Using Department Expense Code Allowances Version

Contents

Overview

Department Allowances provide a means for departments to define an allowance for a specific expense code for each period of the fiscal year, and trigger warnings when the defined allowance reaches a threshold amount.

Security

Access to Department Allowance functions is controlled by the role object "DeptAllowances."

Enabling Allowances

Department Allowances are enabled on the Organization record. From the main Table of Contents, click Materials Management > Tables > Organizations. Click the MM Information tab and select "Enable Department Allowances."
(For a detailed discussion of setting up an organization, see Identifying Administrative and Operational Units).

Setting up Allowances

Department Allowances can be created from the Allowance tab on the Department record. From the Materials Management main Contents, select Requisitioning > Departments or AP > Tables > Departments. On the Departments panel, click the edit pencil next to any department. When the Department Edit panel displays, click the Allowance tab.

Figure 1 - Department Record, Allowance tab

To set allowances:

1. In the lower part of the panel (Department Expense Allowances) locate the expense code for which you will create an allowance.
   (You can use Position to Expense Code).
2. In the Threshold Percent field, enter a number between 01 and 99.
   
   • A warning will be displayed when the threshold is reached. For example, for a defined threshold of 20%, a warning will appear when less than 20% of the allowance total remains. (See Warnings, below.)
   • The allowance status displayed on the Allowance Summary panel will be determined by this threshold. (See Department Allowance Summary, below.)
   • Threshold amounts can be changed at any time.
   • Note: You will not be allowed to enter a threshold if the total expense allowance is $0.
3. In the Copy/Spread field, select Manual, Copy, or Spread to determine how allowances will be entered.
   
   • Manual: Enter allowances for Period 01 - Period 12 manually.
   • Copy: Enter an amount for Period 01. Click Save. The amount will be copied to all periods.
   • Spread: Enter an amount for Period 01. Click Save. The amount will be divided evenly across all periods. (Any remainder will be added to Period 12.)
4. Click Submit.

Statuses and Calculations

Allowance Statuses indicate whether the allowance or the defined threshold percent have been exceeded.

• Good: Spend has not reached threshold percentage.
• Warning: Spend has exceeded threshold percentage.
• Exceeded: Spend has exceeded allowance.

Statuses are displayed on the Department Allowance Summary panel (Figure 2) and the Requisition panel's Allowance tab (Figure 5). The spend data displayed on these panels always represents a snapshot of activity at that moment.

• The Actual amount is updated in the month in which the issue transaction actually occurs. For example, an approved requisition on June 30 is included in the June Approved amount. On July 1, if that requisition is still in approved status, it will be included in the July Allowance total as an Approved amount. If the requisition issue occurs in July, the amount moves to the Actual column.
• The Remainder column shows the amount remaining after all spend has been subtracted from the allowance for the period for the current month.
  When the month ends, only the actual spend is subtracted from the allowance total, and any remaining spend that is still pending, approved, or on order will be brought forward into the new month.
• Negative remainders are subtracted from the year's allowance total, and not from the subsequent month's allowance.

Department Allowance Summary

The Department Allowance Summary panel (Figure 2) provides a summary of expense code allowance activity for the fiscal year and all periods within it. To navigate to the Department Allowance Summary from the Materials Management main table of contents, click Requisitioning > Departments. On the Quick Click menu (or on the menu for a department on the Departments panel), click Allowance Summary.

Figure 2 - Department Allowance Summary - Current Month View

The Department Allowance Summary panel provides a summary of activity by Expense Code for the current month. You can drill to detail on the inquiry icon (i) to see the requisition lines that comprise the Pending, Approved, Ordered, and Actual amounts. The Period view displays information for the current period.

On the Year view, you can drill to detail by clicking the Details link. The details panel displays a summary of activity for all of the periods of the fiscal year. (See Figure 3 below.)

Figure 3 - Department Allowance Summary - Fiscal Year View

Warning Messages

Messages are issued when spend exceeds an allowance amount or passes the threshold percentage. When a requisition line that will exceed an allowance or threshold is created or approved, a warning message like the one in Figure 4 will be displayed. The message is only a warning; the creation or approval of the requisition will continue to be processed.

Note: The warning message only appears when a threshold is exceeded by the amount in an order guide or a manual requisition. Quick entry requisitions and imported requisitions, for example, will not trigger a warning message when a threshold is reached (but will produce a Warning Status in the department allowance line for the expense code.)

Figure 4 - Warning Message

Users with the proper authorization may change the allowance amount or percentage threshold for the period that is exceeded to prevent further warning messages from occurring.

Creating, Editing, and Approving Requisitions with Allowances

The process of creating a requisition is the same for departments with and without allowances. When a requisition is submitted for approval, lines with allowances appear on the Requisition panel's Allowance tab. The line amount is displayed in the Pending column. (See Figure 5 below).

Even with a line that exceeds an expense code allowance, the requisition can be approved, unless the department explicitly requires routing through the approvals process when a tolerance is exceeded. A warning message will be displayed, just as when the line was created on the requisition, and the approval will be processed. The line amount will move from Pending to Approved.

Figure 5 - Requisition Approval Panel, Allowance Tab

Approvals for Requisitions that Exceed Departmental Allowances

You can require approvals for requisitions that exceed departmental allowances, when there are no other approvals needed on the requisitions.

To make sure that these requisitions route through the approval process, you define departmental allowances and set a flag on the department’s Approval Profile. The flag specifies that when a requisition exceeds the allowance amount and no other approvals are required, the requisition is routed for approval. The approver is either the Direct Approver or the Approver Group assigned to the department.

A Yes in the column Departmental Allowance on the Approval Profiles list indicates that allowance overage approval is required, Figure 6 (far right).

Figure 6 - The Approval Profiles List

To set the flag, edit the approval profile of interest. Under Department Allowance Exceeded, check the Approval Required box (Figure 7).

Figure 7 - Approval Profile Edit Panel

On the approvals queues, the requisition is labeled "for Dept Allowance Group Approval" or "for Dept Allowance Direct Approval," depending on whether a requisition approver group or requisition direct approver is specified for the department.

To use this feature,

• In their User Profiles, set up your approvers and requisitioners.
  (Work in Administration > Administration > Users > edit user profile)
• For your requisitioners, indicate dollar values at which their requisitions need approval
  (Work in Administration > Administration > Users >User Profile > Requester Limits tab).
• Create any approver groups that you may need.
• Create an approval profile,  (or edit an existing approval profile).

  On the approval profile: 

  - Select a Direct Approver or Approver Group.
  - Select Approval Required under Departmental Allowance Exceeded.
  - Assign the approval profile to the department.

• Make sure that you have defined allowances for the department, and that a direct approver or an approver group is assigned to the department (on the department record's Approvals tab).

When a departmental user creates a requisition whose total value exceeds a defined allowance, the requisition appears in the approver queue for either the Direct Approver or for an Approver Group member assigned on the approval profile.

Reports

The following reports on expense allowance activity, both summary and detail, are available in the Report Dictionary:

• Department Allowance PTD Summary by Expense: Summary of department allowance performance (current PTD). Includes Org, Department, Expense code, Pending amount, Approved amount, On Order amount, and Actual amount, as well as the Remainder and Status.
• Department Allowance YTD Summary by Expense: Summary of department allowance performance (current YTD). Includes Org, Department, Expense code, Pending amount, Approved amount, On Order amount, and Actual amount, as well as the Remainder and Status.
• Department Allowance Detail by Expense: Monthly detail of department allowance performance. Includes Org, Department, Expense code, Pending amount, Approved amount, On Order amount, and Actual amount, as well as the Remainder and Status for each month of the year.

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