Budget structure &1 cannot be set as a multi-level budget structure

What causes this issue?

The budget structure &v1& in FM area &v2& has been used as a flat budget
structure in IMG activity <DS:SIMG._ISPSFM_VC_FMBSCONTR>Define Settings
for Budget Structure</> in fiscal year &v3& so you cannot change it to
a multi-level budget structure.

System Response

Processing stops.

How to fix this error?

Delete the entry of FM area &v2&, fiscal year &v3& and budget structure
&v1& or assign another budget structure to FM area &v2& and fiscal year
&v3& in IMG activity <DS:SIMG._ISPSFM_VC_FMBSCONTR>Define Settings for
the Budget Structure</> .

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.