Coverage circles

What is meant by Coverage circles?

The term "coverage circles" in budgetary law refers to a group of budget items or accounts that are mutually coverable. This means that funds can be flexibly shifted between these budget items to offset overspending in one area with savings in another. Coverage circles serve the purpose of flexible budget management and enable more efficient fund administration.

Typical software functions in the area of "coverage circles":

1. Establishment of coverage circles: Grouping of budget items into a coverage circle.
2. Availability control: Monitoring of the total funds available within the coverage circle.
3. Fund reallocation: Automatic booking of fund transfers within the coverage circle.
4. Reporting: Generation of overviews and reports on the status of coverage circles.
5. Coverage balance accounts: Management of collective accounts for the administrative measures of all involved ledger accounts.
6. Threshold monitoring: Setting and controlling upper limits for fund transfers.
7. Simulation function: Forward-looking planning of fund transfers and their impacts.
8. Audit trail: Traceable documentation of all changes and transfers within the coverage circle.

Examples of "coverage circles":

1. Personnel expenses: Grouping of various personnel cost items in one coverage circle.
2. IT expenses: Coverage circle for hardware, software, and IT services.
3. Travel expenses: Coverability between various travel expense items of different departments.
4. Training expenses: Coverage circle for training and further education costs of multiple departments.
5. Building management: Grouping of expenses for rent, energy, and maintenance in one coverage circle.
6. Research projects: Coverage circle for various cost centers within a research project.