Incorrect Budget Consumption on Project related AP invoice that is generated from an expense report

When creating an expense report related to a project, the distribution used for funds check is getting generated from the default expense account of the employee, not the project details. When the accounting is generated for the AP invoice, the accounting is generated appropriately. However, this is resulting in incorrect budget consumption. TAD rules are setup to derive the project accounting on the invoice.

Please refer to this PowerPoint for context. Any and all help appreciated!