City’s_Accounting_System_and_SAP_Structure_.pdf
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- Attached to
- Financial Reporting Software
- Solicitation number
- RFP 26-0035
- Issued by
- Maricopa County, Phoenix City, Arizona
About this file
This is a technical specification document for the City of Phoenix's financial reporting software procurement, outlining the city's current SAP system structure and accounting framework. The City of Phoenix is seeking sealed offers for financial reporting software under a five-year contract with an anticipated commencement date of January 1, 2027, contingent upon City Council award and completion of administrative processing by the City Clerk's department. The solicitation is conducted through the City's Procurement Portal, with technical support available through OpenGov's portal support system. The contract will terminate upon the earliest occurrence of the contract term expiration, including any exercised extensions, or pursuant to agreement termination provisions.
The document provides comprehensive detail on the city's existing SAP system architecture, which operates across four integrated modules: Financial Accounting (FI) for external reporting, Controlling/Costing (CO) for operating cost accounting, Project Systems (PS) for capital projects, and Funds Management (FM) for budgetary accounting. The city's accounting structure encompasses multiple company codes representing distinct reporting entities, including the main operating entity (PHX), employee retirement plans, deferred compensation plans, joint ventures, and specialized corporations. The financial framework utilizes standardized coding structures for cost centers, profit centers, general ledger accounts, commitment items, and fund classifications to capture and report detailed financial transaction information across the organization. Pricing terms, set-asides, funding sources, and other specific contract requirements are not detailed in this technical specification document.
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City’s Accounting System and SAP Structure
The purpose of municipal governmental accounting is to provide complete, accurate and timely financial information in proper form to the people responsible for and concerned with the operations of the City. Management, at all levels, relies on financial information for daily decision making and for planning future operations. Budgeting, both in its preparation and execution phases, is dependent upon the availability of correct and properly classified financial data generated by the accounting system. Governmental operations must comply with various legal provisions. The accounting system provides management with the results of financial operations so that this determination can be made in an effective and timely manner. Other principal groups of persons are the general public, investors, investment brokers, bond rating services, other governmental units, educational and research organizations, and individuals whose professional activities include the study and improvement of public financial administration. Their interests and decisions are dependent upon the financial information produced by the municipal accounting system.
The SAP system is an integrated database, which is linked to many different modules (reporting areas) throughout the City. Financial Accounting uses four modules to input, sort and generate reports as shown below. Also, the hierarchy of data and use of data is different depending upon what SAP module you are working in.
SAP MODULE #1 PURPOSE / DESCRIPTION
FI - Financial Accounting External Financial Reporting
Company Code Legal reporting entities, see list included below
Business Area 4 digits - Captures detailed financial transactions for external (generally accepted accounting principles - GAAP) financial reporting.
General Ledger (G/L) Account 6 digits - Captures detailed financial transaction information. Same codes and descriptions as Commitment Items in FM and Primary Cost Elements in
CO.
SAP MODULE #2 PURPOSE / DESCRIPTION
CO - Controlling (Costing) Operating Cost Accounting
Controlling Area Cost accounting activity structure.
Cost Center (Expenditure) 10 digits - Generally starts with two-digit department number, then may be further divided into two-digit division, section, activity and sub activity.
Primary Cost Element 6 digits - Captures detailed financial and cost accounting transaction information. Same codes and descriptions as G/L Accounts in FI and Commitment Items in FM.
Secondary Cost Element 6 digits - Used for work order charges, cost allocations and settlements. Assigned to the 900000 - 999999 range. Not included in the G/L Accounts.
Profit Center (Revenue) 10 digits - Generally starts with two-digit department number, then may be further divided into two-digit division, section, activity and sub activity.
SAP MODULE #3 PURPOSE / DESCRIPTION
PS - Project Systems Capital Projects Funds Cost Accounting
Controlling Area Cost accounting activity structure.
Project 10 digits - The first two digits are alpha characters representing the department, next four characters represent organizational structure, remaining numbers assigned sequentially for each department.
WBS Element 10 digits - Linked to project number. Some have additional characters at the end indicating phase type (e.g., L = land, A = acquisition, P = pre-design, D = design, C = construction, W = warranty). This classification element allows grants and capital projects to be accounted for as separate entities for control and special reporting purposes.
Primary and Secondary Cost Elements See descriptions above.
SAP MODULE #4 PURPOSE / DESCRIPTION
FM - Funds Management Budgetary Accounting
Application of Funds 3 digits - Identifies high-level funding source for financial and cost accounting transactions.
Fund Usually, 4 digits - Identifies detailed funding source for financial and cost accounting transactions.
Funds Center 10 digits - Linked to organizational structures. Many
Funds Centers contain the 2-digit department, division and section numbers and may also be further identified by activity and sub-activity. However, the Funds Center should be verified in SAP as exceptions to this rule exists.
Commitment Item 6 digits - Captures detailed financial and cost accounting transaction information. Same codes and descriptions as G/L Accounts in FI and Primary Cost Elements in CO.
Subdivision of departments into divisions, sections, activities or sub activities is not mandatory. The level of classification depends on the individual requirements of each department. Most SAP Cost Centers and Profit Centers follow the organizational structure below. However, Gift Funds, Trust Funds and other specialized funds may follow a different structure.
General Ledger Accounts are grouped by the following ranges:
100000 - 199999 (Assets) 200000 - 299999 (Liabilities) 300000 - 399999 (Fund Equity) 400000 - 499999 (Revenues) 500000 - 599999 (Expenditures) 600000 - 699999 (Other Sources / Uses of Funds - including transfers) 700000 - 799999 (GAAP adjustments)
Company Codes Reporting Entity PHX Most transactions will be made to PHX (main operating entity) COPR City of Phoenix Employees’ Retirement Plan DCP Deferred Compensation Plan SROG SROG joint venture VIST Val Vista joint venture CIC2 Civic Improvement Corporation PHFC Phoenix Housing Finance Corporation
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