contains the POETAF + chart strings. The chart strings should represent the original GL journal entry
PPM adjustments such as a transfer, split, etc., impact the GL. Note: As of August 2021, the SLAs use the chart strings from the original transaction instead of the project setup information to derive the accounting entries
- PPM adjustments generally have three transactions: original, reversal, and new. The accounting of the reversed transaction now originates from the initial transaction and uses the accounting string from the initial cost transaction
- The new transaction uses the data elements in the project setup to derive the accounting chart strings

For more information, read the How to Identify and Correct Costed and Accounted PPM Adjusted Costs KBA.

Who approves access to the APIs and/or RMP applications?

How do I get setup with RMP application access?

Who do I contact about costs from an integration or manually created?

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Recharge Costs

Recharge operations are approved activities overseen by Costing Policy and Analysis. Not all costs are overseen by the Costing Policy and Analysis Office

Imports should always have corresponding credits and debits.
Only approved recharge operations with rate proposal can lump expense including salaries/NGN/expenses which becomes a rate. Other units should not do that because then the actual expense is “hidden” and impacts the Financial statements.
- Aux and large cost centers do this with expenditure types for “redistribution” on the credit and debit. This redistribution is usually (but not always) within same Department (not necessarily posting FinU). The expenditure types are not always consistent between departments or processes.

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Recharge Internal Billing and Internal Income

Recharge Facility Yearly entries:

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Cost Redistributions

Cost Redistribution: When there is a single cost that needs to be moved to multiple projects, charging the multiple projects originally is always best practice. In cases where that is not possible, Split the transaction as many times as needed and then transfer as needed. In rare cases where that is not possible, you may need an alternative to redistribute that cost.

Cost redistributions should not be done via integration or the RMP Recharge Application unless an exception approval is granted. Costs should be charged correctly up front or cost transfers should be processed directly in PPM.

These can be processed in the RMP Recharge Application with approval from ICA.

How does PPM process costs?

PPM cost processing is not like journals. Each line of a cost import is its own individual transaction. If a file has 10 costs, 9 may post and 1 may not.

What happens to PPM costs?

Costs are loaded and imported to PPM in 2 steps.

Loaded to PPM interface table
Imported to Project costs

If cost imports fail during step 1, they are not loaded to Oracle at all and the error must be fixed and resubmitted. This is typically due to a structural issue in the file or data element format error.

If costs fail at step 2, it may be all or part of the import batch. These costs will remain in unprocessed costs until resolved.

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Unprocessed Costs

Cost Creators: Resolving unprocessed costs

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I think I need to create a manual PPM Cost (MCI) file-what do I do?

There are a few known current exceptions that have been approved by Internal Controls and Accounting and the Costing Policy and Analysis Offices during the 20-21 and 21-22 Fiscal Years.

Beginning in FY 22-23, as Oracle Financials Cloud system enters Optimization, each submission will be re-reviewed for appropriateness by ICA and if appropriate, an exception may be granted. After ICA reviews for appropriate accounting and that use of manual costs (instead of natural system, subledger transactions) (or instead of resource transfers/allocations) is appropriate, PPM SD will process these files as submitted. PPM SD is available to partner with central and department offices to advise on various methods and solutions for processing transactions with the correct accounting.

If you feel that you need an exception, please submit a request to ICA via S&S. The request should always include the long term solution or indicate if assistance is needed to develop a long term process.

Creating manual costs is risky due to the lack of systematic processing through a transactional system. However, some FBDI MCI files were accepted at go-live for a few approved exceptions while the system was being stabilized.

Currently, PPM-SD processes these exceptions but does not review the appropriateness or accounting of manual files.

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Balanced files using natural PPM SLAs

I need to create a manual one line cost (not balanced) -what do I do?

I need to create a manual one line cost (not balanced) or a GL to PPM (costed and accounted) entry-what do I do?

Most costs are intended to create accounting to the GL with standard SLAs (see above). However, there are some use cases (e.g. non project to project cost transfers) that require unique, non standard SLAs to be used. One way to accomplish this is to use a Costed and Accounted MCI + Journal. Effective immediately, this bifurcated process should not be used, instead the Non-Project to Project or Project to Non-Project Cost Transfer process should be used. This allows a PPM process to drive the intended accounting, reducing the risk of reconciliation. See the Cost Transfer training from Dec 20 for instructions.

FBDI MCI files are VERY particular and the file must be completed EXACTLY as prescribed to be processed. Any errors in the file may create errors as outlined above and delays in processing. These files are not designed or intended to be used by end users, so should be very closely evaluated before use.

An application to process these via self service has been requested with ITS.

Known exceptions of unbalanced files-goal is for these to be eliminated in FY23

Payroll – (CBR, and PPS corrections, and others if needed)
Disbursements – (corrections from GL to PPM)
Graduate Division - (Tuition Remission)
Integration failed (unprocessed) costs
- ISIS
- UCPath
Department charging “lump” costs to Capital Project can move this to RMP app

Known approved cost redistribution cases—currently in use in the RMP Recharge App:

Using RMP Recharge App: Auxiliary/large cost center Cost Redistributions: (HDH, Extension, ITS, Parking)
Using RMP Recharge App: Cost Redistributions: Facilities management (from HR and ITS), ITS (“indirect” costs and others) and others-list not currently maintained

Known GL to PPM exceptions that need technical or new business process solution for the Non Project to Project entries

Preuss School. They are uploading a journal + MCI file
Legal fee credit to expense from MC to Campus (Journal + MCI) ** this is now using the non project to project FBDI file.
Auto Liability

Matrix of Errors and Corrections

(Error) Message Text	(Error Message) - User Details	Required Action by user
Rejected - Error on table PJC_TXN_XFACE_STAGE_ALL, column EXPENDITURE_ITEM_DATE. ORA-01843: not a valid month	NA	For Manual MCI Imports - Fix the MCI File and Resubmit it. For Imports from a Recharge App (API) - Resubmit a corrected file from the App
Rejected - Error on table PJC_TXN_XFACE_STAGE_ALL, column EXPENDITURE_ITEM_DATE. ORA-01830: date format picture ends before converting entire input string	NA	Correct the Date Format to yyyy/mm/dd and import file again.
	Generally all STAGING issues are structural to the file, column shifted, macro corrupted, missing data field, etc.	Review original .xlsx file and look for data elements in wrong structure/location
The business unit doesn't exist because it doesn't have a valid business unit ID. ; The project number doesn't exist because it doesn't have a valid project ID.	NA
The expenditure organization doesn't exist because it doesn't have a valid expenditure organization ID.	NA	Lookup the "Task Owning Org" for Project on the Project Task Funding Source Report. Select the Org to replace in the file, Edit MCI file and resubmit
The funding source is invalid. Enter a valid funding source for the sponsored project and award combination.	NA	Lookup the Funding Source for Project on the Project Task Funding Source Report or in the Manage Awards screen, and find the valid Funding Source Edit the MCI Import file and resuubmit.
The sponsored project has one or more funding sources. Select or enter the funding source for this transaction.	The F in POETAF needs to be completed	Lookup the Funding Source for Project on the Project Task Funding Source Report. Typically, select the funding source starting with 7, Edit MCI file and resubmit
The task number doesn't exist because it doesn't have a valid task ID.	NA	The task number doesn't exist in Oracle PPM, and is likely an input error. Search the Project in the Manage Projects screen or PTAF report, and find a valid PPM task. Edit MCI file and resubmit
The transaction failed budgetary control validation with one or more errors.	Open the Budgetary Control Funds Status Results page to view the distribution errors.	Correct the DFF's Project Owner to ensure that there is a fund and function on the project/task DFF. User the DFF report as needed
The award budget period wasn't derived for the budget date {BUDGET_DATE}. Ensure that a budget period exists for the budget date.		Post to a new Project/Task ----------------- Request deletion of unprocessed costs. Then submit new file.
The budget date {BUDGET_DATE} is after the award end date {AWD_END_DATE}. Create transactions prior to the award end date.		Post to a new Project/Task ----------------- Request deletion of unprocessed costs. Then submit new file.
The project is enabled for budgetary control but there is no control budget.	Create a control budget by setting the budget to baseline and validate the transaction.	Create a Baseline budget-Dept can initiate, central office approved These can remain in the Unprocessed costs and Central office can process after budget is baselined.
The transaction failed budget check because the budget date isn't within the control budget date range.	The budget date 2020-06-01 isn't between the start date 2019-04-01 and end date 2019-09-30 of the control budgets for the project. For a nonsponsored project, you must either change the budget date or extend the project date. For a sponsored project, you must either change the budget date or extend the dates for the project and the award. If you extend the dates then the budget must be set to baseline such that the control budget dates are extended.	Create a Baseline budget-Dept can initiate, central office approved These can remain in the Unprocessed costs and Central office can process after budget is baselined.
The expenditure failed project-level transaction controls.		Follow this KBA to find the specific transaction control being violated. Most Typical Rule Violated: The expenditure type is unallowable on this project. Post to a new Project/Task ----------------- Request deletion of unprocessed costs. Then submit new MCI Import.

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View matrix of errors and corrections below:

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Matrix of Errors and Corrections

(Error) Message Text	(Error Message) - User Details	Required Action by user
Rejected - Error on table PJC_TXN_XFACE_STAGE_ALL, column EXPENDITURE_ITEM_DATE. ORA-01843: not a valid month	NA	For Manual MCI Imports - Fix the MCI File and Resubmit it. For Imports from a Recharge App (API) - Resubmit a corrected file from the App
Rejected - Error on table PJC_TXN_XFACE_STAGE_ALL, column EXPENDITURE_ITEM_DATE. ORA-01830: date format picture ends before converting entire input string	NA	Correct the Date Format to yyyy/mm/dd and import file again.
	Generally all STAGING issues are structural to the file, column shifted, macro corrupted, missing data field, etc.	Review original .xlsx file and look for data elements in wrong structure/location
The business unit doesn't exist because it doesn't have a valid business unit ID. ; The project number doesn't exist because it doesn't have a valid project ID.	NA
The expenditure organization doesn't exist because it doesn't have a valid expenditure organization ID.	NA	Lookup the "Task Owning Org" for Project on the Project Task Funding Source Report. Select the Org to replace in the file, Edit MCI file and resubmit
The funding source is invalid. Enter a valid funding source for the sponsored project and award combination.	NA	Lookup the Funding Source for Project on the Project Task Funding Source Report or in the Manage Awards screen, and find the valid Funding Source Edit the MCI Import file and resuubmit.
The sponsored project has one or more funding sources. Select or enter the funding source for this transaction.	The F in POETAF needs to be completed	Lookup the Funding Source for Project on the Project Task Funding Source Report. Typically, select the funding source starting with 7, Edit MCI file and resubmit
The task number doesn't exist because it doesn't have a valid task ID.	NA	The task number doesn't exist in Oracle PPM, and is likely an input error. Search the Project in the Manage Projects screen or PTAF report, and find a valid PPM task. Edit MCI file and resubmit
The transaction failed budgetary control validation with one or more errors.	Open the Budgetary Control Funds Status Results page to view the distribution errors.	Correct the DFF's Project Owner to ensure that there is a fund and function on the project/task DFF. User the DFF report as needed
The award budget period wasn't derived for the budget date {BUDGET_DATE}. Ensure that a budget period exists for the budget date.		Post to a new Project/Task ----------------- Request deletion of unprocessed costs. Then submit new file.
The budget date {BUDGET_DATE} is after the award end date {AWD_END_DATE}. Create transactions prior to the award end date.		Post to a new Project/Task ----------------- Request deletion of unprocessed costs. Then submit new file.
The project is enabled for budgetary control but there is no control budget.	Create a control budget by setting the budget to baseline and validate the transaction.	Create a Baseline budget-Dept can initiate, central office approved These can remain in the Unprocessed costs and Central office can process after budget is baselined.
The transaction failed budget check because the budget date isn't within the control budget date range.	The budget date 2020-06-01 isn't between the start date 2019-04-01 and end date 2019-09-30 of the control budgets for the project. For a nonsponsored project, you must either change the budget date or extend the project date. For a sponsored project, you must either change the budget date or extend the dates for the project and the award. If you extend the dates then the budget must be set to baseline such that the control budget dates are extended.	Create a Baseline budget-Dept can initiate, central office approved These can remain in the Unprocessed costs and Central office can process after budget is baselined.
The expenditure failed project-level transaction controls.		Follow this KBA to find the specific transaction control being violated. Most Typical Rule Violated: The expenditure type is unallowable on this project. Post to a new Project/Task ----------------- Request deletion of unprocessed costs. Then submit new MCI Import.

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