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PPMS User Group May 29, 2009 Lynn Melton. PPMS and FMS (one of these things just doesn’t belong)

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Presentation on theme: "PPMS User Group May 29, 2009 Lynn Melton. PPMS and FMS (one of these things just doesn’t belong)"— Presentation transcript:

1 PPMS User Group May 29, 2009 Lynn Melton

2 PPMS and FMS (one of these things just doesn’t belong)

3 Straight from the Department of the Obvious: PPMS processes payroll FMS processes financial data Both need to balance

4 Straight from the Department of Confusion: The FOCUS: PPMS Employee account and W2 focused FMS General Ledger and Financial Statement focused The PROCESSING: PPMS Only on Cut-Off (generally 4 times a month) FMSWhen Batches are released (every workday) The ACCOUNTING: PPMS None (not even in the vocabulary) FMSAll (even those pesky Transaction Codes) The MECHANISM: PPMSSocial Security Number’s FMSTransaction Codes

5 Straight from the Department of International Vocabulary: PPMS FMS Test Payroll’s/Cut-Off’s Batches Deduction, Reduction & Contribution Rev/Exp, Assets/Liab, FB Balances 5 Grosses Balances GL’s Earn Types Revenue Codes IRS John Ginther

6 Reach out…. and Touch your Neighbor PPMS It’s a Small World after all FMS Haven’t figured this one out yet

7 Those {PESKY} Payroll Batches Transferring the $’s (..show me the Money!)

8 Central Bank Account Transaction Codes (3 different purposes) Payroll Batches (2 bonus batches) Payroll Clearing Account Payroll Cut Off

9 Central Payroll Account (US Bank) Central Payroll Account (US Bank) 1. Total Local Funds for the payroll are transferred from the college’s bank account to the central payroll bank account on the check date. 2. The total State Funds for the payroll are manually EFT’ed from the State Treasurer into the central payroll account (the person reconciling the payroll initiates this process). At this point in time, 100% of the dollars to cover the payroll are in the central payroll account. 3. Total Vendor Payments (Total Gross Payroll Amount + Employer Costs - Total Net Pay) are deposited back into the college’s bank account (effective on the check date + 1 banking date). Vendor Checks & EFT Vendor Payments Central Payroll Bank Account 030 College’s Bank Account 030 College’s Bank Account 010 thru 290 State Funds (from State Treasurer) 010 thru 290 State Funds (from State Treasurer) 020 College’s Bank Account 020 College’s Bank Account 010 College’s Bank Account 010 College’s Bank Account 030 College’s Bank Account 030 College’s Bank Account 020 College’s Bank Account 020 College’s Bank Account 010 College’s Bank Account 010 College’s Bank Account From PS1245 DEPOSIT INFORMATION: 1. TOTAL STATE FUNDS DEPOSITED TO PAYROLL ACCOUNT - ON CHECK DATE..... 616,410.64 #2 2. TOTAL LOCAL FUNDS DEPOSTIED TO PAYROLL ACCOUNT - ON CHECK DATE..... 399,467.98 #1 3. TOTAL ALL FUNDS DEPOSITED TO PAYROLL ACCOUNT.......................................... 1,015,878.62 TOTAL NET PAY............................................ 590,804.02 LESS HANDDRAWN CHECKS.................... 1,574.12 PLUS OVERPAYMENTS.............................. 0.00 ADJUSTED TOTAL NET PAY....................... 589,229.90 4. LESS ADJUSTED TOTAL NET PAY WRITTEN............................................................... 589,229.90 5. TOTAL FUNDS DEPOSITED TO DISTRICTS ACCOUNT - CHECK DATE + 1 BANK DAY 426,648.72 #3 6. DISTRICT CASH NET EFFECT (5 - 2)............................................................................. 27,180.74 From PS1425 VENDOR TOTAL 2,028.99 DATE TOTAL 153,936.55 PAYMENT TOTAL 182,953.04 DISTRICT TOTAL 426,648.72 #3

10 Payroll Banking: Overview Dollars are transferred into the Central (or System) Payroll Account from the State Treasurer and each colleges local bank account. The total gross payroll and related costs are calculated between “State” and “Local” funds based on PPMS. The “State” portion is manually transferred from the State Treasurer and the “Local” portion is automatically withdrawn from each colleges account. These transfers into the Central (or System) Payroll Account are effective on the payroll check date to cover 100% of the payroll costs. The difference between the total gross payroll and related costs and the net pay written is calculated (by college). This portion is EFT’d back to each college to cover their vendor payment liability of employee deductions and employer cost liabilities. This EFT back to the college occurs on the 1 st banking day after payday.

11 Payroll Transaction Codes (TC)....what exactly are they accomplishing? The TC’s generated from payroll can be categorized into 3 major areas: 1) Recording the transferring of monies between the System Payroll Account and each colleges local bank account for the disbursement of employee net pay and payroll related vendor payments. 2) The expensing of employee gross pay and employer benefit costs to the colleges budget accounts. 3) Recording each colleges vendor liability/expense of monies collected for each of the various types of liabilities associated with a payroll.

12 Payroll TC’s ….where do they come from? FMS transaction codes are identified from either the PPMS Institution Parameter Table or those contained on the Deduction Code Table. The FMS transaction codes to record the transferring of monies between bank accounts (EFT’s) and expensing employee costs are contained on the PPMS Institution Parameter Table The FMS transaction codes to record the payroll vendor liabilities/expenses are contained on the PPMS Deduction Code Table for each payroll deduction to be processed.

13 FMS Payroll Transaction Codes ….from the PPMS Institution Parameter Table # TCDrCrDescription 30200265101110 record EE gross pay/ER cost expense for non-accrued payroll 30380265055124 record EE gross pay/ER cost expense for an accrued payroll 30480451246505 reverse EE gross pay/ER cost accrual 65101110 and expense 30504011501110 bank deposit/withdrawal 30780513191110 record central payroll account treasury funds 30880111105111 record transfers to/from prepaid account 30980011105199 record EFT deposits/withdrawals 31080751241110 record liability at year end (13th/25th month) 31189401200998 record staff months expense

14 Payroll Batches …and two bonus Batches to finish the job. Payroll Batches: 06 – Payroll 07 – Accrued Payroll 08 – 13/25 th Month (Year End) Accrued Payroll 09 – Payroll EFT’s Bonus Batches: 01 – Pooled Cash 51 – Vender Payments (checks only)

15 Payroll Clearing Account ….790-300-1B99 The transferring of monies between the central payroll bank account and each colleges local bank account requires an account code to monitor these transfers. The withdrawal of local funds to the central payroll account and deposit back of the total vendor liability is made from/to this account The amount transferred back is 100% of the college vendor payment liability and is then immediately transferred to each individual vendor account by payroll deduction code.

16 Process Payroll on Cut-off (as determined by SBCTC-IT) In any given month, there are 4 opportunities to run a payroll: A – paid on 25 th B – paid on 10 th (accrued) H – paid on 15 th M – paid on last working day of month In July, there are 2 “bonus” opportunities to run payroll: S – paid on 10 th (accrued) 1 – paid on 10 th (not accrued)

17 Central Bank Account Transaction Codes (3 different purposes) Payroll Batches (2 bonus batches) Payroll Clearing Account Payroll Cut Off

18 (Simplified) Payroll Processing Employee Name & Personal Info get input into PPMS W2 produced after calendar year end (January) Budget Code input into PPMS Total Gross & Employer Costs are charged in FMS Misc Deductions & Taxes calculated in PPMS Vendor payments/taxes recorded and paid in FMS

19 The Aftermath: In just short 2 days….the magic appears in FMS The multiple payroll batches (to include Batch 01) post to FMS, recording the payroll expenditures and liabilities. On payday, 2 days after the FMS posting date, the cash is transferred from the various sources (State Treasurer and all the colleges local accounts) to the System Payroll Account Batch 51 is posted one banking day after payday.

20 Payroll: The GOOD The A, H & M Payrolls and their associated Batches: Batch 01 – Pooled Cash Batch 06 – Payroll Batch 09 – EFT Payroll Batch 51 – Vender Payments by Check

21 The Good: A, H and M Payrolls (cont): Batch 01 – Pooled Cash Batch 51 – Vendor Check Payments Batch 06 - Payroll: 002 (6510/1110*) – Record Employee Gross Pay/Employer Cost Expense (not accrued) 800R (5199/1110) – Record EFT withdrawals to System Payroll Account 801 (1110/5111) – Record transfer of cash & vendor liability 812 (1110/5181) – Records transfer of cash & Health liability Batch 09 – EFT Payroll: 040 (1150/1151) – Record bank deposit 040R (1151/1150) – Record bank withdrawal 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment 800R (5199/1110) – Record EFT to System Payroll Account & vendor liability 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment *4310 if State Fund is used

22 The Good: A, H and M Payrolls (cont): Batch 01 – Pooled Cash Batch 51 – Vendor Check Payments Batch 06 - Payroll: 002 (6510/1110*) – Record Employee Gross Pay/Employer Cost Expense (not accrued) 801 (1110/5111) – Record transfer of cash & vendor liability 812 (1110/5181) – Records transfer of cash & Health liability Batch 09 – EFT Payroll: *4310 if State Fund is used 800R (5199/1110) – Record EFT withdrawals to System Payroll Account 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment 040 (1150/1151) – Record bank deposit 040R (1151/1150) – Record bank withdrawal 800R (5199/1110) – Record EFT to System Payroll Account & vendor liability 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment

23 Payroll: The BAD The B Payroll and the associated Batches: Batch 01 – Pooled Cash Batch 06 – Payroll Batch 07 – Accrued Payroll Batch 09 – EFT Payroll Batch 51 – Vendor Payments by Check

24 The Bad: B Payroll (cont): Batch 01 – Pooled Cash Batch 51 – Vendor Check Payments Batch 06 - Payroll: 804 (5124/1110; 6510/6505) – Record reversal of Employee Gross Pay/Employer Cost Accrual & Expense (accrued) 800R (5199/1110) – Record EFT withdrawals to System Payroll Account 801 (1110/5111) – Record transfer of cash & vendor liability 812 (1110/5181) – Records transfer of cash & health liability Batch 07 – Accrued Payroll: 802 (6505/5124) – Record Employee Gross Pay/Employer Cost Expense (accrued) Batch 09 – EFT Payroll: 040 (1150/1151) – Record bank deposit 040R (1151/1150) – Record bank withdrawal 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment 800R (5199/1110) – Record EFT to System Payroll Account & vendor liability 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment

25 Payroll: The UGLY The 06B & 06S Payrolls and the associated Batches: Batch 01 – Pooled Cash Batch 06 – Payroll Batch 07 – Accrued Payroll Batch 08 – 13 th /25 th Month (Year End) Accrued Payroll Batch 09 – EFT Payroll Batch 51 – Vendor Payments by Check

26 The Ugly: 06B and 06S Payrolls (cont): Batch 01 – Pooled Cash Batch 51 – Vendor Check Payments Batch 06 - Payroll: 800R (5199/1110) – Record EFT withdrawals to System Payroll Account 801 (1110/5111) – Record transfer of cash & vendor liability 812 (1110/5181) – Records transfer of cash & health liability Batch 07 – Accrued Payroll: 802 (6505/5124) – Record Employee Gross Pay/Employer Cost Expense (accrued) Batch 08 – 13 th /25 th Month Accrued Payroll: 807 (5124/1110) – Record Employee Gross Pay/Employer Cost Expense (accrued) 804 (5124/1110; 6510/6505) – Reverse employee Gross Pay/Employer Cost Accrual & Expense (accrued) Batch 09 – EFT Payroll: 040 (1150/1151) – Record bank deposit 040R (1151/1150) – Record bank withdrawal 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment 800R (5199/1110) – Record EFT to System Payroll Account & vendor liability 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment

27 It’s all in the GL’s (…where creative accounting is not part of the strategy.)

28 Balancing Fund 790 ….but why? What is Fund 790? A revolving account that identifies the funds held for future disbursement of taxes, vendor payments and other (payroll related) accounts within the college. An increase in the fund occurs when an EFT is received in the colleges local bank account from the central bank account (day after payday). A decrease in the fund occurs when the vendor payments are made. Why does it need reconciling? There are deposits There are withdrawals There are adjustments (hand draws & overpayments) …need I say more?

29 Balancing Fund 790 ….what do we need? FMS Reports GA1335 – Program/Organizational Trial Balance (month end) GA1409A – General Ledger Trial Balance (month end) BM3105 – Pending Payment Report PPMS Reports PS1245 – Payroll Expense EFT Summary PS1425 – Vendor Payment Liability Report PS1410 – Payroll Reconciliation Report

30 Balancing the General Ledger in Fund 790 GL’s affected by Payroll that need monitoring: 1110 – Cash 1312 – Current Accounts Receivable 1399 – Payroll Handwrites 5111 – Accounts Payable 5124 – Accrued Salaries Payable 5181 – Employee Insurance Deduction Payable 5188 – Savings Bond Deduction 5189 – Garnishment Deduction 5191 – Customer Deposits 5199 – Accrued Liabilities 6505/6510 – Accrued/Cash Expenditures/Expenses (should be zero)

31 Now that I have what they say I need, ….what do I do? Compare FMS reporting: Using the GA1335 and the GA1409A or GA1332… Add up all the amounts for a single GL and verify the total equals the GL on the GA1409A or GA1332 Why? Because this verifies that you’ve identified all the amounts that equal the month end balance in the GL. Identify the account codes that payment has not been made yet Why? Because these are not “out of balance”, they are simply timing issues that will {hopefully} balance upon the next payment (quarter end, court notice, invoice, etc). It is preferable that even though these are timing issues, to review the balances and to verify that the current amounts are correct using the Vendor Payment Reports. Identify the account codes that payment has been made Why? Because these are your potential problem GL’s. If the account code balance is zero - Congratulations….and good luck next month. If they’re not in balance - let the research begin! Start with your payroll person and show them the amount the account is out of balance. The amount might be a familiar amount that would save you time in your balancing.

32 Now that I have what they say I need, ….what do I do? (cont) Compare PPMS reporting: Using the PS1425 and PS1410, verify the following: “Transfer to Vendor Payables” on 1410 agrees to “Vendor Payment Liability” on 1425 Using the PS1410, compare: “EFT Deposit to District Clearing Account” to “Transfer to Vendor Payables” – the difference, if any, will be an adjustment (hand drawn or overpayment) Compare the FMS reports to the PPMS reports Verify using the PS1425 & BM3105 that the vendors and amounts agree. Notice the timing of payments to when the reports are printed….are you really “out of balance” or are you simply waiting for a due date to pay (timing).

33 Life with Handdrawns & Overpayments (…ridding your system of those Klingons)

34 What exactly is happening… …..and what should I be looking for Handdrawns & Overpayments are considered adjustments in both PPMS & FMS. Things to keep in mind when balancing: The Central Bank Account holds all the net amounts until EFT’d or cashed. The colleges local account holds all the vendor payments until paid.

35 Handdrawn Checks Reasons an employee could be issued a handdrawn check: ( always follow college policy) Was not paid on regular PPMS cut-off and should have been. Sent to incorrect address. Check was lost/misplaced/stolen/used as a bookmark. Check was mutilated by: Dog/Cat/Bird/Guinea Pig Shredder Washing machine Spilled perfume, bleach, coffee or that evenings dinner Child with stapler or Crayola markers Tires (drove over check through mud puddle causing it to rip)

36 Handdrawn checks put simply….. A handdrawn check is drawn on the colleges local bank account (that’s why handdrawn checks should not be “canceled” in PPMS – they should be “reversed”). A handdrawn input into PPMS is basically recording the liability that the payroll bank account has incurred – it owes the college those funds (the net amount). When PPMS processes a payroll on cut-off, the college becomes another vendor, using deduction code (200), and the net pay transferred to the central bank account is decreased by the net pay of the handdrawn – because the college (the vendor) is due those funds.

37 The adjustment When the hand drawn check is written and issued through FMS, the check should be recorded in FMS using the payroll account code assigned to the hand drawn check deduction code in PPMS (200). The hand drawn check written on the colleges local bank account, when posted in FMS, will not charge the employee’s budget code. This will not occur until PPMS enters the hand drawn check and is posted to FMS (2 days after cut-off). The system will use the deduction code table to charge the appropriate account code in FMS. The entry must be input into PPMS as this affects the 5 Grosses payroll tracks as well as the year end W2. These two adjustments should net to zero and thus leave a zero balance in the account.

38 When there are Klingons Go back to the originating documents and compare: Test payroll/manual calculations to arrive at Net Pay A19 given to FMS to produce hand drawn check Verify that the amounts were input correctly: PPMS has correct Gross and Net Pay and includes all deductions/reductions/contributions related to hand drawn. PPMS has correctly input this transaction. FMS has produced a check for Net Pay.

39 Overpayments When a college should receive a personal check from an employee: Overpayment: Unable to recover employee’s auto deposit LWOP was not recorded prior to cut-off Contract was canceled and payroll was not notified prior to cut-off An employee’s contract and/or hours got put on a different employee’s pay screen.

40 Overpayments put simply….. Note: Only the net amount is collected for an overpayment. An overpayment is an amount that the college is collecting from the employee to pay back the central bank account. An overpayment input into PPMS is basically recording the liability that the colleges local bank account has incurred – it owes the central bank account those funds (the net amount). When PPMS processes a payroll on cut-off, the college, in a sense, becomes a “middle man” and the net pay transferred to the central bank account is increased by the net pay of the overpayment.

41 The adjustment When the overpayment is received by the college, the increase in cash should be recorded in FMS using the colleges payroll clearing account found in the institutional parameters (1015). The overpayment that is deposited to the colleges local bank account, when posted in FMS, will not adjust the employee’s budget account. This will not occur until PPMS enters the overpayment and is posted to FMS (2 days after cut-off). The system will use the institutional parameter account code to charge the appropriate account code in FMS. The entry must be input into PPMS as this affects the 5 Grosses payroll tracks as well as the year end W2. These two adjustments should net to zero and thus leave a zero balance in the account.

42 When there are Klingons Go back to the originating documents and compare: Test payroll/manual calculations to arrive at Net Pay Letter given to employee requesting reimbursement Verify that the amounts were input correctly: PPMS has correct Gross and Net Pay and includes all deductions/reductions/contributions related to overpayment. PPMS has correctly input this transaction. FMS has input the overpayment in the correct account code (payroll clearing account).

43 …that’s all folks!


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