Open Item & budget Carryforward.

Question

Dear All!
we are little bit confused regarding the closing procedure of  Funds Managment ( BCS).
I'm writing the following scenerio that may I able to understant every one!
I entered the Budget $100 and Released $ 40. When I execute the transaction FMRP_RW_BUDGET for budget overview, system display the following Information:
Current Budget : 100 , original budget : 100 and by executing the FMRP_RW_BUDCON transaction. system display the following information
Consulabale budget: 40 Consumed Budget: 0 Avilabale Budget : 40 and Current Budget: 100.
Now I created the purchase order : 30, then system displaying the information by exeuting FMRP_RW_BUDCON  the cosumed budget 30  and available budget : 10
and current budget : 100
I carryforward the  open item (purchase order) to next year, system forward the open item & display the following information in next year by executing the above reports
Transaction: FMRP_RW_BUDGET
Current Budget : 30 Orginal : 0
when I carryforward the residual budget, system carry forward the $ 70 to next year and the amount $100 is still available for release & consumabale, also the current budget become again 100 by forwarding the budget.
please expalin what the system is doing is ut correct? why all the amount still available for consumable?
please tell me following are the correct sequance of closing.
   1- Open Item
   2- budget ( with key figure YE_RESIDUAL)
further, in what cases the transaction FMMC-close open item is being used?
Thanks

Answer 1

Hi MSiddique,
We are a governmental entity. We use FMMC to close out prior year obligations (encumbrances - i.e. purchase orders, purchase requisitions) that will not get carried forward into the next fiscal year.
For the encumbrances that remain open and will get carried forward to the next fiscal year, we use FMJ2.
So for instance if we have 100 original and 100 current in starting out in FY06, and we have an existing purchase order for 20 and 35 was already expended (i.e. invoiced and paid), the consumed would be 55 and the available would be 45. At the beginning of FY07, only the existing encumbrances that we didn't close using FMMC will be carried forward along with the related budget of 20 using FMJ2. If 45 wasn't used it would not get carried forward (unless it involves a multi year capital project)
The FY06 Budget would look like this
Original 100
Current 100
Encumbered 20
Expended 35
Consumed 55
Available 45
After the carry forward to FY07 would look like this
Original 130 (new approved budget for the new year-not related to FY06)
Carryforward 20
Current 150
Encumbered 20
Expended 0
Consumed 20
Available 130
We had to create custom reports instead of using the standard reports.
Our sequence of closing is as follows...
All requisitions not converted to a P.O. gets closed - FMMC
All P.O.s identified not to roll forward gets closed - FMMC
All remaining P.O.s are carried forward FMJ2
FMJ2 rolls forward the remaining P.O.s as well as creates a budget document for the new fiscal year (but we keep it seperate from the original by using a carryforward column. I hope this helps.